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Financial Assets & Income

Outcome Measures

Income Poverty Rate

Asset Poverty Rate

Asset Poverty by Race

Asset Poverty by Gender

Asset Poverty by Family Structure

Liquid Asset Poverty Rate

Liquid Asset Poverty by Race

Liquid Asset Poverty by Gender

Liquid Asset Poverty by Family Structure

Extreme Asset Poverty Rate

Net Worth

Net Worth by Race

Net Worth by Income

Net Worth by Gender

Net Worth by Family Structure

Unbanked Households

Underbanked Households

Households with Savings Accounts

Consumers with Subprime Credit

Borrowers 90+ Days Overdue

Average Credit Card Debt

Bankruptcy Rate

Policy Priorities

Tax Credits for Working Families

State IDA Program Support

Lifting Asset Limits in Public Benefit Programs

Protections from Predatory Short-Term Loans

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Income Tax Threshold

Tax Burden by Income

Prize-Linked Savings

Paperless Payday

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Change in Net Worth

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CFED Assets & Opportunity Scorecard

Lifting Asset Limits in Public Benefit Programs

Reports & Graphics

Overview

Many public benefit programs – like cash welfare or Medicaid – limit eligibility to those with few or no assets. If a family has assets over the state’s limit, it must “spend down” longer-term savings in order to receive what is often short-term public assistance. These asset limits are a relic of entitlement policies that in some cases no longer exist. Cash welfare programs, for example, now focus on quickly moving individuals and families to self-sufficiency, rather than allowing them to receive benefits indefinitely. Personal savings and assets are precisely the kind of resources that allow families to move off of public benefit programs. States should eliminate asset limits from public benefit programs.

Read an analysis of recent policy progress on lifting asset limits in public benefit programs. 

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Policy Brief

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Resource Guide

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CFED evaluated the strength of each state’s asset limit policies against the four criteria described in the Elements of a Strong Policy tab. The table below shows which criteria each state met.

CFED uses the following icons to denote the strength of state policies:

