Are Taxpayers Paying for Free Cell Phones?

This week, after a number of news programs ran stories about free cell phones being distributed to welfare recipients, I received a bunch of inquiries asking whether it was true. Specifically, I was asked whether there were free “Obama phones” being distributed on the taxpayers’ nickel.
Here’s the scoop:
Yes, there is a law in place to help low-income customers have access to basic telephone service. It’s divided into two programs: Link-Up America and Lifeline.

Link-Up assists consumers with the installation costs of phone service. The program pays up to $30 of the cost of installation and up to $200 in the form of a one year, interest-free loan for additional installation costs.

Lifeline provides discounts on basic monthly service at a primary residence for qualified telephone customers. These discounts can be up to $10.00 per month, or more for certain Native Americans. Generally, to qualify, your income must be at or below 135% of the federal poverty guidelines (these vary by location and size of family but for comparison, rings in at $22,350 for a family of four in the lower 48).

In some instances, coverage may include discounts for cell phone service instead of land lines at primary residences because realistically, cell phone service is less expensive in some areas than traditional service. Eligibility and type of program may vary from state to state – and this is why there is a flurry of confusion about the program being a product of the Obama administration. In Florida, for example, cell phone service was added to the existing program – in 2008, the year that Obama was elected to office. The conclusion from many folks was that it was a new federal program. It was not. It was an expansion of the existing program and implemented on a state by state basis.

Read more: http://www.forbes.com/sites/kellyphillipserb/2012/02/12/are-taxpayers-paying-for-free-cell-phones/