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Reforming State Rules on Asset Limits

How to Remove Barriers to Saving and Asset Accumulation in Public Benefit Programs

By Dory Rand

Most states impose limits on the assets that an applicant for or recipient of public benefits may possess and still be eligible. Awareness is growing that such eligibility criteria are counterproductive. Administering asset tests imposes an administrative burden on state agencies, and few low-income households have any assets. The tests also send the inappropriate message that accumulating assets causes problems. Federal law gives states flexibility in setting asset limits, however, and a growing number of states are reforming their asset rules, including eliminating the tests altogether in their cash assistance programs.

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