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4 RESOuRCE GuIDE: LIFTING ASSET LIMITS IN PubLIC bENEFIT PROGRAMS State Asset Limits by Program, 2009 State tAnf15 famil
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RESOURCE GUIDE:
2009-2010 lifting asset limits in ASSETS & OPPORTUNITY 1 public benefit programs SCORECARD OVERVIEW Many public benefit programs – including cash welfare and Medicaid – limit eligibility to those with few or no assets. If individuals or families have assets exceeding the state’s limit, they must “spend down” longer-term savings in order to receive what is often short-term public assistance. These asset limits, which were originally created to ensure that public resources did not go to “asset-rich” individuals, 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 kinds of resources that allow people to move off public benefit programs. Yet asset limits can discourage anyone considering or receiving public benefits from saving for the future.
WHAT STATES CAN DO States determine many key policies related to the receipt of benefits. States have discretion in setting or eliminating asset limits for Temporary Assistance for Needy Families (TANF), Medicaid and the Children’s Health Insurance Program (CHIP).2 In addition, states have the authority to address asset limits for the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp program.3 Program
Asset limits
TANF
$2,000–$3,000 in most states
Family Medicaid5
$1,000–$30,000 in states that have limits
SNAP
$2,000 ($3,000 if disabled or elderly household member)–$10,000 in states that have limits
What states can do n Eliminate limits entirely, as Louisiana, Ohio and Virginia have done4 n Substantially increase limits so they do not affect most recipients n Exclude classes of assets, such as individual development, retirement or college savings accounts n Eliminate limits entirely, as more than 20 states have done n Substantially increase limits so they do not affect most recipients n Exclude classes of assets, such as individual development, retirement or college savings accounts n Eliminate limits entirely, as 24 states have done n Substantially increase limits so they do not affect most recipients6
1 CFED acknowledges the expert assistance of Stacy Dean and Colleen Pawling of the Center on Budget and Policy Priorities and Dory Rand of the Woodstock Institute in developing and reviewing this guide.
2 Only Oregon and Texas have asset limits in their CHIP programs. 3 Dean, S. (2002). The SNAP Program. 2002 Federal IDA Briefing Book: How IDAs Affect Eligibility for Federal Programs. Washington, DC: CFED and the Center on Budget and Policy Priorities.
4 In Illinois, administrative rules to eliminate the TANF and General Assistance asset tests were proposed in April 2009 and are expected to be voted on by the Joint Committee on Administrative Rules later in the year.
5 Provides Medicaid to both children and their parents. 6 Federal law already exempts many important classes of assets in the SNAP program, including retirement accounts and education savings accounts.
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ELEMENTS OF A STRONG POLICY The best option: Based on extensive research by many national and state organizations,7 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 asset building should be avoided. However, if a state has not yet eliminated asset limits entirely, it can take several intermediate steps: n States can increase asset limits and/or index them to inflation, thereby lessening the likelihood that participants or applicants will reach the limit. n States can exempt certain classes of assets from their asset limits, particularly in the TANF and Medicaid programs. Most programs exclude some “illiquid” assets, such as a home or defined benefit pension. However, 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 (IDAs) – often count against the asset limit in TANF and Medicaid. States should exempt these types of assets. In addition, vehicles, which are vital for many to find and maintain employment, should be exempted.8 States should also exempt Earned Income Tax Credit (EITC) refunds for at least a year to offer protection from emergencies and unexpected expenses.9 (See the Appendix for a state-by-state list of key assets excluded from TANF and Medicaid programs.)
WHAT STATES HAVE DONE Since 1996, 23 states have eliminated Medicaid asset limits entirely; three states have eliminated TANF asset limits; and 24 states have eliminated SNAP asset limits, with several more planning to do so in late 2009. Three states have substantially increased the asset limits in their Medicaid or TANF programs, and 32 states have excluded several important categories of assets from these limits in one or both programs.10, 11 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.12 In New Mexico, state officials anticipated 38 more people would enroll in Medicaid per month (with an associated increase of $23,000 in direct costs to the state, negligible in comparison with a $5.7 billion annual state budget).13 In Ohio and Virginia, the “early adopters” of TANF asset limit elimination, caseloads decreased in the years following the change.14 In Louisiana, where the TANF asset test was not eliminated until 2009, more time will be needed to determine the long-term effects on caseloads. 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 individualized eligibility determinations and verifications.
7 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.
8 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. 9 Parrish, L. (2005, May). 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, p.1.
10
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.
11 The Food, Conservation and Energy Act of 2008 exempted many important classes of assets in the SNAP program, including retirement accounts and education savings accounts.
12 Parrish, p.9. 13 Smith,V., Ellis E. & Chang, C. (2001, April). Eliminating the Medicaid Asset Test: A review of state experiences. Menlo Park, CA: The Henry J. Kaiser Family Foundation, p.14. Retrieved March 7, 2007 from www.kff.org/medicaid/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=13750. New Mexico budget: Retrieved March 7, 2007 from http://legis.state.nm.us/lcs/lfc/lfcdocs/fy08%20lfc%20rec.pdf.
