Advocates argue that policy should encourage low-wealth people to achieve self-sufficiency

Advocates for asset-building believe that expanding access to the fundamental building blocks of financial stability—like savings accounts, investments, a home, or higher education—can help individuals make better financial decisions and weather unforeseen crises. The research backs that up: assets encourage individuals regardless of income to save more, expand their aspirations, and encourage their loved ones to do the same.

Perversely, some public benefits programs actually discourage low-wealth people from saving money that could help them through an emergency or have a comfortable retirement.

Some public benefits programs are structured so that individuals with assets higher than a certain threshold are not eligible for benefits and must spend down their assets in order to qualify. While many public benefits programs today are structured to quickly move families to self-sufficiency, asset limits work against that very goal—a cushion of savings is crucial to achieving self-sufficiency. For example, the Temporary Assistance for Needy Families (TANF) program, which provides temporary cash assistance to low-wealth people, has an asset limit of only $2,000 in Illinois.

President Obama’s 2011 budget would raise asset limits to no less than $10,000 for programs serving low-income adults and children; however, this does not include Medicaid and the Supplemental Security Income program, which provides subsistence cash to very low-income individuals, seniors, and people with disability. While raising the asset limits are a step in the right direction, we believe that asset limits for all programs should be eliminated so that the neediest individuals have the opportunity to become self-sufficient.  In Illinois, asset limits can be changed if the Illinois Department of Human Services (IDHS) proposes a rule change. The General Assembly’s Joint Committee on Administrative Rules (JCAR) would then vote to approve the rule. It’s vital that advocates comment on IDHS proposed rules and encourage JCAR members to support the removal of asset limits. To learn about opportunities to advocate, please sign up for our mailing list using the form on the sidebar and we will alert you.

Tomorrow, Woodstock President Dory Rand will present at the Illinois Asset Building Group conference on why it’s crucial to eliminate asset limits so that low-wealth people can access badly-needed benefits and be able to build a cushion of savings. Also presenting are Senior Vice President Geoff Smith, who will be discussing credit scores and their impact on economic opportunity in communities of color, and Vice President Tom Feltner, who will present on the federal financial reform bill’s impact on asset-building. Please click here to learn more about the conference.

Additionally, if you have stories of people otherwise eligible for TANF who were disqualified because of asset limits, please let Dory Rand know at 312-368-0310 or