Key Takeaways:
Millions of U.S. families must comply with asset limits set at the state and federal level to participate in essential public benefit programs, from health care to nutrition assistance, in times of need.Research suggests that asset limits can discourage households from accumulating sufficient emergency savings, resulting in increased economic instability and higher demand on public benefit programs.New asset-building programs, such as Trump Accounts, will need to contend with the ways in which asset limits could be at odds with the goals of the program if not properly defined.
Overview
A household’s assets, or its overall wealth, are the resources required to ensure its family members can weather the financial disruption when unexpected expenses emerge. Yet many U.S. households do not have enough assets to adequately cover these challenges. Consider that in 2024, only 63 percent of adults reported they could cover an unexpected and hypothetical $400 emergency expense, according to the Federal Reserve Board. This is all the more alarming as preliminary research suggests that 1 in 4 U.S. families may suffer an income disruption in a given year and that low savings is not just an issue for low-income families.
When households experience moments of financial volatility, public benefit programs—specifically means-tested government transfer programs—can serve as a triage for their economic emergency, supporting economic security and staving off worse outcomes, including eviction or hunger. Yet asset limits imposed by state and federal policymakers to restrict access to these essential programs, from health care to nutrition assistance, prevent millions of U.S. families from accessing the assistance they need. These asset limits often work against the stated goals of the programs that utilize them, undermining economic security rather than enabling economic mobility.
This factsheet provides an overview of asset limits and the types of programs that utilize them, reviews some of the research on the impacts of asset limits, and closes with considerations for policymakers.
What are asset limits?
At first glance, asset limits appear relatively straightforward. They are cumulative financial resource thresholds, and if households fall above these limits, then they are restricted from accessing some of the public benefit programs that are meant to help Americans weather economic hardships. Programs such as Supplemental Security Income and the Supplemental Nutrition Assistance Program, for example, require detailed information about household finances, including total income and assets, for people to participate and receive benefits.
In practice, however, asset limits can be complex to calculate and are specific and distinct for each public benefit program that uses them. Typically, a program considers a household’s total financial resources, but many programs exempt owner-occupied homes, retirement savings, and any income received from other public benefit programs.
Cash benefits received from the Supplemental Security Income program or the Temporary Assistance for Needy Families block grant, for example, do not count toward a family’s SNAP resource limits. But depending on the program and state, a household’s motor vehicle may be included in the asset limit, even though it is an illiquid asset and often necessary for keeping and maintaining employment.
Most programs’ asset limits are very low. The SSI program, which provides monthly payments to people with disabilities and older adults who have little or no income or resources, imposes a federal resource limit of just $2,000. (Married couples are allotted $3,000, while having a child in the household increases the limit by an additional $2,000.) While Texas’ state-administered and federally TANF-funded direct cash assistance program requires extreme material hardship to qualify for benefits, a $1,000 threshold applies with few exceptions.
There also can be income limits paired with asset limits. Income limits vary by program and can be adjusted based on household size. The aforementioned Texas TANF program features similarly low income limits alongside its low asset limits: To remain eligible for benefits, a single mother with two children cannot exceed a monthly maximum income of $188 to be eligible for a maximum benefit of $382 a month.
These stringent financial limits often are in addition to strict and time-consuming administrative requirements to enroll and remain in the program.
Which programs use asset limits?
A range of public benefit programs use asset limits, impacting tens of millions of Americans. Some programs allow states to set or adjust asset limits, such as Temporary Assistance for Needy Families, for which limits can range from $1,000 in Texas to $10,000 in Delaware, and the Low-Income Home Energy Assistance Programs that select states have chosen to implement.
Meanwhile, the Supplemental Nutrition Assistance Program has a federal asset limit that states are allowed to raise or eliminate if they utilize other eligibility requirements of related programs. For Supplemental Security Income and Medicaid, the federal government sets the asset test—though the Affordable Care Act eliminated the Medicaid asset test for adults younger than 65 who live in the 41 states that expanded the program when the law was enacted. SSI asset limits are often the most restrictive of all public benefit programs and were most recently raised in 1989. If the original resource limit of $1,500, introduced in 1972, were adjusted for inflation, it would be more than $10,000 in 2026 dollars, or five times the current level, according to this author’s calculations.