14 Parrish, p.9.
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STATE PRECEDENTS: ASSET LIMITS IN TANF, FAMILY MEDICAID AND SNAP See table on the following pages for state-level breakdowns of these maps. Asset Limits in TANF No action taken
WA MT
WY
UT HI
WI
SD
AZ
KS
OH
IN
MO
WV
KY
VT NH MA NJ CT RI DE MD DC
VA NC
TN
OK
NM
AR
SC MS
AL
GA
LA
TX
AK
Excludes 4+ asset classes
PA
IA IL
CO
CA
NY MI
NE
NV
Raised to $15,000/indexed to inflation
MN
OR ID
Eliminated asset limits
ME
ND
Raised to $15,00/indexed to inflation and excludes 4+ asset classes
FL
Asset Limits in Family Medicaid No action taken
WA MT
WY
UT HI
WI
SD
CO
CA AZ
NY PA
IA
MO
OK
OH
IN
IL KS
NM
WV
KY
VT NH MA NJ CT RI DE MD DC
VA NC
TN AR
SC MS
AL
GA
LA
TX
AK
Excludes 4+ asset classes
MI
NE
NV
Raised to $15,000/indexed to inflation
MN
OR ID
Eliminated asset limits
ME
ND
Raised to $15,00/indexed to inflation and excludes 4+ asset classes
FL
Asset Limits in SNAP No Action Taken
WA MT
WY
UT HI
WI
SD
CA AZ
CO
NY MI PA
IA
NE
NV
Raised Above $2,000
MN
OR ID
IL KS OK
NM TX
IN
MO
OH KY
WV
VA NC
TN AR
SC MS
AK
Eliminated Asset Limits
ME
ND
AL
GA
LA
VT NH MA NJ CT RI DE MD DC
FL
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State Asset Limits by Program, 2009 TANF15 State
Applicants
Recipients
Alabama
$2,000; $3,000 if household includes someone over age 60
$2,000; $3,000 if household includes someone over age 60
Alaska
$2,000; $3,000 if household includes someone over age 60
$3,000
Arizona
$2,000
$2,000
Arkansas
$3,000
California
$2,000; $3,000 if household includes someone over age 60
Family Medicaid16 Applicants
Recipients
SNAP17, 18 Applicants and recipients
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
$2,000
$2,000
$2,000; $3,000 if household includes elderly or disabled members
Eliminated
Eliminated
Eliminated
Eliminated
$3,000
$1,000
$1,000
$2,000; $3,000 if household includes elderly or disabled members
$2,000
$3,000 for up to two household members; subsequent increase of $150 per person
$3,000 for up to two household members; subsequent increase of $150 per person
Eliminated19
Colorado
$15,000
$15,000
Eliminated
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
Connecticut
$3,000
$3,000
Eliminated
Eliminated
Eliminated
Delaware
$1,000
$1,000
Eliminated
Eliminated
Eliminated
District of Columbia
$2,000; $3,000 if household includes someone over age 60
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
$2,000
Eliminated
15 2007 Welfare Rules Databook. (2008, December). Urban Institute, with U.S. Department of Health and Human Services. Retrieved July 25, 2009 from http://anfdata.urban.org/databooks/2007%20databook.xls.
16 Challenges of Providing Health Coverage for Children and Parents in a Recession: A 50-State Update on Eligibility Rules, Enrollment and Renewal Procedures, and Cost-Sharing Practices in Medicaid and CHIP in 2009. (2009, January). Kaiser Commission on Medicaid and the Uninsured, Table 8. Retrieved July 25, 2009 from www.kff.org/medicaid/upload/7855_TABLES.pdf.
17 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 ($3,000 for households that include an elderly or disabled person), such as households where some members have a different status than others (e.g. citizenship). Data provided by the Center on Budget and Policy Priorities.
18 As of July 2009, the District of Columbia, Hawaii, Illinois and New Jersey each planned to eliminate SNAP asset tests, but had not yet finalized the process. 19 California eliminated SNAP asset tests as of July 1, 2009, but each county has until January 2010 to implement.
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TANF15 State
Applicants
Recipients
Family Medicaid16 Applicants
Recipients
SNAP17, 18 Applicants and recipients
Florida
$2,000
$2,000
$2,000
$2,000
$2,000; $3,000 if household includes elderly or disabled members
Georgia
$1,000
$1,000
$1,000
$1,000
Eliminated
Hawaii
$5,000
$5,000
$3,250
$3,250
$2,000; $3,000 if household includes elderly or disabled members
Idaho
$2,000
$2,000
$1,000
$1,000
Eliminated20
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
$1,000
$2,000; $3,000 if household includes elderly or disabled members
$2,000
$2,000; $3,000 if household includes elderly or disabled members
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
$2,000
$2,000; $3,000 if household includes elderly or disabled members
Illinois
Indiana
Iowa
Kansas
Kentucky
$2,000
$1,000
$2,000
$2,000
$2,000
$2,000
$1,500
$5,000
$2,000
$2,000
Eliminated
$1,000
$2,000
Eliminated
$2,000
Louisiana
$2,000
$2,000
Eliminated
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
Maine
$2,000
$2,000
$2,000
$2,000
Eliminated21
Maryland
$2,000
$2,000
Eliminated
Eliminated
Eliminated
Massachusetts
$2,500
$2,500
Eliminated
Eliminated
Eliminated
Michigan
$3,000
$3,000
$2,000 for one person; $3,000 for two people
$2,000 for one person; $3,000 for two people
Eliminated22
20 Idaho’s rule is temporary and must be renewed periodically by the legislature. It is currently authorized through June 2010. 21 Maine excludes all assets only for households with children. 22 Michigan excludes all assets only for households with two or more people.
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State Asset Limits by Program, 2009 (continued) TANF15 State Minnesota
Mississippi
Applicants $2,000
$2,000
Family Medicaid16
Applicants and recipients
Recipients
Applicants
Recipients
$5,000
$10,000 for one person; $20,000 for two or more people
$10,000 for one person; $20,000 for two or more people
$7,000 (all vehicles exempt)