Strength of State Policies: Lifting Asset Limits in Public Benefit Programs

TANF 1Family Medicaid 2SNAP 3
StateElimi-
nated?
Raised to $15K/ index for inflation?Exclude
4+
asset
classes?
Elimi-
nated?
Raised to $15K/ index for inflation?Exclude
4+
asset
classes?
Elimi-
nated?
Raised above $2K?Index for infla-
tion?
Rating
Alabama  Yes  —  —  Yes  —  —  Yes  —  —  1 
Alaska  No  No ($2,000; $3,000 if HH includes person over 60)  No  No  No ($2,000; $3,000 if HH includes person over 60)  Yes  No  No ($2,000; $3,250 if HH includes elderly or disabled members)  No  0.25 
Arizona  No  No ($2,000)  Yes  Yes  —  —  Yes  —  —  0.75 
Arkansas  No  No ($3,000)  Yes  No  No ($1,000)  No  No  No ($2,000; $3,250 if HH includes elderly or disabled members)  No  0.25 
California  No  No ($2,000; $3,000 if HH includes person over 60)  Yes  No  No ($3,000 for up to 2-person HH; increases $150 per person)  No  Yes  —  —  0.5 
Colorado  Yes  —  —  Yes  —  —  Yes  —  —  1 
Connecticut  No  No ($3,000)  Yes  Yes  —  —  Yes  —  —  0.75 
Delaware  No  No ($10,000)  Yes  Yes  —  —  Yes  —  —  0.75 
District of Columbia  No  No ($2,000; $3,000 if HH includes person over 60)  Yes  Yes  —  —  Yes  —  —  0.75 
Florida  No  No ($2,000)  No  No  No ($2,000)  No  Yes  —  —  0.5 
Georgia  No  No ($1,000)  Yes  No  No ($1,000)  Yes  Yes  —  —  0.5 
Hawaii  No 4 No ($5,000)  Yes  No  No ($2,000 for one-person household; $3,000 for a two-person household; $250 for each additional person)  No  Yes  —  —  0.5 
Idaho  No  No ($5,000)  Yes  No  No ($1,000)  No  No  Yes ($5,000)  No  0.5 
Illinois  No  No ($2,000 for one person; $3,000 for two people; $50 for each additional person)  Yes  Yes  —  —  Yes  —  —  0.75 
Indiana  No  No ($1,000 for applicants; $1,500 for recipients)  No  No  No ($1,000)  No  No  No ($2,000; $3,250 if HH includes elderly or disabled members)  No  0 
Iowa  No  No ($2,000 for applicants; $5,000 for recipients)  Yes  No  No ($2,000 for applicants; $5,000 for recipients)  Yes  Yes  —  —  0.5 
Kansas  No  No ($2,000)  Yes  Yes  —  —  No  No ($2,000; $3,250 if HH includes elderly or disabled members)  No  0.5 
Kentucky  No  No ($2,000)  No  No  No ($2,000)  Yes  Yes  —  —  0.5 
Louisiana  Yes  —  —  Yes  —  —  Yes  —  —  1 
Maine  No  No ($2,000)  Yes  No  No ($2,000)  Yes  Yes  —  —  0.5 
Maryland  Yes  —  —  Yes  —  —  Yes  —  —  1 
Massachusetts  No  No ($2,500)  Yes  Yes  —  —  Yes  —  —  0.75 
Michigan  No  No ($3,000)  Yes  No  No ($3,000)  Yes  No  Yes ($5,000; excludes one vehicle up to $15,000)  No  0.5 
Minnesota  No 5 No ($2,000 for applicants; $5,000 for recipients)  No  No  Yes ($10,000 for one parent; $20,000 for two parents)  Yes  Yes  —  —  0.5 
Mississippi  No  No ($2,000)  Yes  Yes  —  —  Yes  —  —  0.75 
Missouri  No  No ($1,000 for applicants; $5,000 for recipients)  No  Yes  —  —  No  No ($2,000; $3,250 if HH includes elderly or disabled members)  No  0.5 
Montana  No  No ($3,000)  No  No  No ($2,000 for one person; $3,000 for two or more people)  Yes  Yes  —  —  0.5 
Nebraska  No  No ($4,000 for one person; $6,000 for two or more people)  Yes  No  No ($4,000 for one person; $6,000 for two or more people)  Yes  No  Yes ($25,000 in liquid assets; all illiquid assets excluded)  No  0.5 
Nevada  No  No ($2,000)  Yes  No  No ($2,000)  Yes  Yes  —  —  0.5 
New Hampshire  No  No ($1,000 for applicants; $2,000 for recipients)  Yes  No  No ($1,000 for applicants; $2,000 for recipients)  Yes  Yes 6 —  —  0.5 
New Jersey  No  No ($2,000)  Yes  Yes  —  —  Yes  —  —  0.75 
New Mexico  No  No ($1,500 in liquid resources; $2,000 in illiquid resources)  Yes  Yes  —  —  Yes  —  —  0.75 
New York  No  No ($2,000; $3,000 if HH includes someone over age 60)  Yes  Yes  —  —  Yes  —  —  0.75 
North Carolina  No  No ($3,000)  Yes  No  No ($3,000)  Yes  Yes  —  —  0.5 
North Dakota  No  No ($3,000 for one person; $6,000 for two people; $25 per person thereafter)  No  Yes  —  —  Yes  —  —  0.75 
Ohio  Yes  —  —  Yes  —  —  Yes  —  —  1 
Oklahoma  No  No ($1,000)  Yes  Yes  —  —  Yes  —  —  0.75 
Oregon  No  No ($2,500 for applicants; $10,000 for recipients)  No  No  No ($2,500)  Yes  Yes  —  —  0.5 
Pennsylvania  No  No ($1,000)  Yes  Yes  —  —  No  Yes ($5,500; $9,000 if household includes elderly or disabled members)  No  0.5 
Rhode Island  No  No ($1,000)  No  Yes  —  —  Yes  —  —  0.75 
South Carolina  No  No ($2,500)  Yes  No  Yes ($30,000)  Yes  Yes  —  —  0.5 
South Dakota  No  No ($2,000)  No  No  No ($2,000)  No  No  No ($2,000; $3,250 if HH includes elderly or disabled members)  No  0 
Tennessee  No  No ($2,000)  Yes  No  No ($2,000)  No  No 7 No ($2,000; $3,250 if HH includes elderly or disabled members)  No  0.25 
Texas  No  No ($1,000)  Yes  No  No ($2,000)  Yes  No  Yes ($5,000; excludes one vehicle up to $15,000)  No  0.5 
Utah  No  No ($2,000)  Yes  No  No ($2,000 for one person; $3,000 for two people; $25 for each additional person)  No  No  No ($2,000; $3,250 if HH includes elderly or disabled members)  No  0.25 
Vermont  No  No ($2,000)  Yes  No  No ($2,000 for one person; $3,000 for two people)  No  Yes  —  —  0.5 
Virginia  Yes  —  —  Yes  —  —  No  No ($2,000; $3,250 if HH includes elderly or disabled members)  No  0.75 
Washington  No  No ($1,000 for applicants; $4,000 for recipients)  Yes  No  No ($1,000 for applicants; eliminated for recipients)  Yes  Yes  —  —  0.5 
West Virginia  No  No ($2,000)  No  No  No ($1,000)  No  Yes  —  —  0.5 
Wisconsin  No  No ($2,500)  No  Yes  —  —  Yes  —  —  0.75 
Wyoming  No  No ($2,500)  No  Yes  —  —  No  No ($2,000; $3,250 if HH includes elderly or disabled members)  No  0.5 

