Pennsylvania's Misguided Assets Test for SNAP

If Congress doesn't succeeed in gutting SNAP benefits through the Farm Bill, which now proposes sweeping cuts to food stamps, it seems various state legislatures will do whatever they can to get that job done.  A few weeks ago, I wrote about North Carolina's proposed background checks for SNAP applicants. Pennsyvania, too, has gotten in on the SNAP attack, reviving a policy that had been retired by the Pennsylvania Department of Public Welfare four years earlier. 

A year ago, Governor Tom Corbett quietly resurrected the assets test, which allows households with people under 60 to $5,500 in cash or certain other assets to be eligible for SNAP. Those who are disabled or 60 and older, have a higher threshold of $9,000. Corbett and the policy's supporters argued that potential applicants should tap into these assets before being able to access taxpayer-funded food assistance.

A representative from the Pennsylvania Department of Public Welfare told Pennlive.com that the law has helped cut down on fraud, because, between July and September of 2013, "39 applications for food stamps were denied because assets exceeded $100,000. Another 71 were denied during that four-month span because paperwork reflected applicant with between $50,001 and $100,000 in assets." While of course benefits should only go to the truly needy, it's hard to believe that a new anti-fraud policy is needed given the small number of problems revealed in applications in a state where 1.8 million people are eligible for SNAP. 

Meanwhile, though, the new requirements are increasing the burden on already strapped food banks and other social service organizations. Approximately 4,000 families have been denied assistance in the last year or have lost their benefits due to what the DPW calls "excess resources." And when they're denied they go straight to organizations like the Central Pennsylvania Food Bank, which five years ago needed to raise $100,000 to supplement donations in order to meet demand. This year, they're budgeting $2 million.

In addition to stretching food banks' resources and patience, the assets tests also adds more work to the overburdened case loads of social workers. SNAP benefits are already means-tested, but the asset tests adds even more oversight and paper work. Even, worse, as Elizabeth Lower-Basch from the Center on Law and Social Policy told the Pittsburgh Post-Gazette,"It encourages people to spend down rather than put money in the bank and save it against future needs." 

The rules covering which assets count towards the test and which don't are complicated. If you own your own home, that's exempt, but a second one is not. One vehicle is exempt from the test, a second vehicle is not. Savings and checking accounts, cash, stocks and bonds count toward the limit, though savings in an IRA account don't. 

Pennsylvania is not the only state with an assets test --13 others have one, while the other 36 do not. According to Lower-Basch however, Pennsylvania's version is among the most stringent.  

Of course, state budgets all over the country are stretched thin, and no one wants to see benefits go to those who don't deserve them. But can't governments find a way to cut spending without decimating benefits for the poor?