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
$2,000
Eliminated
Missouri
$1,000
$5,000
Eliminated
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
Montana
$3,000
$3,000
$3,000
$3,000
Eliminated
Nebraska
$4,000 for one person; $6,000 for two or more people
$4,000 for one person; $6,000 for two or more people
$6,000
$6,000
$2,000; $3,000 if household includes elderly or disabled members
Nevada
$2,000
$2,000
$2,000
$2,000
Eliminated
New Hampshire
$1,000
$2,000
$1,000
$2,000
Eliminated23
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
New Jersey
$2,000
$2,000
Eliminated
New Mexico
$1,500 in liquid resources; $2,000 in illiquid resources
$1,500 in liquid resources; $2,000 in illiquid resources
Eliminated
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
New York
$2,000; $3,000 if household includes someone over age 60
$2,000; $3,000 if household includes someone over age 60
$6,600
$6,600
Eliminated
North Carolina
$3,000
$3,000
$3,000
$3,000
$2,000; $3,000 if household includes elderly or disabled members
North Dakota
$3,000 for one person; $6,000 for two people; $25 per person thereafter
$3,000 for one person; $6,000 for two people; $25 per person thereafter
Eliminated
Eliminated
Eliminated
23 New Hampshire excludes all assets only for households with children.
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SNAP17, 18
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CFED: 2009-2010 ASSETS & OPPORTUNITY SCORECARD
TANF15
Family Medicaid16
SNAP17, 18
State
Applicants
Recipients
Applicants
Recipients
Applicants and recipients
Ohio
Eliminated
Eliminated
Eliminated
Eliminated
Eliminated
Oklahoma
$1,000
$1,000
Eliminated
Eliminated
Eliminated
Oregon
$2,500
$10,000
$2,500
$2,500
Eliminated
Pennsylvania
$1,000
$1,000
Eliminated
Eliminated
Eliminated
Rhode Island
$1,000
$1,000
Eliminated
Eliminated
Eliminated
South Carolina
$2,500
$2,500
$30,000
$30,000
$10,000 (one vehicle exempt)
$2,000
$2,000; $3,000 if household includes elderly or disabled members
South Dakota
$2,000
$2,000
$2,000
Tennessee
$2,000
$2,000
$2,000
$2,000
$2,000; $3,000 if household includes elderly or disabled members
Texas
$1,000
$1,000
$2,000
$2,000
$5,000 (excludes one vehicle up to $15,000)
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
Eliminated
Eliminated
Utah
$2,000
$2,000
$2,000 for one person; $3,000 for two people; $3,025 for three people
Vermont
$2,000
$2,000
$3,150
Virginia
Eliminated
Eliminated
Eliminated
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
Washington
$1,000
$4,000
$1,000
$1,000
Eliminated
West Virginia
$2,000
$2,000
$1,000
$1,000
Eliminated
Wisconsin
$2,500
$2,500
Eliminated
Eliminated
Eliminated
Eliminated
$2,000; $3,000 if household includes elderly or disabled members
Wyoming
$2,500
$2,500
Eliminated
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STATE PRECEDENTS: OHIO AND VIRGINIA PIONEER THE ELIMINATION OF TANF ASSET LIMITS24 In 1997, Ohio became the first state to abolish asset limits in TANF.25 Long-serving legislator Rep. Bob Netzley (R) proposed the abolition. Proponents argued that: n In light of welfare reform’s emphasis on work, caseworkers should focus on helping people find employment and maintain their connection to the labor force; n Workers need vehicles and savings to obtain and retain jobs, address emergencies and advance in the labor market; and n The state’s responsibility is to support work efforts through policies such as work requirements, earned income disregards and car ownership programs.26 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. In fact, Ohio caseloads remained at recordlow levels (70% below 1992 peak levels) as of late 2008, despite the national recession and increases in the TANF benefit level.27 In 2003, the Virginia State Board of Social Services adopted administrative rules that eliminated asset limits in its TANF and family and child medical programs, evaluated only liquid assets in its SNAP Program and eliminated the TANF lump-sum rule, which had made recipients ineligible for cash assistance after receiving lump-sum payments such as retroactive Supplemental Security Income (SSI) benefits or personal injury settlements.28 The Virginia Department of Social Services proposed these TANF changes during Gov. Mark Warner’s Democratic administration. The state board of the Department of Medical Assistance Services promulgated the regulatory changes relating to Medicaid for families and children. 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. When these rules were proposed, Virginia provided cash assistance to families with countable resources of up to $1,000, one vehicle and up to $5,000 in an account for the purposes of self-sufficiency. The Department of Social Services estimated that eliminating the asset test would “increase the assistance provided by $127,200 for 40 families and provide $323,050 savings in administrative staff time annually.”29 The department argued that asset test elimination would streamline and simplify program rules, align TANF with other assistance programs, improve service delivery and reduce the administrative burden on the agency, applicants and recipients.30 Mark Golden, the department’s manager of economic assistance and employment, explained that asset tests were no longer necessary because: n Welfare reform’s time limits and work requirements made them obsolete; n People use their resources before applying for benefits;
24 This section is from: Rand, D. (2007, March-April). 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. Chicago, IL. Retrieved from www.assetpolicy.org/fckfiles/File/CR2007MarApr%20Asset%20Limit-final.pdf.
25 Ohio Rev. Code Ann. § 5107.10(C) (LexisNexis), http://onlinedocs.andersonpublishing.com/oh/1pExt.dll?f=templates&fn=main-h.htm&cp=PORC. 26 Interview with Joel Rabb, bureau chief for Program Integrations and Coordination, Ohio Department of Job and Family Services. November 8, 2005. 27 Characteristics and Financial Circumstances of
TANF Recipients. U.S. Department of Health and Human Services. Caseload data retrieved July 25, 2009 from www.acf.hhs.gov/programs/ofa/data-reports/caseload/caseload_recent.html.
28 22 Va. Admin. Code § 40-295-50 (2003), http://leg1.state.va.us/cgi-bin/legp504.exe?000+reg+22VAC40-295-50. 29 Virginia Department of Planning and Budget, Economic Impact Analysis, Code of Virginia,Volume 22, Section 40-295-50 (2003). 30 Proposed Regulation Agency Background Document, amendments to Code of Virginia,Volume 22, Section 40-295-50) 2 (2003).
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n Making people get rid of resources, only to encourage them to build resources back up, is counterproductive; n Allowing asset development puts greater emphasis on employment and self-sufficiency; and n Eliminating the asset tests has little impact on the caseload (only 1,200 of 60,000 applications, or 0.5%, were denied due to excess assets).31 The Virginia Department of Planning and Budget believed the proposed change posed a fiscal risk. The department suggested that the state retain the asset test but achieve administrative savings by enforcing the test only through random verification.32 Nonetheless, the rules were adopted as proposed, and all eligibility workers attended training sessions on the new rules. Since enactment of the new rules, Virginia has not seen a significant long-term caseload increase, even in the current national recession.33 Virginia’s TANF caseload in December 2008, one year after the start of the recession, was 37% lower than in 1997.34
MAKING THE CASE: KEY STRATEGIC DECISIONS35 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 feasible. 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 endure. Legislative advocacy has the potential to generate more public interest and media coverage than a rule change. A legislative battle involves a lot more votes and energy than an administrative change. Then again, 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 also 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.
31 Golden, M. Asset Policy in Virginia. Presentation at the Center for Social Development State Policy Conference, April 21, 2005. 32 Virginia Department of Planning and Budget, supra note 31. 33 Golden, supra note 33. 34 Characteristics and Financial Circumstances of
TANF Recipients. U.S. Department of Health and Human Services. Caseload data retrieved July 25, 2009 from www.acf.hhs.gov/programs/ofa/data-reports/caseload/caseload_recent.html.
35 This section is largely based on: Rand, D. (2007, March-April). 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. Chicago, IL.
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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. Some groups may be constrained from participation in legislative advocacy because of “lobbying” restrictions on legal aid and other nonprofit organizations.36 Advocating an administrative rule change does not fall within those restrictions and may offer a better alternative for groups subject to lobbying rules.
MAKING THE CASE: SIX GUIDELINES FOR A SUCCESSFUL CAMPAIGN37 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.38 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 poverty or basic self-sufficiency levels 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 vehicle 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; outof-pocket health care costs; and other big-ticket items.39 The lower the asset limit and the fewer the exemptions, the more onerous the asset rule.
