Wednesday, January 11, 2012

Pennsylvania may impose asset test for food stamps

Low income Pennsylvania seniors with over $3,250 in countable assets may no longer be able to qualify for food stamps beginning on May 1. 

According to the Philadelphia Inquirer, the Department of Public Welfare (DPW) has decided that people under 60 with more than $2,000 in savings and other assets should no longer be eligible for food stamps. For people over 60, the limit will be $3,250. Houses and retirement benefits and a car will not be counted as assets. 

Under current rules there is no asset test.  Eligibility for food stamps (known as the Supplemental Nutrition Assistance Program, or SNAP) has been based solely on the applicant’s income and expenses. In Pennsylvania, people can access SNAP if they make 160 percent of the federal poverty level or less. For a family of four, the poverty level is $22,350. A household with an elderly or disabled member has a higher limit of 200% of the poverty level.

The state's plan was quietly announced in a Dec. 28 letter from DPW to the U.S. Department of Agriculture. The letter was obtained by The Inquirer.  The food stamp program is administered by the state, but is funded by the federal government. Pennsylvania receives about $2.5 billion in federal SNAP funds annually and pays about $160 million annually in state money to maintain the program. 

Given the federal funding, any state savings resulting from the policy change will likely be minimal and the additional work needed to check on assets could actually raise state costs and workloads for the Department.   

Federal law does permit states to impose an asset test for food stamps.  However, the national trend, supported by both Democrat and Republican state administrations, has been to do away with asset limitations.  A majority of states have gotten rid of asset tests completely, while others have raised the amount of allowable assets.  

Welfare Department spokesperson Ann Bale is quoted by the Inquirer as saying that the asset test was a way to ensure that "people with resources are not taking advantage of the food-stamp program," funded by federal money. In addition, Bale said, the test was related to DPW Secretary Gary Alexander's initiative to reduce waste, fraud, and abuse across all department programs.

Critics of the change in DPW policy say that instituting an asset test for SNAP benefits will have the effect of saving the federal government money by limiting SNAP payments, while at the same time costing Pennsylvania more money. They suggest that it will particularly punish elderly people saving for their burials, poor people trying to save enough money to get out of poverty, and working- and middle-class people who lost their jobs in the recession and may now have to liquidate assets to feed their families.

Fewer people on SNAP means more folks heading to food pantries, which is bad news, according to Bill Clark, executive director of Philabundance, the largest hunger-relief agency in the region.

"I'm very pessimistic about our ability to meet people's needs," Clark said. "This will be a mind-boggling, self-inflicted wound. It makes no compassionate, political, or economic sense."

For many elderly especially, $3,250 in the bank serves as "the poor man's medical insurance," Clark said.

That sounds about right, said Doris Gray, 72, a divorced, college-educated former graphic artist from Mount Airy with a heart condition who gets $200 a month in food stamps.

Rent, insurance, and medical costs are more than her $1,079 monthly Social Security check. She relies on $14,000 in savings to survive, but Gray estimates it will be depleted in two years.

But before that -- as of May 1, if the DPW plan holds -- her food stamps will be gone. "It means I'll have to give up paying for my health insurance," she said. "I can't afford food and insurance.

"I feel panic, dismay, and bewilderment. The state doesn't understand that there are so many of us people living on the edge."

The Welfare Department’s decision to impose an asset test on food stamp recipients is perhaps a good example of the kinds of poor decisions that can result when policy changes are made in secret. Getting input from the people who will be affected by a policy change can take time, but usually results in more informed and better policy decisions. 

The Legislature has granted the Department of Public Welfare a one-year exemption from the requirements for public notice and input on rulemaking decisions. Hopefully that exemption, as set forth in Act 22 of 2010, will not be extended.   

Perhaps the Department of Public Welfare will reconsider its decision before implementing the new asset test on May 1st.

For more information:

Pennsylvania to impose asset test for food stamps (Philadelphia Inquirer article)

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