James Brady was homeless when he found $850 on the street after leaving a shelter in Hackensack and turned it over to police in April. Police returned the money to him last month after no one claimed it.
The Hackensack Human Services Department denied General Assistance and Medicaid Benefits to Brady through Dec. 31 because he failed to report the income.
Bergen County officials are reviewing the rules to see if Brady's benefits can be restored.
Hackensack Mayor John LaBrosse tells The Record newspaper he's like to see the decision reversed.
The local United Way chapter has already raised $3,500 for Brady, who recently found housing.