Report: Connecticut’s ‘asset limits’ hurt the poor

Washington — When it comes to helping the poor climb out of poverty Connecticut doesn’t do a very good job, a new report says.

The survey of all 50 states and the District of Columbia by the New America Foundation determined that a family of three needs at least $4,773 in assets to survive for three months at a poverty level.

But the foundation determined that many states, including Connecticut, trap many families in poverty by putting a ceiling on the worth of their assets, including money in the bank, a car, etc. This restriction on assets gives the poor no incentive to save.

Connecticut is among a majority of states that has no asset limitation to apply for food stamps. A major qualification for food stamps is a low enough income.

But this could change — Republicans in Congress are looking to force states to adopt asset limits.

During debate on a new farm bill in the U.S. House of Representatives, there was a failed attempt to set a national assets limit for food stamps at $2,000.

Connecticut does place a limit of $3,000 in savings or other money to qualify for welfare, known as Temporary Assistance for Needy Families.  Connecticut’s TANF program also puts a cap of $9,500 on the value of automobiles a family may own.

“A safety net should be a springboard to self-sufficiency and financial security,” said New America Foundation policy analyst Aleta Sprague.

Instead, the state’s welfare policy discourages poor people from saving and “keeps families really vulnerable,” Sprague said.

David Dearborn, spokesman for the Connecticut Department of Social Services, said, “whether the asset limit should be lower or higher can be debated but, in general, Connecticut’s level is comparable to that of many other states.”

He also said about that there are about 17,000 households eligible for TANF in Connecticut. One major social program in Connecticut that serves millions of people, Medicaid, does not require asset testing for most of its recipients, he noted further.

Connecticut’s low-income assistance program, known as LIHEAP, has a much more generous asset limit than the state’s welfare program: $10,000 for homeowners and $7,000 for everyone else.

But Connecticut is among 12 states that have any type of asset limit. Most others, including neighboring Massachusetts and Rhode Island, have no limits.

New York, however, does have an asset limit for LIHEAP, $2,000 for households unless a member of that household is 60 years old or older.

Lucy Nolan, executive director of End Hunger Connecticut! praised the report.

“People are cutting (social) programs because they say people should be self-reliant, but they can’t get there if they don’t have any of the tools to help them and part of that is savings,” Nolan said.

 

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