2. Gather information on the 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 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.40 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
36 Election Activities Checklist. Alliance for Justice. Retrieved from www.afj.org/nonprofit/electoral_activities_01.pdf. 37 This section is largely based on: Rand, D. (2007, March-April). 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. Chicago, IL. Retrieved from www.assetpolicy.org/fckfiles/File/CR2007MarApr%20Asset%20Limit-final.pdf.
38 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.
39 For a helpful calculation of a low-income person’s retirement needs, see Neuberger et al., supra note 37, at 12. 40 Freedom of Information Act, 5 U.S.C. 552 (2007).
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would bear (e.g., TANF) and costs that the federal government would bear (e.g., SNAP).41 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 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.
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 their 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
41 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
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. Seventeen or more states now have asset or savings coalitions or state agencies whose mission is to expand financial security, savings and assets.42 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.
MAKING THE CASE: COMMUNICATIONS STRATEGIES43 Public education is key. Communicate your reform message through the media, presentations and policy briefings, agency meetings, legislative committee hearings, Web sites 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.44 Share information on asset rules with other agencies serving low-income families. Be prepared for questions. 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.
42 McCulloch, H. (2005, July). Promoting Economic Security for Working Families: State Asset-building Initiatives. Retrieved from http://content.knowledgeplex.org/kp2/cache/documents/106925.pdf.
43 This section is based on: Rand, D. (2007, March-April). 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. Chicago, IL. Retrieved from www.assetpolicy.org/fckfiles/File/CR2007MarApr%20Asset%20Limit-final.pdf.
44 Your Money & Your Life: A Financial Education Curriculum for Limited Resource Audiences. (2004). Urbana, IL: University of Illinois Extension. See especially Chapter 7: Taking Advantage of Public Benefits. Retrieved from https://pubsplus.uiuc.edu/ACE-4-CD.html.
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resource guide: lifting asset limits in public benefit programs
CFED: 2009-2010 ASSETS & OPPORTUNITY SCORECARD
Messaging is key. In promoting the reform of rules on asset limits, consider using the following messages: n Asset limits are confusing, inefficient, counterproductive and inequitable. n Asset limits send the wrong message and discourage saving. n States have authority to reform asset rules. n Other states have reformed asset rules. n Reforming rules on asset limits is good public policy and consistent with state goals to encourage saving, promote self-sufficiency and reduce dependence. n Abolishing asset limits reduces administrative burdens and cost.
RESOURCES For more information on this policy, go to http://scorecard.cfed.org. Organizations and Experts Center on Budget and Policy Priorities (www.cbpp.org): Stacy Dean, Colleen Pawling Woodstock Institute (www.woodstockinst.org): Dory Rand Center for Law and Social Policy (www.clasp.org): Amy-Ellen Duke-Benfield New America Foundation (www.newamerica.net): Rourke O’Brien Sargent Shriver National Center on Poverty Law (www.povertylaw.org): Karen Harris Urban Institute (www.urban.org): Gretchen Rowe Creating Policy Language In legislation that creates a new type of account, such as a children’s savings account or IDA, it is important to include a section that clarifies the treatment of accounts for the purposes of determining eligibility for federal and state public benefits. The best general approach is to state that savings in new account should be disregarded in any asset test used to determine eligibility for public assistance. Note that it is important to include all public benefits programs that have asset tests: TANF, Medicaid, CHIP, SNAP, state- or countyfunded cash assistance and the state’s supplemental security income program, if the state supplements the federal benefit.45 Example: “Amounts in any account established under this act shall not be taken into account in determining any individual’s eligibility to receive, or the amount of, any federally or state-funded assistance or benefit, including student aid, TANF, Medicaid, [State Children’s Health Insurance in Texas or Oregon only] [and state supplemental security income if the state supplements the federal benefit] unless expressly prohibited by federal law.” Publications n Rand, D. (2007, March-April). 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. Chicago, IL. Retrieved from www.assetpolicy.org/fckfiles/File/CR2007MarApr%20Asset%20Limit-final.pdf. n Parrish, L. (2005, May). 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. Retrieved from www.newamerica.net/files/to%20save%20or%20not%20to%20save.pdf.
45 Only Oregon and Texas have asset limits in their CHIP programs; however, the recent passage of HB 2016 in Oregon will eliminate CHIP asset tests effective October 1, 2009. Housing and child care programs generally do not include asset tests. States may not prohibit programs that are completely controlled by federal law, such as SSI, from counting assets in these accounts.
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n Federal IDA Briefing Book: How IDAs Affect Eligibility for Federal Programs. (2002). Washington, DC: CFED and Center on Budget and Policy Priorities. Retrieved from www.cbpp.org/10-29-02wel.pdf. n Chen, H. & Lerman, R. (2005, August). Do Asset Limits in Social Programs Affect the Accumulation of Wealth? Washington, DC: Urban Institute. Retrieved from www.urban.org/UploadedPDF/311223_asset_limits.pdf. n O’Brien, R. (2006, September). Ineligible to Save? Asset Limits and the Savings Behavior of Welfare Recipients. Washington, DC: New America Foundation. Retrieved from www.newamerica.net/files/Ineligible%20to%20Save.pdf. n Neuberger, Z., Greenstein, R. & Sweeney, E. (2005, June). 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. Retrieved from www.cbpp.org/6-21-05socsec.pdf. n Dean, S. (2006, August). States Have the Flexibility to Set Their Own Food Stamp Asset Test. Washington, DC: Center on Budget and Policy Priorities. n State Asset Limit Toolkit. Sargent Shriver National Center on Poverty Law. Retrieved from www.povertylaw.org/advocacy/community-investment/asset-limit-tool-kit/asset-limit-tool-kithomepage.html/.
APPENDIX STATE PRECEDENTS: RESOURCES EXCLUDED FROM TANF AND MEDICAID, BY STATE46 Many states exclude the following resources: burial plots; equity value of a life estate; interest in real property; primary residence and surrounding contiguous land; restitution payments; disaster relief funds and similar federal payments; EITC in the month received and the following month; public assistance payments; real property that the family is making a good-faith effort to sell; Native American lands and payments; household goods and personal effects; inaccessible trust funds; vehicles used as the home; vehicles used for subsistence hunting and fishing; vehicles used to carry the household’s primary source of heating fuel or primary source of water; and vehicles with fair market value under $4,650 or equity value under $1,500. For ease of presentation, these resources are not included in the following table. Note that some states go above and beyond the basic vehicle exemption of $4,650 fair market value or $1,500 equity value; in such cases, the specific vehicle exemption is noted in the following table. State
Alabama
TANF
Medicaid Summary of excluded assets
n Resources used in a business n Funeral agreements including cash surrender value of burial insurance n Cash surrender value of life insurance n All vehicles owned by the household
Asset test eliminated
46 CFED analysis, based on data gathered from state TANF and Medicaid handbooks and administrators, June 1-July 31, 2009.
