Bill that encourages savings for TANF recipients is sent to the Governor’s desk

A bill that removes the asset limit for Temporary Assistance for Needy Families (TANF) recipients in Illinois, making it easier for them to build savings, has passed both chambers of the General Assembly and is on its way to the Governor’s desk. 

HB2262, sponsored by Rep. Robyn Gabel and Sen. Mattie Hunter, passed the Illinois House last month and passed the Illinois Senate on May 21 with bi-partisan support. Woodstock Institute and colleague organizations advocated in favor of the bill.

TANF is a cash assistance program for families living at or below 50 percent of the federal poverty level. The federal government provides a block grant for states to administer as they see fit, with or without asset tests. The monthly grant for a family of three is $432 dollars and is intended to cover all non-food expenses.  The existing “asset limit test” is one of the eligibility requirements that TANF recipients must meet, in addition to very low income and strict work requirements.  The asset limit prevents a family of three from having more than $3,000 in savings and requires that families spend down savings above that amount before becoming eligible for the program. Without adequate savings, families are financially vulnerable and unable to cover unexpected or emergency-related expenses.

The asset test also costs the state almost one million dollars each year, according to the Illinois Department of Human Services (IDHS). In 2012, IDHS staff performed 192,000 asset verification tests and found only eight cases where a family’s assets exceeded $3,000. This test is outdated and harmful to low-income families.

Eliminating asset tests is a growing trend across the country. Illinois already removed its asset test for SNAP and Medicaid and will be the eighth state in the country to eliminate the test for TANF eligibility.

Woodstock Institute, in partnership with the Sargent Shriver National Center on Poverty Law, Heartland Alliance, and the Illinois Asset Building Group, are thankful to all the legislators who supported the bill and urge the Governor to act quickly and sign the legislation into law. 

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