Footnotes

1. David Kassabian, Anne Whitesell, and Erika Huber, Welfare Rules Databook: State TANF Policies as of July 2011, (Washington, DC: Urban Institute, 2012). Note: "-" indicates that the data is not applicable because the state has already eliminated the asset test for TANF. Additional updates from CFED research in June 2012.

2. Martha Heberlein, et al., Performing Under Pressure: Annual Findings Of A 50-State Survey Of Eligibility, Enrollment, Renewal, and Cost Sharing Policies In Medicaid And CHIP, 2011-2012, (Washington, DC: Kaiser Commission on Medicaid and the Uninsured, 2012), 59-60. Note: "-" indicates that the data is not applicable because the state has already eliminated the asset test for Medicaid.

3. Data provided by the Center on Budget and Policy Priorities. Even in states that have eliminated SNAP asset tests, a small number of people may remain subject to the traditional federal resource test of $2,000 ($3,250 for households that include an elderly or disabled person), such as households where some members have a different status than others (e.g. citizenship). Note: "-" indicates that the data is not applicable because the state has already eliminated the asset test for SNAP.

4. In 2012, Hawaii introduced multiple bills to raise or eliminate the TANF asset test. Although none of these bills passed, the legislature did pass a bill requiring the Department of Human Services to conduct a study analyzing the effects of changing asset limits and report on findings and policy recommendations before the 2013 legislative session.

5. In 2012, Minnesota enacted legislation requiring the Department of Human Services to analyze existing asset limits for public benefit programs and provide recommendations for the 2013 legislative session.

6. New Hampshire excludes all assets for households with children.

7. As of September 2012, Tennessee is currently considering eliminating the SNAP asset test.

WHAT STATES CAN DO

States determine many key policies related to families receiving benefits. States have discretion in setting or eliminating asset limits for Temporary Assistance to Needy Families (TANF), Medicaid and the Children’s Health Insurance Program (CHIP).1  In addition, states have the authority to address asset limits for the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp program.2

WHAT STATES HAVE DONE

Overall, since 1996, 24 states have eliminated Medicaid asset limits entirely; 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.

FEDERAL FLEXIBILITY AND STATE MECHANISMS FOR POLICY CHANGE

SNAP: States that have eliminated their SNAP asset tests have done so by implementing broad-based categorical eligibility. Broad based categorical eligibility is a policy that makes a household eligible for SNAP without regard to asset limits if it receives a TANF- or MOE-funded benefit, such as a pamphlet or an 800-number.6

Although states have had this option since 2002, uptake of that option was slow. However, the 2008 Farm Bill changed the trajectory of state policy adoption. The federal bill directly eased SNAP asset tests in three important ways: it adjusted asset limits for inflation, harmonized program rules pertaining to retirement accounts, and excluded education savings and retirement accounts from counting as resources. In addition, however, during the Farm Bill debate in 2008, federal policymakers went on record in support of eliminating the asset tests. These actions together generated new interest and willingness among state administrators to address this disincentive to save.