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State
TANF
Medicaid Summary of excluded assets
Alaska
n Funeral agreements n A vehicle is exempt if used for transportation to meet basic needs; subsistence hunting and fishing; to carry the household’s primary source of heating fuel or primary source of water; to go to and from work, school, training or a work activity; for selfemployment; or to transport a disabled household member
n Total value of a vehicle if used for transportation necessary to meet basic needs, including obtaining food, medical care or other essentials; for transportation to or from school, work or training; when used as the home; to transport a disabled family member; to produce self-employment income; or for a family member to participate in a work activity approved by the Alaska Division of Public Assistance
Arizona
n 529 and 530 educational savings accounts n IDAs for current recipients n Retirement accounts including 401(k)s and 457 plans n All vehicles n The first $1,500 in equity value of one prepaid burial plan or funeral agreement for each participant n Tools, equipment, machinery, animals and other items that may be used to produce income n A business checking account used only for self-employment
Asset test eliminated
Arkansas
n One vehicle n Income-producing real or personal property n Educational grants, loans and settlement payments that are intended and used for purposes which preclude their use for current living costs n EITCs and other tax refunds n Life insurance n IDAs n Funds in escrow up to $10,000 if recipient is engaged in microenterprise n Saving for Education, Entrepreneurship and Downpayment (SEED) children’s savings accounts
n Grants or loans to an undergraduate student for educational purposes n Payments received as a settlement intended and used for a specific purpose, such as medical bills, attorney’s fees, etc., or as compensation for the loss of a resource n Up to $1,500 of current equity value in funeral agreements per household member
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State
TANF
Medicaid Summary of excluded assets
California
n Cash value of life insurance policies n Cash value of pension plans/funds n For current recipients, any amount for education or job training of a parent or child, a business start-up or purchase of a home n Retirement plans, including 401(k)s, 403(b)s and 457 plans n Education savings accounts, including 529 accounts and Coverdells
n All vehicles are exempt if they are used for self-employment, employment, for income producing purposes, for long-distance travel essential for employment, transporting a disabled individual living in the home, as a home (only one vehicle may be exempt on this basis); or transporting the primary supply of fuel/water for the home n Other motor vehicles excluded if fair market value is under $4,650 or if equity value is under $1,500 n Income producing property n Livestock, poultry or crops n Personal property used in a trade or business n Pension funds or pension plans or Keoghs n Life insurance policies n Countable property equal to the amount of benefits paid under a state-certified, longterm care insurance policy n Irrevocable prepaid burial contracts n One revocable burial fund or revocable prepaid burial contract with a value of up to $1,500 per person
Colorado
n One motor vehicle per employed household member n Personal property necessary for selfemployment, such as inventory or tools n Retirement savings accounts n Health care savings accounts n IDAs n Education savings accounts, scholarships and educational stipends n EITC refunds n Life or disability insurance policies that may have a cash value
Asset test eliminated
Connecticut
n Assets set aside for future post-secondary education (if assets are not commingled with other assets and if the assets are under the child’s name in an UGMA or similar account) n Assets of a trade or business which are essential to self-support n Up to $1,800 in a revocable burial fund for each household member n IRAs, 401(k)s and Keoghs n Cash surrender value of life insurance n One vehicle, up to $9,500 n Security deposit held by a landlord n Student financial rewards47
Asset test eliminated
47 Individual Development Accounts and EITC payments are not formally excluded, but are generally not counted.
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TANF
State
Medicaid Summary of excluded assets
Delaware
n EITCs, including Advance EITC payments n Cash value of a life insurance policy n Up to $5,000 in Education and Business Investment Accounts (EBIAs) n Saving for Education, Entrepreneurship and Downpayment (SEED) accounts (treated as EBIAs) n Financial assistance received from school grants, scholarships, vocational rehabilitation payments, JTPA payments, educational loans and other loans
Asset test eliminated
District of Columbia
n All vehicles n EITC payments for a period of 12 months from receipt n IRAs, Keogh accounts, 401(k), 403(b) and 457 accounts, and all other pension and retirement funds as long as the funds remain in the retirement plan n 529 college savings accounts
Asset test eliminated
Florida
Georgia
Vehicles with equity value up to $8,500 IDAs Retirement accounts and pension plans Any grants, loans, gifts or scholarships received by the individual for educational expenses
n Pension and retirement accounts n IDAs n Up to $1,500 of equity value in a single funeral agreement per household member n Educational grants, loans, gifts or scholarships n Vehicles used for training, employment or education up to a combined total of $8,500
n IDA funds up to $5,000 n Up to $1,500 of the combined equity value of all burial contracts and burial insurance for each household member n Pension plans n Retirement plans, including 401(k)s and 457 plans, but not IRAs n EITC payments n Life insurance n Income-producing property n Real property rented to others that annually produces income consistent with fair market value n Health savings accounts n Child care savings accounts
n Proceeds from the sale of a home, for up to six months n Up to $1,500 of the combined value of all burial contracts and burial insurance for each household member n Tax-deferred income in a fund available only upon termination of employment, hardship or retirement n EITC payments n Unspent death benefits n Unspent portion of payments for education assistance which is excluded as a resource n Tools, machinery, stock and inventory essential to the production of goods or services n IDAs up to $5,000 for TANF recipients n Life insurance n Pension plans and 401(k)s n 529 college savings plans if applicant/recipient is beneficiary n Health savings accounts n Child care savings accounts n One vehicle if used either primarily as a dwelling or more than 50% of the time for income-producing purposes n Second vehicle with value up to $4,650
n n n n
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TANF
State
18
Medicaid Summary of excluded assets
Hawaii
n All vehicles n Educational assistance benefits n Funeral plans up to $1,500
n Bona fide loans, including but not limited to educational loans n All vehicles n Value of bona fide funeral or burial plans or agreements
Idaho
n Real property that produces income consistent with its fair market value n Equipment used in a trade or business, including tools, equipment and farm animals n Cash surrender value of a life insurance policy n Cash value of an irrevocable funeral agreement
n One vehicle; in two-parent families, a second vehicle used for medical transportation or employment n One funeral agreement for each family member, up to $1,500 n Retirement funds, including IRAs, Keoghs and employment-related retirement accounts n Cash value of life insurance policies