Why do programs use asset limits?
Policymakers use asset limits to narrowly target the population eligible for a program so as to balance need with administrative capacity and resources. Asset limits are intended to ensure that households that have lots of assets, or high levels of wealth, but low or no monthly income on paper are not able to access these programs.
Yet, in practice, asset limits are so low for most programs that they exclude those households with even modest assets. This often means that asset limits for many programs have been set below the amount most households would need to handle many urgent and unexpected expenses, eliminating their ability to absorb such expenses without increased material hardship and prolonging their reliance on public benefit programs.
What does the research say about asset limits?
Much of the research on asset limits describes the complexity of asset limits and how it confuses families, limits access to programs, and prevents families from accumulating savings. Let’s consider each effect in turn.
Confusion about asset limits
Research funded by the U.S. Department of Agriculture suggests that confusion about asset limits can contribute to families limiting their assets to very low levels to ensure eligibility. This comports with qualitative research that suggests TANF asset limits contribute to lower rates of savings among TANF participants due to the belief that the limits are lower than they actually are.
The same USDA-funded research suggests that SNAP asset limits contribute to reduced emergency savings and reduced financial-services sector participation, such as having a bank account.
Reductions in financial stability
When states eliminated asset tests for program participation, the USDA study found that it led to increases in both the number of low-income households with a bank account and the number of program recipients with bank balances higher than $500.
State program administrators also have asserted in interviews that asset limits in practice required individuals who were income-eligible but above the asset threshold to spend down their assets. This results in households that were more economically vulnerable to material hardship and increased the length of their participation in public benefit programs.
Limiting access to public benefit programs
Asset limits can limit access to public benefit programs and contribute to program churn, or when a household enrolled in a public benefit program exits the program and then re-enrolls. Even a modest financial surprise, such as a lawsuit settlement, a tax return, or a few late child support checks, can trigger a program’s asset limits, resulting in churn despite the household’s unchanged underlying economic situation.
Program churn is associated with increased programmatic expenses and high costs for the families that lose access to program benefits. Three cases in point:
When Virginia eliminated the asset limit for its TANF program in 2003, only 40 additional families gained eligibility for the program. The state forecasted that if all of the newly eligible families enrolled in the program, it would still produce a net savings for the state of $195,850 due to reductions in administrative staff time, despite increased enrollment.
When Iowa eliminated the SNAP asset limit test and raised its gross income limit to 160 percent of the federal poverty line (up from 130 percent), it anticipated it would save more than $700,000 on administrative costs.
When Oklahoma eliminated an asset test for Medicaid eligibility in 1997, by 2001, the state estimated it had saved $1 million by slashing administrative spending on the verification of assets, from $3.5 million to $2.5 million.
Considerations for policymakers
Congress recently presented an opportunity to reconsider the appropriate use of asset limits in public benefit programs through the passage of H.R. 1, in which it established asset-building accounts for children with initial funding of $1,000 that can be invested in the stock market. These so-called Trump Accounts, unlike other child savings accounts, are not explicitly excluded from public benefit programs’ asset limits. Households may take advantage of this new asset-building opportunity not knowing that doing so could impact their ability to partake in other public benefit programs.
Without further clarification, this new program will demand attention from policymakers, as families navigate the ins and outs of its interaction with their public benefits. Policymakers also should consider the advantages of incentivizing asset building and encouraging family economic security, as well as the risks of increased program costs and household disruptions when overly stringent material tests lead to program churn or force families to deplete emergency savings.
In the end, policymakers must assess whether asset limits, as currently enacted, do in fact support the stated goals of the programs that utilize them. If a program’s goal is to bolster the long-term self-sufficiency of its participants, then it should not penalize families for accumulating enough savings to cover emergency expenses in 1989 dollars—let alone in 2026, after nearly 40 years of accumulated inflation.
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The post Factsheet: Using asset limits in public benefit programs appeared first on Equitable Growth.