Unfortunately, there has been recent federal movement to eliminate state flexibility. In 2012, the House Agricultural Committee proposed a Farm Bill that would cut funding for SNAP by more than $16 billion over a decade. Approximately 70% of the savings would come from eliminating Broad Based Categorical Eligibility, that states use to eliminate SNAP asset tests. If this provision is adopted, all states would be required to reinstate their asset tests in SNAP. Advocates across the country voiced outrage over the proposed change, which would undo a decade of progress on SNAP asset reform. As of September 2012, the outcome of the bill is still pending. 

TANF: The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 gave states the flexibility to eliminate or raise asset limits for TANF and Medicaid and to exclude certain types of assets from eligibility determination. States have eliminated the TANF asset test both legislatively and administratively. Ohio, Louisiana, and Colorado enacted legislation to make the change. In the other three states that have eliminated their asset tests – Virginia, Alabama and Maryland – the state TANF agencies used their authority to change administrative rules, without going through a legislative process.

MEDICAID: In 2010, the federal Patient Protection and Affordable Care Act (PPACA) was enacted. PPACA includes a variety of provisions to maximize access to health coverage; redesign insurance to function as a traditional marketplace; hold insurers accountable to consumers; improve delivery systems and quality while containing costs; and reduce state budget deficits.7  In addition to expanding coverage options, PPACA also lays out a strong vision for eligibility systems that will greatly simplify the enrollment process, including eliminating the asset test. PPACA requires states to drop the asset test by 2014; however, states have the flexibility to drop the test before this date, as New York did in April 2010. Advocates can use the 2014 deadline to help make the case for eliminating the asset test.

 

 


1 Only Missouri and Texas have asset limits in their CHIP programs; the limit in Texas is $10,000 and the limit in Missouri is $250,000.

2 Stacy Dean, 2002 Federal IDA Briefing Book: How IDAs Affect Eligibility for Federal Programs: The SNAP Program, (Washington, DC: CFED and the Center on Budget and Policy Priorities, 2002).

 3 CFED, the Center on Budget and Policy Priorities, the Center for Law and Social Policy, the New America Foundation, the Urban Institute and the Sargent Shriver National Center on Poverty Law and others have all examined this issue.

4 If eliminating all vehicles as assets is not feasible, then states could consider eliminating at least one vehicle for each working member of a household.

5 Leslie Parrish, To Save, or Not to Save? Reforming Asset Limits in Public Assistance Programs to Encourage Low-income Americans to Save and Build Assets, (Washington, DC: New America Foundation, 2005).

6 Lizbeth Silbermann, internal memo of the United States Department of Agriculture, Food and Nutrition Service, January 31, 2011 “Questions and Answers on Broad-Based Categorical Eligibility,” http://www.fns.usda.gov/snap/rules/Memo/2011/013111.pdf.

 7 Stan Dorn, “State Implementation of National Health Reform: Harnessing Federal Resources to Meet State Policy Goals,” (Washington, DC: Urban Institute, 2010).

ELEMENTS OF A STRONG POLICY

The best option: Based on extensive research by many national and state organizations,1 CFED considers a state’s asset limit policy strong if it has eliminated asset limits in TANF, Medicaid and SNAP.

Incremental improvements: The existence of an asset limit, no matter how high, sends a signal to program applicants and participants that they should not save or build assets. However, if a state has not yet eliminated asset limits entirely, it can take several intermediate steps to mitigate the disincentive to save.

