March Legislative Update: Addressing Wealth Inequality

Legislative advocacy is a critical part of the work of IABG. The spring legislative session currently underway in Springfield has provided significant opportunity to raise awareness of asset building issues and push for increased access to savings opportunities for Illinois families.

This session, our Coalition is focusing heavily on two pieces of legislation that would remove barriers to savings and give families the tools to build financially secure futures. These bills also address the staggering racial wealth gap that continues to expand as a result of policies and practices that create opportunity for some while leaving others behind.

Here’s our March Legislative Update:

Creating an Automatic IRA Program:

2.5 million private-sector workers in Illinois have no access to a retirement savings account. Without access to this important savings tool more and more people are relying too heavily on limited Social Security benefits and, as a result, falling into poverty in their retirement years. Social Security was never intended to be the sole source, or even the main source, of someone’s retirement income. However, for nearly two-thirds of retirees, Social Security provides the majority of their cash income. For more than one-third, it provides more than 90% of their income. For one-quarter of elderly beneficiaries, Social Security is the sole source of retirement income.

The Automatic IRA Program is a simple, cost-effective, way to increase retirement security for Illinois workers. The legislation (SB2400 / HB2461) would create a statewide infrastructure that gives workers access to a savings tool that will help them build financially secure retirements.

Eliminating the Asset Test on TANF:

The second piece is a bill that removes the asset limit on the Temporary Assistance for Needy Families (TANF) program (SB2319 / HB2262). As the law currently stands, families are deemed ineligible for public assistance if they own more than $3,000 in assets. This problematic policy punishes families for accumulating savings and incentivizes them to spend down retirement or college savings in order to remain eligible for aid. Eliminating the asset test would allow families to continue to build their savings while remaining eligible for much needed assistance. In addition to encouraging savings among families, eliminating the asset limit also benefits the state. Other states that have removed the asset limit on TANF have found an administrative cost savings while seeing an insignificant increase in the number of people receiving benefits. To learn more about this initiative check out our fact sheets.

Take Action:

In the next couple of weeks both issues will be up for a vote in their respective committees. We need your help in moving these policies forward. If your organization, business, or financial institution is interested in signing on in support, please contact Lucy Mullany.