Reforming Asset Limits

AmeriCorps VISTA Denied Food Stamps

"My experience with asset limits occurred in August 2005 when I was seeking public aid as an AmeriCorps VISTA member in Illinois. My story is unique in that I was working in a state that had recently eliminated asset limits for retirement accounts. Caseworkers in local offices of the Illinois Department of Human Services, however, did not yet fully understand the new rules, which had become effective just four months prior..." Click here to read the rest of Ian's story.

Asset limits discourage saving

Asset limits for public benefit recipients are barriers to saving. Polices that restrict eligibility for public assistance programs to households with minimal assets discourage savings and encourage participants to “spend down” resources needed to for long-term security in order to obtain short-term assistance.

Typical Asset Limits

The following assets are typically counted against applicants and recipients in programs such as Food Stamps, which affects over one in eleven Americans every month.

Savings Accounts over $2,000
Vehicles
401Ks, IRAs, and non-pension retirement savings
College savings plans

For more information on asset limits by program and state, see the State Asset Limit Toolkit

Why is asset reform needed?

Asset reform is needed so that people can save for emergencies and for the future.

Emergency Expenses

Car repairs: up to $2,000
Job loss: 3-6 monthly living expenses
Average uninsured emergency room visit: $1,000

Saving for the Future

Retirement
College
Down payment for homeownership

Three ways to reform asset limits:

Eliminate asset limits in benefits programs
Raise the asset limit
Exclude categories of assets, such as retirement savings, education savings accounts, vehicles and health savings accounts.

Asset Limit Policy Resources

Federal Asset Limit Policy Resources

Congress and federal agencies have authority to determine asset limit policies in federally funded public benefit programs including the Supplemental Security Income (SSI) program, Food Stamps, TANF, Medicaid, and SCHIP.

Center for American Progress From Poverty to Prosperity: A National Strategy to Cut Poverty in Half

Retirement Security Project/Brookings Institute The Effects of Asset Tests on Saving

New America Foundation Federal 2007 Asset Agenda

New America Foundation Freedom to Save Act event,July 2007

Center on Budget and Policy Priorities,Retirement Security Project Increasing Retirement Saving: Clarifying Food Stamp Asset Test

The Center for Law and Public Policy Clearing a Path to Savings: Removing Federal Barriers in Public Assistance Programs

State Asset Limit Policy Resources

States have the authority under current federal law to determine asset limit polices in state-administered public benefit programs such as TANF, Medicaid, and SCHIP programs and, to some extent, in the Food Stamp program.

Center on Budget and Policy Priorities Aligning State Policies

CFED 2007-2008 Assets & Opportunities Scorecard

Center on Budget and Policy Priorities States’ Vehicle Asset Policies in the Food Stamp Program

New America Foundation State Policy Options for Building Assets 2007

New America Foundation To Save, or Not to Save?

State Asset Limit Toolkit

Shriver Center Resources

The Clearinghouse Review Reforming State Asset Limit Rules: How to Remove Barriers to Saving and Asset Accumulation in Public Benefit Programs

State Asset Limit Toolkit

Strategies and Options for Eliminating Asset Limits PowePoint

National conference call on asset limit reform (transcript)

Other Resources