Illinois
n One vehicle n Prepaid funeral agreements worth $1,500 or less per person n Any savings and interest in which the money is accumulated from the earnings of a child n Equipment and inventory needed for a selfemployment enterprise n IDAs n Educational grants or loans for undergraduate students
Asset test eliminated
Indiana
n Funeral agreements up to $1,500 n One vehicle up to $5,000 n IDAs
n $5,000 of the equity in one vehicle n Education grants and loans for undergraduate students n EITC payments n IDAs n Separate business accounts n Burial accounts up to $1,500 n Prepaid funeral agreement up to $1,500 n Income producing property is exempt if the income from it is greater than the expenses of ownership n Funds set aside by the applicant/recipient for “independence and self-sufficiency,” up to $20,000
Iowa
n IDAs n Life insurance with no cash surrender value n One vehicle regardless of value and $4,115 of equity for each motor vehicle beyond that per adult or working teenager n Funeral agreements up to $1,500 n A reserve of other property, real or personal, up to $2,000 for applicants and $5,000 for recipients n Settlements for payments of medical expenses n Equity up to $10,000 for tools of the trade or capital assets of self-employed households
n One vehicle n Burial and related expense funds for each spouse, up to $1,500 n Life insurance policies up to $1,500 or less for each spouse n Real property up to $6,000 if earning 6% of equity n Resources necessary for self-employment n Retirement funds if only available through termination or hardship
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TANF
State
Medicaid Summary of excluded assets
Kansas
n Property essential to employment or selfemployment n Insurance with no cash surrender value n EITC payments n 529 college savings accounts n Assets for Independence-funded IDAs n Funeral agreements up to $5,000 n Real property that produces income consistent with its fair-market value n Pension plans, with the exception of IRAs, Keoghs and 401(k)s n All motor vehicles n Burial funds of up to $1,500 per household member
Asset test eliminated
Kentucky
n All illiquid assets n All resources of an SSI or State Supplementation recipient n Funds in an IRA, state retirement, deferred compensation, etc., during period of unavailability n Loans n Up to $5,000 in IDAs n All vehicles
n One vehicle if used for employment, to obtain medical treatment or if specifically equipped for a person with a disability n Second vehicle up to $4,500
n n n n Louisiana
n n n
Maine
n n n n n n n n
Maryland
All illiquid assets EITC payments Educational assistance Louisiana Student Tuition Assistance and Revenue Trust Saving Program (529 college savings) IDAs IRAs Retirement and pension plans
Asset test eliminated
One vehicle Prepaid burial contracts Income-producing property Livestock used to produce income Any personal loan with an agreement to repay All educational grants, loans and scholarships Cash surrender value of insurance policies IDAs, Family Development Accounts or Separate Identifiable Accounts up to $10,000
n One primary vehicle n A second vehicle if needed for employment or medical treatment n Property, including real property, used in the production of income n Money in a savings account, CD, pension plan or IRA, up to $8,000 for an individual and $12,000 for a family of two or more n IDAs n Cash value of life insurance n Up to $10,000 in a Family Development Account/IDA n Burial contracts n Educational loans and grants
All assets are excluded except bank accounts, including savings and checking accounts and money on hand
Asset test eliminated
19
State
Massachusetts
Michigan
Minnesota
20
TANF
Medicaid Summary of excluded assets
n The first $10,000 of the fair market value of one vehicle and the first $5,000 of the equity value of one vehicle n A loan verified by a written document n Grants or scholarships to a student n Prepaid funeral arrangements up to $1,500 n Property essential to employment or selfemployment n EITCs n IDAs
Asset test eliminated
n Real estate that the household does not live in n One vehicle, and all others if used for employment or training n Irrevocable prepaid funeral contracts n IDAs n 529 college savings plans
n Tax refunds and credits n Savings, shared, checking or draft accounts used solely for the expenses of a business n Funds in a separate account under a student’s name and accrued solely from a student’s earnings n One vehicle n Burial funds n 529 plans n IDAs n Up to $6,000 of equity in income-producing real property if it produces annual countable income equal to at least 6% of the asset group’s equity n Life insurance up to $1,500
n Business loans for all types of selfemployment n Assets used for self-employment for up to one year n School loans, grants, or scholarships n The first $15,000 in loan value of one vehicle n Money held in escrow for a self-employment business n IDAs
n Court-ordered settlements up to $10,000 n Retirement funds or pension funds that are individually owned or employer-based, including but not limited to IRAs, 401(k) plans, 403(b) plans and Keogh plans n Capital or operating assets of a trade or business up to $200,000 n Money held to pay real estate taxes or insurance by a homeowner n Student financial aid sources n Proceeds from the sale of a homestead for six months after the month of receipt n One vehicle, used for employment or seeking employment, for each household member of legal driving age
resource guide: lifting asset limits in public benefit programs
CFED: 2009-2010 ASSETS & OPPORTUNITY SCORECARD
State
TANF
Medicaid Summary of excluded assets
Mississippi
n All vehicles, except recreational vehicles n Up to $1,500 in a funeral agreement per household member n Retirement plans including pensions, IRAs and Keogh plans n Cash obtained from sale of home for six months if there is a realistic replacement plan n EITC payments that are received in a lump sum n Equipment essential to operation of a small business n Cash surrender value of life insurance n Education Savings Plans identified as tax preferred accounts
Asset test eliminated
Missouri
n One vehicle and up to $1,500 equity value of an additional vehicle n Saleable personal property used to produce income (livestock, merchandise, etc.) n IDAs n $1,500 of equity value of prepaid burials for each family member n Income received on an annual basis (such as sale of livestock in the fall) and put aside in a separate account for yearly maintenance as cash and securities
Asset test eliminated
Montana
n Burial accounts up to $1,500 n Business Asset Development Accounts n Income producing property for selfemployment n IDAs n Term life insurance policies n Cash and face value of ordinary (whole) life insurance policies n Employment-related retirement accounts that can only be accessed upon termination n Property needed for self-employment n Educational income, including Title IV, BIA,VA and work study for post-secondary education n All vehicles
n One vehicle used as a home or for incomeproducing purposes n Burial accounts, up to $1,500 n Irrevocable burial accounts n Business checking accounts n All educational income n Family Self-Sufficiency Program escrow accounts n IDAs n Term life insurance policies n Cash and face value of ordinary (whole) life insurance policies n Property/equipment necessary for employment n Livestock
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State
22
TANF
Medicaid Summary of excluded assets