  • States can increase asset limits and/or index them to inflation, thereby reducing the likelihood that participants or applicants will reach the limit.
  • States can exempt certain classes of assets from their asset tests in the TANF and Medicaid programs. While most programs exclude some “illiquid” assets, such as a home or defined benefit pension, many other liquid holdings, such as defined contribution retirement accounts (e.g., 401(k)s), health savings accounts, education savings accounts (529s and Coverdells) or individual development accounts, often count against the asset limits. States should exempt these types of assets.2 In addition, vehicles, which are vital for many to find and maintain employment, should be exempted.3 (See the Appendix for a state-by-state list of key assets excluded from TANF and Medicaid programs.)

 

CFED evaluated the strength of each state’s asset limit policies against the following criteria:

For TANF, has the state:

  • Eliminated the asset test?
  • Raised the limit to at least $15,000 or indexed it for inflation?
  • Excluded four or more important classes of assets?

For Family Medicaid, has the state:

  • Eliminated the asset test?
  • Raised the limit to at least $15,000 or indexed it for inflation?
  • Excluded four or more important classes of assets?

For SNAP, has the state:

  • Eliminated the asset test?
  • Raised the limit above $2,000?
  • Indexed the limit for inflation?4

 

To see how each state’s policy stacks up against these criteria, see the State Data tab above.


1 CFED, the Center on Budget and Policy Priorities, the Center for Law and Social Policy, the New America Foundation, the Urban Institute and the Sargent Shriver National Center on Poverty Law and others have all examined this issue.

2 Leslie Parrish, To Save, or Not to Save? Reforming Asset Limits in Public Assistance Programs to Encourage Low-income Americans to Save and Build Assets, (Washington, DC: New America Foundation, 2005)

3 If eliminating all vehicles as assets is not feasible, then states could consider eliminating at least one vehicle for each working member of a household.

 

 

 

MAKING THE CASE

How much does eliminating asset tests cost? 

Evidence from states that have eliminated asset limits suggests that the administrative cost savings outweigh any real or potential increases in caseload. For instance, eliminating Medicaid asset limits in Oklahoma resulted in administrative cost savings of close to $1 million.1 In New Mexico, state officials anticipated 38 more people would enroll in Medicaid per month (with an associated increase of $23,00 in direct costs to the state, negligible in comparison with a $5.7 billion annual state budget).2 In Ohio and Virginia, the “early adopters” of TANF asset limit elimination, caseloads decreased in the years following the change.3 Similarly, in Louisiana, where the asset test in TANF was eliminated in January 2009, there has not been a significant increase in caseload. In Alabama, Maryland and Colorado where the TANF asset tests were eliminated in 2009, 2010 and 2011, respectively, more time will be needed to determine the long-term effects on caseloads. A number of states, such as Oregon, that raised or eliminated their vehicle asset tests found that doing so had a negligible effect on caseload.4

From a cost perspective, raising asset limits may be less desirable than eliminating the limits altogether, as there would still be administrative costs involved in  ndividualized eligibility determinations and verifications. In September 2011, Michigan reversed its asset limit policy in SNAP, reinstating the asset test after years without one. Advocates estimate that only 15,000 of the 1.9 million people in the program are expected to be removed as a result of the test, yet costs to the state for  eligibility determinations will increase.

 

Key Strategic Decisions5

Elimination versus reform of asset tests: Elimination of asset limits is the only way to reduce the administrative burden of implementing asset rules. Abolishing asset limits also sends a clear message that saving and building assets are encouraged. However, complete elimination of asset rules may not always be politically  easible. In that case, advocates should aim for elimination while pursuing substantially raised asset ceilings for both applicants and recipients and exemption of  additional categories of assets, in line with good public policy and state goals.

Legislative versus administrative approaches: Reform through a legislative approach may be more likely to stick. Legislative advocacy has the potential to generate more public interest and media coverage than a rule change. On one hand, a legislative battle involves a lot more votes and energy than an administrative change. On the other hand, advocates may not want to generate a lot of public discussion of asset limit redefinition in order to avoid arguments based on old stereotypes or claims that people will take advantage of the system if the state eliminates asset limits. If you choose legislative advocacy, you should work with other advocates to draft a bill and target sponsors and supporters. Research and examples from other states should be shared, and messages to use in support of asset-test reform should be suggested. You should organize witnesses to testify at legislative committee hearings. It should be noted that passage by the legislature is only part of what is needed for implementation; pressure should be maintained on the governor to sign the bill.

