I still disagree no matter what fictitious scenario that you throw at me.
If she can afford to waste 41 dollars on a cake she is receiving too much money. If she can't afford to waste the money and sacrifices nutrition for herself or anybody else then she is making a poor decision with money that is not hers and was not intended for that purpose.
I have zero issues with extremely strict standards regarding any public assistance. Whether it be welfare, social security disability, or whatever other forms.
On a side note, I like the way you have approached this thread.