It’s Time for Illinois to Eliminate the TANF Asset Test

This year IABG and our partners are leading efforts to eliminate the TANF Asset Test. SB2319 & HB2262 would remove this significant savings barrier facing our poorest families

The Temporary Assistance for Needy Families (TANF) Program provides cash assistance to extremely poor children and their families. It is intended to cover all of a family’s non-food expenses, including rent, utilities, clothing, gas, and other essentials. The monthly TANF grant for a family of 3 is $432, enough to support the family at 1/4 of the Federal Poverty Level.

Impact on Families

The asset limit is part of the eligibility standards for TANF in Illinois. It means that a family of three, seeking TANF assistance or currently receiving assistance, cannot own more than $3,000 in savings.

The asset limit is counterproductive to the aims of the TANF program in that it does not help families become self-sufficient. Families are forced to spend down college savings or emergency savings – further impoverishing themselves. Without emergency savings families are unable to pay for car repairs, emergency healthcare, or unexpected child care expenses. They are left financially vulnerable and even more in need of public assistance. By eliminating the asset limit, we encourage savings and are better able to help families develop good savings behaviors

Impact on the State

In addition to the direct impact on families, the asset limit also has a negative impact on the state. Every time a family applies for TANF, or has their eligibility redetermined, an IDHS caseworker must investigate the family’s assets – this requires an extensive number of checks. However, very few families applying for TANF have significant savings. States that have evaluated this have found that the administrative savings from eliminating the asset limit outweighs the cost of providing assistance.

In Illinois, IDHS has a similar conclusion. They have said that any cost of providing assistance to a handful more families would be offset by administrative savings.

Finally, the strict work requirements and time limits that define the TANF program today deter anyone with alternative means from applying for assistance. The TANF Asset Limit is a relic of the time before welfare reform when there was no work requirement. TANF recipients are now required to participate in work-related activities for 30 hours per week. Given these built in deterrents, asset limits have become outdated, unnecessary, and potentially harmful.

It’s time to Remove the Asset Test in Illinois

Illinois has already eliminated the asset test for Food Stamps and medical assistance. The TANF asset test is the only one left. Illinois should join other states and eliminate the TANF asset limit too. By doing so we will encourage families to save while saving taxpayer dollars and increasing government efficiency.

HB2262 will be up in the Human Services Committee on Thursday, March 21st. We ask for your support in moving this bill forward. Please take a moment to slip in support of HB2262. If you have questions about how to complete the form, please email Lucy Mullany. You can learn more about the bill by downloading our fact sheets.

UPDATE: HB2262 passed out of the House on April 16th. We now move to the Senate!