Well, I think it's legitimate for the state to say that if people are getting money from them, those people are not allowed to waste it/spend it on the 'wrong' things. The welfare system was supposed to be a safety net, not pocket money to buy nice things. I also think there are a scary number of irresponsible parents who'll spend their money on fags/booze/Sky, whilst not leaving enough money for their kids. It's a necessary evil to restrict benefits claimants spending, imo - it'd be great if people could spend the money responsibly, but many choose not to.
When we're at the stage where
49% of teachers are taking food into their schools to feed hungry kids, I think it's fair to say that there is a parenting deficit, and the state needs to nudge people into doing the right thing.