Nebraska
n One vehicle if used for employment or medical transportation n The cash value of life insurance policies n Irrevocable burial trusts up to $3,000 per individual n Proceeds of an irrevocable burial insurance policy n Unavailable job-related retirement account held by the employer n IDAs
n One vehicle if used for employment, medical transportation or as a home n Cash value of life insurance policies n Irrevocable burial trusts up to $3,000 per individual n Stocks, inventories and supplies used in selfemployment n U.S. savings bonds (excluded for initial sixmonth mandatory retention period) n Unavailable job-related retirement account that is held by the employer n IDAs
Nevada
n One vehicle n Prepaid burial insurance policies, funeral plans, funeral agreements and insurance policies n Property used for self-employment n Income-producing property n IDAs n Tax-preferred education accounts n Retirement accounts, including 401(k)s, 457 plans, Federal Employee Thrift Savings plans, Section 501(e)(18) plans and Section 403(b) plans, but not including IRAs or Keogh plans
n One vehicle per household regardless of value n $1,500 in burial funds n All IDAs n Household personal goods
New Hampshire
n One burial contract for each household member, up to $1,500 n Loans n Life insurance policies for which the total combined equity value of the policy or policies is less than or equal to $1,500 or the state has been made the beneficiary to the policy or policies n One vehicle per adult household member n Farm machinery and farm vehicles, livestock, farm tools, farm equipment and other tools and equipment n IDAs n Contractual Keogh Plans
n Irrevocable burial contracts or trusts n One burial contract for each household member, up to $1,500 n Life insurance policies up to $1,500 n One vehicle per adult household member n Farm machinery and farm vehicles, livestock, farm tools, farm equipment and other tools and equipment n IDAs
New Jersey
n IDAs n One motor vehicle up to $9,500 and a second motor vehicle up to $4,650, if used for employment, training or a person with a disability n Loans n Prepaid burial plots and funeral arrangements n Life insurance policies
Asset test eliminated
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TANF
State
Medicaid Summary of excluded assets
New Mexico
n Buildings used for rental purposes, if located on land contiguous to the land upon which the residence building is constructed n All vehicles n IDAs n Equity value of funeral agreements n Work-related equipment up to $1,000 per individual n Livestock
Asset test eliminated
New York
n One vehicle up to $9,300, if needed for employment n One bona fide funeral agreement up to an equity value of $1,500 per household member n IDAs n EITC payments n Up to $4,650 in a separate bank account established by an individual while currently in receipt of assistance, for the sole purpose of enabling the individual to purchase a first or replacement vehicle to seek, obtain or maintain employment, so long as the funds are not used for any other purpose
n One vehicle n A second vehicle may be exempt if used for medical or employment-related activities n Income-producing real property which is part of the homestead n A child’s savings account under $500 in which the funds are accumulated from gifts from non-legally responsible relatives and/or from the child’s own earnings n Student loans n Irrevocable funeral agreement or burial funds up to $1,500
North Carolina
Varies by county
n n n n n n
Accident insurance with death benefit Burial contracts and insurance Life insurance Retirement accounts, including 401(k)s and IRAs, unless withdrawn Income-producing personal property, business or farm equipment All vehicles
North Dakota
n One vehicle n All assets owned by an SSI recipient n Prepaid burial plans up to $3,000
Asset test eliminated
Ohio
Asset test eliminated
Asset test eliminated
Oklahoma
n Face value of a life insurance policy to fund a prepaid burial contract n Education grants, including work study, scholarships and similar grants n Accounts, stocks, bonds or other resources held under the control of a third party if the funds are designated for educational purposes for a TANF child n IDAs up to $2,000
Asset test eliminated
23
State
24
TANF
Medicaid Summary of excluded assets
Oregon
n One prepaid burial arrangement per household member n All EITC payments n Individual education accounts for participants in JOBS PLUS program n Cash surrender value of a life insurance policy n Up to $10,000 equity value of all motor vehicles n Recreational vehicles with equity value of less than $1,500 n Capital assets for self-employed clients participating in the microenterprise component of the JOBS program
n One prepaid burial arrangement per household member n EITC payments n Individual Education Accounts for participants in JOBS program n 529 college savings accounts or Coverdell accounts n Cash surrender value of life insurance policy n All vehicles up to $10,000 equity value n Resources identified to meet costs, such as purchase of equipment for a trade or business, transportation, books and maintenance costs at school n Capital assets that contribute toward earning self-employment income
Pennsylvania
n SEED (Saving for Education, Entrepreneurship and Downpayment) account funds and interest n UGMA/UTMA accounts owned by a child in which funds may not be accessed until age 21 n Educational assistance in the form of loans, grants and scholarships n Family Savings Accounts (IDAs) n EITCs and any income tax refund n The face or cash surrender value of life insurance policies n One vehicle n Up to $1,500 in a bona fide revocable burial reserve for each household member n Educational Savings Accounts n Farm equipment or farm animals n Equipment needed for employment, rehabilitation or self-care
Asset test eliminated
Rhode Island
n Income-producing property other than real estate n One vehicle for each adult household member, up to two vehicles per household n Vehicles used primarily for income-producing purposes n Funeral agreement up to $1,000 for each household member n Resources of any family member receiving SSI
Asset test eliminated
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State
TANF
Medicaid Summary of excluded assets
South Carolina
n Income-producing property with market rate of return n Property essential to employment/selfemployment n Livestock n Family Self-Sufficiency escrow accounts and interest n Property used for vehicle maintenance (tools, etc.) n One vehicle per licensed driver n Leased vehicle if owner retains title n Vehicles if used to transport a person with a disability for self-employment or incomeproducing purposes as long as number of vehicles does not exceed number of licensed drivers n IDAs up to $10,000 n Up to $1,500 in a prepaid burial contract n Deferred compensation pension funds excluded till withdrawal n Cash value of life insurance n Lump-sum SSI payments
n Real property or equipment being used in a business enterprise n One vehicle for each licensed driver, up to $20,000 n The equity value of any other vehicles may be excluded if used for self-employment n EITC payments n Up to $1,500 in burial funds n Cash value of life insurance policies up to $10,000 n Retirement plans as long as the individual is employed
South Dakota
