Most states in 2009 disqualified families from receiving the Temporary Assistance for Needy Families if they had assets totaling between $2,000 and $3,000. This means that these low-income families must choose between saving income to achieve greater economic security in the long run or staying on TANF, a program that provides needed support in the near term. This dichotomy is not helpful in setting families on a long-term path to self-sufficiency.
Low-income families who do not qualify for TANF also suffer because they are forced to spend down the few assets they have in order to qualify for needed assistance in tough economic times. This sets up a dynamic that makes it more difficult for families facing a temporary setback to get back on their feet.
Eliminating asset limits would allow families to receive the help they need and create incentives for them to save for the future. TANF recipients need economic security, and reforming the way asset tests work—either through complete elimination or exemption of some form of assets—can help them get there.
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