Removing Asset Limits in Public Benefits Programs

Many public benefit programs—including cash welfare, food assistance and heating assistance—limit eligibility to those with few or no assets. Asset limits in public benefit programs restrict a family’s economic mobility by creating barriers to saving for those who need savings the most. If a family has assets over a certain threshold, it must “spend down” their long-term savings to receive short-term assistance from public benefit programs. Asset limits discourage families from saving for emergencies, education, homeownership and retirement, and pose serious obstacles for low-income families or individuals trying to become financially self-sufficient. Personal assets and savings are crucial resources that help families move off of assistance from public benefit programs and out of poverty. States have some flexibility to raise or waive asset tests as part of their administration of these programs. Allowing for this flexibility to increase or eliminate asset limits for public benefit programs helps families by removing the barriers asset limits create.

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