I wouldn't say it's bad reporting. If you have ever had any experience with the severly mentally ill, which from the sounds of things this woman is and is probably mildly mentally retarded, when they don't get their way they will say and do anything. You can not reason with them because they don't have the ability. They are concrete thinkers.
It sounds like from the article she was receiving SSI benefits and housing, you don't just get SSI, it's a long drawn out process.