An administrative strategy can be very low-cost and subtle, but it requires support from the agency and the executive branch. Advocates in each state have to weigh whether to make an administrative change a public campaign. Sometimes, too much attention can backfire.

If you choose administrative advocacy, request meetings with the director or policy staff of the relevant agency. Bring up the question of reforming the rules on asset limits when you discuss other benefits-related issues with the agency. Share research and examples from other states. Offer to help draft rules or comment on existing drafts. When new rules are proposed, submit public comments and generate additional support from other advocates and legislators. In some cases it may be useful to convene a policy working group to review changes before they are fully implemented, so key stakeholders are aware of the new rules.

Some groups may be constrained from participation in legislative advocacy because of “lobbying” restrictions on legal aid and other nonprofit organizations. Advocating an administrative rule change does not fall within those restrictions and may offer a better alternative for groups subject to such restrictions.

 

Key Advocacy Decisions6

1. Do your research. Experience suggests that advocates of asset limit reform must do their research. Familiarity with reform in other states can be very helpful in making a case for reform in your own state. Consider whether the asset limit reasonably allows recipients and applicants sufficient net worth to sustain them for at least three months during a loss of income, or whether the rules promote persistent asset poverty that keeps a person living on the edge.7 Financial planners often advise keeping at least three to six months of living expenses readily accessible as an emergency fund.

Consider whether the asset rules allow a person to advance beyond a poverty or basic self-sufficiency level to more secure financial footing and prosperity. Think of the cost of buying an average home and the amount needed for a downpayment; the cost, including maintenance, of a reliable used car to get to work; the cost of college tuition or starting a business; the need to save for retirement in addition to social security; the need to save for an adult or child’s college education or training; out-of-pocket health care costs; and other big-ticket items.8 The lower the asset limit and the fewer the exemptions, the more onerous the asset rule.

2. Gather information on impact of proposed changes. Determine the impact of proposed changes in asset limits. The state agency should be able to determine from its database how many applicants and recipients were denied benefits or cut off benefits because of assets that exceeded current rules. Go back several years to show that few people are likely to become eligible as a result of rule changes. If the agency is unwilling to share the information, advocates can file a Freedom of Information Act request.Find out the total current caseload, number of child-only cases and caseload decline since welfare reform.

Solicit the agency’s help in estimating the cost of administering the current rules and the estimated cost savings from proposed changes. If you cannot obtain the agency’s estimate, look to estimates from states with similar programs and caseloads. Based on the number of applicants and recipients denied benefits under current rules, project the number and cost of persons who will become eligible under the new rules. If caseload increases are projected, distinguish between costs that the state would bear (e.g., TANF) and costs that the federal government would bear (e.g., SNAP).10 Describe how the new rules are consistent with state policies and goals to promote work, self-sufficiency, financial responsibility and upward mobility.

3. Develop and build upon relationships with state and county agencies. Advocates who have a working relationship with the agencies that administer the assistance programs should contact agency leaders to discuss proposed changes in asset limits. If you decide to pursue reform via administrative rule change, you will need the agency’s cooperation in proposing and advancing rules. If the agency that administers state-funded IDAs or financial education is not the same agency that administers assistance programs, seek the IDA agency’s advice and support. If you do not have a direct relationship with the agency, collaborate with an organization that does.

Request a meeting to discuss the asset rules and possible changes, and bring to the meeting the information and arguments you have gathered and a list of questions. Explain the problems that the rules cause and the source of authority to change them, and ask the agency’s opinion and advice on how to proceed. Gather information about the likely impact, including administrative savings and any projected costs. Ask advice on which allies to recruit. Seek consensus on how public the asset reform efforts should be. Also, consider connecting agency staff to administrators from states that have successfully removed asset limits.

Track the progress of the bill or proposed rule and submit public comments, repeatedly making the case for raising or eliminating asset limits or exempting additional assets. Even when the topic is tangential, submit comments that allude to problems posed by asset limits. For example, if you have an opportunity to comment on service delivery or delays in processing applications or renewals, cite the administrative burden of verifying assets for all persons when so few have any countable assets.

