Limited by Design: How Restrictive Asset Limits Punish Families and Perpetuate the Cycle of Poverty

This article describes the harmful impact of restrictive asset limits on low-income families’ ability to save for the future. Asset limits are part of a host of eligibility criteria for means-tested benefits such as the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Ne...

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Bibliographic Details
Published in:Policy File 2022
Main Authors: Koball, Heather, Cely, Maggie, Hartig, Seth
Format: Report
Language:English
Online Access:Request full text
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Summary:This article describes the harmful impact of restrictive asset limits on low-income families’ ability to save for the future. Asset limits are part of a host of eligibility criteria for means-tested benefits such as the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). On top of strict income requirements, applicants must report savings and other assets to receive SNAP or TANF in the majority of states (28 for SNAP, 43 for TANF). Asset limits vary, but typically fall below $2,500; in five states, TANF requires that recipients have assets no greater than $1,000. It is long past time to evaluate asset limit policies and their impact on families experiencing poverty. Leveraging data from recent state partnerships and the National Center for Children in Poverty’s (NCCP) experience modeling the impact of policy on families using its Family Resource Simulator (FRS), NCCP recommends a number of strategies that can remove benefit cliffs while encouraging or protecting savings for families in poverty.