Eliminating SNAP’s Asset Test Helps Families Earn and Save
The Texas Legislature recently heard testimony on HB 1533, to modify state rules for non-exempt resources and assets that determine household eligibilty for SNAP. This blog post lays out how removing the current asset test helps Texas families acheive financial stabilty.
The Supplemental Nutrition Assistance Program (SNAP), formerly known as the food stamp program, is the largest program for preventing hunger in our state and helps households afford food when they go through a period of financial hardship. In 2016, 3.8 million Texans received SNAP, 81 percent of whom were in families with children.
Several components determine eligibility for SNAP, including income, resources or “assets”, and employment. In 2001, Texas instituted the current asset limit, which is not tied to inflation, to determine eligibility for SNAP. Beyond having a gross income below 165 percent of the federal poverty limit (FPL), a net income below 100 percent FPL after taxes and standard deductions, and meeting immigration and work requirements, Texas households’ assets must meet certain limits in order to qualify for SNAP:
- Total (non-exempt) household assets cannot exceed $5,000, including liquid assets and non-exempt vehicle value. Liquid assets include cash on hand, money in checking or savings accounts, savings certificates, and stocks or bonds.
- The fair market value of one vehicle up to $15,000 is excluded, but any value above that level is counted towards the $5,000 total asset limit.
- $4,650 of the fair market value of a second vehicle is excluded, but any value above that level is counted towards the $5,000 asset limit.
In effect, the asset limit negatively impacts two main groups:
- It stops families on SNAP from saving, trapping them in poverty and on government assistance. For families to gain financial security and self-sufficiency, they must have reliable transportation to work and they must accumulate savings as a cushion against emergencies. Yet in order to get the help they need temporarily to feed their families when incomes are tight, current policy forces individuals to spend down their savings or sell their car or truck to qualify for SNAP. Texas’ outdated asset test keeps families, especially two parent households, from working and saving their way to financial security.
- It keeps kinship households from accessing the financial help SNAP could provide when they open their homes to grandchildren, nieces and nephews and other young relatives who would otherwise fall into state custody. Seventy percent of 250,000 children in Texas living in a kinship family are with their grandparents. These grandparents often live on fixed incomes and meet the income guidelines for SNAP, but have existing savings and vehicles that disqualify them under the current asset test. Asset tests are more likely to prevent households with an elderly member from qualifying for SNAP, as older individuals tend to have a decline in income following retirement but have an accumulation of assets built up throughout their working lives.
Federal law gives states flexibility in setting income and asset eligibility criteria for SNAP to better meet the circumstances faced by low-income workers: 34 states have used that flexibility to completely remove the SNAP asset test as it punishes families for accumulating modest savings and makes maintaining access to employment more difficult. The Texas legislature is considering a bill to remove the asset test from SNAP— HB 1533 filed by Representative Farrar would direct HHSC to disregard the value of any liquid assets and vehicles of an individual or family applying for SNAP. If Texas removes its outdated asset limits, it will join the majority of states that recognize such policies hurt families by penalizing saving.
HB 1533 would:
- Make it easier for kinship families to qualify for SNAP assistance;
- Encourage, rather than discourage, savings and asset building among low-income families;
- Allow unemployed workers to access SNAP’s Employment & Training services; and
- Make the enrollment and eligibility process easier for potential applicants to understand.