n One primary vehicle n One additional vehicle valued up to $4,650 if used to obtain or continue employment, attend training preparatory to employment or attend school n A vehicle necessary to transport a member of the household who has a physical disability, or is on SSI and would be a member of the assistance unit if not on SSI n A vehicle used to carry water or fuel for home heating purposes if the household does not have piped-in water or fuel for heat n An income-producing vehicle n The equity value of a prepaid burial contract up to a maximum of $1,500 n Educational loans and grants n The first $1,000 of the cumulative balance of a dependent child’s savings account, checking account, bonds or certificates of deposits, if the excluded funds are owned solely by the dependent child or jointly with the caretaker or another adult relative; the child is at least a half-time student; the child is employed at least part-time or has been employed at least part-time in the preceding 12 months; and a portion of the account was derived from the child’s earnings
n One primary vehicle n One additional vehicle valued up to $4,650 if used to obtain or continue employment, attend training preparatory to employment or attend school n A vehicle necessary to transport a member of the household who has a physical disability, or is on SSI and would be a member of the assistance unit if not on SSI n A vehicle used to carry water or fuel for home heating purposes if the household does not have piped-in water or fuel for heat n An income-producing vehicle n The equity value of a prepaid burial contract up to a maximum of $1,500 n Educational loans and grants
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State
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TANF
Medicaid Summary of excluded assets
Tennessee
n Burial policies n EITC payments n An entrepreneurial account placed with a microlending intermediary program with a balance of $5,000 or less n Equipment used in a self-employment enterprise n IDAs of $5,000 or less in the 12 demonstration counties (however, the entire value of an IDA is counted as a resource in non-demonstration counties) n The value of an IDA-Welfare-to-Work of $5,000 or less in all counties n IRAs, 401(k)s and Keoghs of $20,000 or less n Cash value of life insurance policy n Student grants and loans
IDAs up to $5,000
Texas
n TANF or AFI IDAs, except for deposits not made with earnings n IRAs, 401(k)s, 403(b)s, Simplified Employee Pension and Keoghs n Texas 529 college savings accounts and Coverdell accounts n Cash value of life insurance policies n Up to $7,500 cash value of a prepaid burial insurance policy, funeral plan or funeral agreement for each household member n Personal property that is essential to employment or self-employment, annually produces income consistent with a fair market value comparable in the community or is necessary for the maintenance or use of a vehicle exempted as income-producing or as necessary for transporting a physically disabled household member n $4,650 is exempt for each vehicle owned by a TANF-certified or disqualified household member n All licensed vehicles used for incomeproducing purposes or for transporting a disabled household member
n TANF or AFI IDAs, except for deposits not made with earnings n Retirement accounts, including IRA and 401K n Section 529 and 530 college savings accounts and Coverdells n Cash value of life insurance policies n Up to $7,500 cash value of a prepaid burial insurance policy, funeral plan or funeral agreement for each household member n Property that annually produces income consistent with its fair market value n All licensed vehicles used for incomeproducing purposes n Educational assistance including education loans
resource guide: lifting asset limits in public benefit programs
CFED: 2009-2010 ASSETS & OPPORTUNITY SCORECARD
TANF
State
Utah
Medicaid Summary of excluded assets
n All vehicles n Income-producing property (except real property) necessary for employment n Reasonable assistance received for postsecondary education n Burial/funeral funds up to a maximum of $1,500 per household member
n n n n n n
n
IDAs Proceeds from sale of a home Resources set aside as part of a PASS plan EITCs and Child Tax Credits Assets used for self-employment If rental property or livestock is not an asset of active self-employment, exempt up to $6,000 of the equity of rental property or livestock if the net annual rate of return on the asset is at least 6% of the excluded equity Educational grants, scholarships, fellowships and gifts other than Title IV or BIA
Vermont
n Personal property used to produce income n One burial plot and funeral agreement per individual n Vermont and federal EITC payments n Assets accumulated from subsidized or unsubsidized earnings of adults and children (for current recipients) n Interest on excluded assets n Illiquid assets purchased with savings from earnings or with a combination of savings from earnings and other excluded income or resources, such as SSI/AABD retroactive benefits or federal EITC lump-sum income n If a family reapplies for assistance after Reach Up terminates, assets accumulating during the time the family was not participating in Reach Up are excluded, provided that all other criteria for exclusion are met n Loan and cash value of whole life insurance n IDAs
n All vehicles n Tax-deferred income in a fund available only upon termination of employment, hardship or retirement
Virginia
Asset test eliminated
Asset test eliminated
n n n n
Washington
n One vehicle other than a motor home, up to $5,000 n One vehicle necessary to transport a physically disabled household member n Savings accounts with combined balances of up to $3,000, over and above the current $1,000 resource limit (for current recipients)
n n n n n n n
Bona fide loans, including student loans Advance EITC Payments IDAs Educational benefits that are excluded as income Income and resources of an SSI recipient A bank account jointly owned with an SSI recipient if SSA already counted the money for SSI purposes Self-employment accounts receivable Property that produces income consistent with its fair market value One vehicle up to $5,000 A licensed vehicle needed to transport a physically disabled household member Property needed for self-employment
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TANF
State
West Virginia
Medicaid Summary of excluded assets
n n n n n n n
n
Family Self-Sufficiency Escrow Accounts IDAs (TANF and demonstration) 529s, Coverdells and prepaid tuition plans Cash value of pension funds Leased vehicles One vehicle per household regardless of value Funds held in CDs that cannot be withdrawn prior to maturity under any circumstances (the certificate is not an asset until the first month after it matures) Life insurance policies for one individual up to $1,500 total face value
n n n n n
n
Life insurance policies up to $1,500 One vehicle Family Self-Sufficiency Escrow Accounts IDAs Up to $6,000 of an individual’s equity in personal or real income-producing property is excluded, if it produces a net annual income of at least 6% of the excluded equity Educational grants, scholarships, fellowships and gifts or portions of gifts set aside to pay tuition and other necessary educational expenses, for nine months following the month of receipt
Wisconsin
n Combined equity value of vehicles up to $10,000 n AFI, ORR and TANF-funded IDAs
Asset test eliminated
Wyoming
n One vehicle regardless of value; two vehicles for a married couple n Savings accounts designated for higher education, established from earnings of a dependent child under age 18 who is a fulltime high school student
Asset test eliminated
2009-2010 Assets & Opportunity Scorecard published by CFED. September 2009.
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resource guide: lifting asset limits in public benefit programs