If the agency is opposed to the reform of administrative rules on assets, then the agency is unlikely to submit or push for rule change, and your only recourse may be legislation. You will have an uphill battle if the affected agency opposes a bill.

4. Develop and build on relationships with the executive branch. Newly-elected officials sometimes create transition teams to suggest policy proposals. Use any opportunity to participate in a governor’s transition team to suggest the reform of rules on asset limits. State policy advocates frequently work with the governor’s policy and budget staff. Experienced staffers can often lend an insider’s view of the executive’s likely position on such reform and possible conflicts with other issues. Consult informally with contacts among the policy team and budget office to identify concerns and potential opposition, and determine whether an administrative or legislative route makes more sense. This can be accomplished through a simple phone call or e-mail or through a more formal letter or meeting.

5. Develop and build upon relationships with legislators. Whether you proceed via administrative rule change or legislation, you will probably need at least some legislators as allies. Often, a state board or committee of legislators must approve administrative rule changes. Determine which legislators sit on that board, and contact those with whom you have a good relationship. Even if you do not know any members of the administrative rules committee, you can consult with your district representatives, sponsors of bills on which you have worked, caucus leaders and human services committee leaders. If you take the administrative route, doing much legislative outreach may not be necessary. A better strategy may be to let the agency quietly propose rule changes without attracting much attention.

6. Solicit input from advocates and policy groups. Remember the strength that numbers confer. Seek out other advocates, legislators and coalitions likely to know about and support the reform of rules on asset limits. These other groups may have contacts with the state welfare agency, governor or legislators; they could prove helpful in advancing reform. They can support the strategy through comment letters, phone calls and other contacts.

Legal aid attorneys handling benefit cases are likely to have firsthand knowledge of how asset limits adversely affect clients. Legislators may have heard from constituents who were denied benefits and forced to spend retirement funds or emergency funds. The majority of states now have asset-building coalitions, which can be powerful allies. You may even consider approaching your state bankers’ association for support because reform could mean more deposits, especially if recipients opt for direct deposit of cash benefits into bank accounts.

 

Communication Strategies11

Public education is key. Communicate your reform message through the media, through presentations and policy briefings, at agency meetings, in legislative committee hearings, through websites and through other, less formal means. Consider what steps will ensure that agency personnel, applicants and recipients learn about any changes in asset rules. Offer to help the agency update caseworkers on the new rules via in-person training, materials or other technical assistance. Where possible, conduct an evaluation after the law or rule takes effect to document any change in the caseload or other significant impact. If benefit recipients participate in financial education, IDA programs or other savings and asset-building activities, incorporate the rule change into course materials.12 Share information on asset rules with other agencies serving low-income families.

Advocates should anticipate certain questions and be prepared with firm answers. For example:

Q:  Will asset reform make the state appear “soft on welfare”?

A:  No. Few applicants and recipients have assets anyway, and strict work requirements and time limitations reduce the risk that people will take advantage of the system.

Q:  Will asset reform cause caseloads and costs to the state to increase significantly?

A:  Experience in states that have reformed or eliminated TANF and Medicaid asset tests teaches that caseloads do not significantly increase as a result. In SNAP, while eliminating asset tests will likely increase the caseload, all SNAP benefits (and half of the administrative costs) are paid by the federal government, resulting in minimal costs to the state. In addition, removing asset tests can reduce caseworker time spent on documenting resources, so the extra administrative cost of processing additional cases is generally offset by the work reduction in asset verification.

Messages: In promoting the reform of rules on asset limits, consider using the following messages:

  • Asset limits are confusing, inefficient, counterproductive and inequitable.
  • Asset limits send the wrong message and discourage saving.
  • States have authority to reform asset rules.
  • Other states have reformed asset rules.
  • Reforming rules on asset limits is good public policy and consistent with state goals to encourage saving, promote self-sufficiency and reduce dependence.
  • Abolishing asset limits reduces administrative burdens and cost.

