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FAQs: How will an asset test hurt Pennsylvians?
Q: What is an asset test?
A: Effective May 1, 2013, Pennsylvania's asset test requires families to have less than $5,500 in assets ($9,000 for households with seniors or people with disabilities) to qualify for food stamps, which is now called SNAP. If a person owns a car, that vehicle would be exempt, but any additional vehicle worth more than $4,650 would count as an asset. Recognizing the devastating effects of an asset test, 35 states and the District of Columbia do not impose an asset test for SNAP. In fact, Pennsylvania eliminated its own asset test in 2008, as the recession took hold and a growing number of families found themselves seeking food assistance for the first time in their lives.
Q: Would an asset test save Pennsylvania money?
A: No. An asset test will cost Pennsylvania taxpayers more money. SNAP benefits are fully funded by the federal government, so no state tax dollars will be saved. The costs for administering food stamps are split between the federal government and the state. By adding an asset test, the state’s administrative costs actually increase to pay for additional training and staff time. The Corbett administration has failed to release the administrative costs of this added burden on already understaffed County Assistance Offices.
Q: How would an asset test affect the people of Pennsylvania?
A: The state Department of Public Welfare estimates that 4,000 household that receive SNAP benefits would be cut from the program. An asset test would disproportionately hurt seniors and people who’ve recently lost their jobs—two groups that are more likely than others to be living off their savings. What's more, an asset test increases the bureaucratic red tape in applying for food assistance, making it harder for all Pennsylvanians to get the help they need.
Q: Why are assets important?
A: Saving money is critical in helping people transition from poverty to self-sufficiency. Forcing a family to drain their savings before receiving help is counterproductive, making it harder for people to move off of government assistance.
Q: How would an asset test affect local businesses and the economy?
A: Pennsylvania could lose tens of millions of dollars each year in federally funded SNAP benefits, which would otherwise be pumped into the state’s economy as food stamps are spent at grocery stores, farmers’ markets and convenience stores. Because every $1 in SNAP benefits generates $1.73 in economic activity, Pennsylvania stands to lose millions more thanks to the asset test.
Q: Would an asset test reduce waste, fraud and abuse in the Department of Public Welfare?
No. Pennsylvania has an extremely low SNAP fraud rate of less than 1 percent. The asset test places further strain on already understaffed County Assistance Offices, increasing opportunities for errors in processing applications.