2013 Action to Eliminate Asset Limits
By Ethan Geiling on 03/12/2013 @ 04:30 PM
Many public benefit programs— like cash welfare, Medicaid and food assistance—limit eligibility to those with few or no assets. Yet, these asset limits force low-income families to “spend down” personal reserves in order to get any government help. These reserves are precisely the kind of personal safety net that can keep families from falling deeper into poverty and help them move to financial security and opportunity.
Inconsistencies in the treatment of assets also mean confusion and a patchwork of complex rules with no overarching logic. And most importantly, asset tests send a signal that the poor should not save.
Many advocates across the country are pushing policymakers to take action on asset limits. In 2013, we’ve already seen significant (and almost all positive!) movement in ten states:
- Hawaii: Advocates in Hawaii have been pushing asset limit reform for many years with mixed success. However, last year, Hawaii enacted legislation requiring the Department of Human Services to study the impact of eliminating asset tests (read the report). This year, the Hawaii legislature introduced SB 1099 and HB 868 to eliminate asset limits in Temporary Assistance for Needy Families (TANF). The current TANF asset limit is $5,000.
- Nevada: The Department of Health and Human Services, at the urging of the State Treasurer Kate Marshall, recently announced that it will exclude 529s from the TANF asset test. The Department has also committed to re-evaluating the state’s asset limit policies, and may ultimately decide to completely eliminate the TANF asset test in the coming months.
- Massachusetts: The Midas Collaborative is working with State Senator Jamie Eldridge and Representative Linda Dorcena Forry to pass legislation that would increase the TANF asset limit (read a blog post).
- Nebraska: Voices for Children Nebraska is pushing legislation that would align asset limits in the TANF and child care subsidy programs with the SNAP asset limit, which was raised to $25,000 in liquid resources in 2011 (see a presentation about Nebraska asset limit reform from the 2012 Assets Learning Conference).
- Illinois: The Illinois Asset Building Group has helped introduce two bills (SB2319 / HB2262) that would remove the asset test in TANF. See these fact sheets for more information.
- Minnesota: Last year the Minnesota legislature required its Department of Human Services to study the impact of eliminating asset tests (read the report). The report concludes that if the state truly wants to support “greater stability and longer-term self-sufficiency …, current asset limit requirements [should] be eliminated completely…”
- California: Advocates in California are advancing legislation to exclude vehicles from the TANF asset test.
- Oregon: Oregon has introduced a bill to exclude modest retirement savings for IDA Initiative participants (check out Neighborhood Partnership’s summary here).
- Arkansas: Southern Bancorp Community Partners just released a new policy report examining state asset limits. Advocates plan to aggressively pursue asset limit eliminating this session.
- Oklahoma: Oklahoma is the only state where we’ve seen negative action so far. A bill is moving through the legislature (HB2017) that would reinstate the SNAP asset test at $5,000.
Since 1996, there has been a huge push to tackle this issue. Twenty-four states have eliminated Medicaid asset limits entirely, and all remaining states will be required to eliminate the Medicaid asset test by 2014 as part of the health care overhaul. Six states have eliminated TANF asset limits and 36 states have eliminated SNAP asset limits.
Two states have substantially increased the asset limits in their Medicaid or TANF programs, and 36 states have excluded important categories of assets from these limits in one or both programs.
Check out our Scorecard Resource Guide for more information about what states have done, research showing the effects of asset limit elimination, and case studies from states that have successfully eliminated their asset tests.