 


1 Leslie Parrish, To Save, or Not to Save? Reforming Asset Limits in Public Assistance Programs to Encourage Low-income Americans to Save and Build Assets, (Washington, DC: New America Foundation, 2005), p.9.

2 Vernon Smith, Eileen Ellis and Christina Chang, Eliminating the Medicaid Asset Test: A Review of State Experiences (Menlo Park: The Henry J. Kaiser Family Foundation, 2001), p.14.

3 Leslie Parrish, To Save, or Not to Save? Reforming Asset Limits in Public Assistance Programs to Encourage Low-income Americans to Save and Build Assets, (Washington, DC: New America Foundation, 2005), p.9.

4 See Oregon TANF Caseload Reduction Report, December 2010, (http://www.dhs.state.or.us/policy/selfsufficiency/publications/2010ACF-202Overall.pdf). More time is needed to assess whether those predictions bear out.

5 This section is based on: Dory Rand, “Reforming State Rules on Asset Limits: How to Remove Barriers to Saving and Asset Accumulation in Public Benefit Programs,” Clearinghouse Review Journal of Poverty Law and Policy, (March-April 2007), p.625-36.

6 This section is based on: Dory Rand, “Reforming State Rules on Asset Limits: How to Remove Barriers to Saving and Asset Accumulation in Public Benefit Programs,” Clearinghouse Review Journal of Poverty Law and Policy, (March-April 2007), p.625-36.

7 CFED’s Assets & Opportunity Scorecard documents the level of asset poverty in each state. Persons who lack sufficient net worth to survive for three months if income is cut off are considered asset poor.

8 For a helpful calculation of a low-income person’s retirement needs, see Zoe Neuberger, et al. Protecting Low-Income Families’ Retirement Savings: How Retirement Accounts Are Treated in Means-Tested Programs And Steps to Remove Barriers to Retirement Saving, (Washington, DC: The Retirement Security Project, 2005), supra note 12, at 12.

9 Freedom of Information Act, 5 U.S.C. 552 (2007).

10 The federal government pays 100% of food stamp program benefits and divides administrative costs with the states. See 7 U.S.C. § 2020 (2007).

11 This section is based on: Dory Rand, “Reforming State Rules on Asset Limits: How to Remove Barriers to Saving and Asset Accumulation in Public Benefit Programs,” Clearinghouse Review Journal of Poverty Law and Policy, (March-April 2007), p.625-36.

12 Your Money & Your Life: A Financial Education Curriculum for Limited Resource Audiences (Urbana, IL: University of Illinois Extension, 2004). See especially Chapter 7: Taking Advantage of Public Benefits.

CASE STUDIES

For each edition of the Assets & Opportunity Scorecard since 2007, CFED has worked with experts in the field to capture detailed stories of noteworthy state policy changes—both policy victories and instructive defeats. These case studies appear in the Resource Guides for each policy priority. 

Eliminating the TANF Asset Test in Louisiana (published October 2012)
Agency leadership was instrumental in eliminating the TANF asset test in Louisiana in 2009. TANF administrators were particularly influenced by a cost-benefit analysis conducted by an outside contractor earlier that year. The analysis pointed out that the state’s successful TANF-funded Individual Development Account (IDA) program was in direct conflict with the asset test. On the one hand, the state was encouraging families to save and accumulate assets through the IDA program; while on the other hand, families were being penalized for owning assets through the TANF asset test. Click here to read more.

Ohio and Virginia Pioneer the Elimination of TANF Asset Limits (updated October 2012)
Ohio was the first state to abolish asset limits in TANF; it did so in 1997. Although Ohio budget analysts predicted a small increase in the TANF caseload as a result of eliminating the asset test, no caseload increase or political fallout occurred…Like Ohio’s policy revisions, Virginia’s elimination of asset tests was part of a broader state welfare reform package that simplified earned income disregards, disregarded student earnings, simplified the determination of self-employment and aligned processing time with other assistance programs. Click here to read more.

RESOURCES

For a two-page overview on lifting asset limits in public benefit programs, download CFED’s Policy Brief.

For an in-depth compendium of analysis, research, and resources on lifting asset limits in public benefit programs, download CFED’s Resource Guide.

Organizations and Experts

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