NAF calls to remove asset caps for assistance programs

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Limits on the assets of those using state and federal assistance programs creates confusion around eligibility and unnecessarily burdens those programs with difficult paperwork and applications, says policy analyst Aleta Sprague of the New America Foundation.

Speaking at a NAF Oct. 31 panel, Sprague said the "paperwork requirements themselves have been found to deter some people from accessing the benefits they both need and qualify for."

These caps also present a dichotomy where families must choose between immediate needs and future financial security.

Sprague said confusion also exists because asset caps and what items are counted in the limits vary from state to state and even within assistance programs in a state. While not all state programs have asset limitations, only 10 states have caps for the Supplemental Nutritional Assistance Program (also called food stamps), when caps are in place they are often so low they "compel families to remain in asset poverty to receive any assistance," says Sprague.

She champions limit elimination for a variety of reasons, but focused mainly on their ineffectiveness. In Alabama, for example, the year before it eliminated an asset test for the Temporary Assistance to Needy Families program, only 15 out of the 21,000 denied applications were due to excess assets.

"Evaluating assets is not the most efficient way for eligibility workers to be spending their time" because so few are disqualified using the metrics, said Sprague.

When Virginia evaluated the elimination of its TANF asset test, it projected spending $127,000 more per year to support 40 more families but also estimated a savings of $323,000 in administrative costs, says Sprague. Colorado estimates that the removal of its TANF asset test would knock 15 minutes off of every case interaction. Ohio previously eliminated its SNAP asset test because it was facing large sanctions over SANP error rates and an independent consultant said one way to reduce the error rate was to remove the asset cap.

Asset caps and test are an "error prone assessment" with "unpredictable and seemingly arbitrary" rules, Sprague said. The elimination of both would cut red tape for applications and eliminate burdens and costs to maintain these programs.

For more:
- watch the panel presentation.
- read a NAF paper on the issue (.pdf)

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