Pennsylvania to impose asset test for food stamps
Pennsylvania plans to make the amount of food stamps that people receive contingent on the assets they possess - an unexpected move that bucks national trends and places the commonwealth among a minority of states.
Specifically, the Department of Public Welfare said that as of May 1, people under 60 with more than $2,000 in savings and other assets would no longer be eligible for food stamps. For people over 60, the limit would be $3,250.
Houses and retirement benefits would be exempt from being counted as assets. If a person owns a car, that vehicle also would also be exempt, but any additional vehicle worth more than $4,650 would be considered a countable asset.
Anne Bale, a spokeswoman for DPW, said 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.
Bale said DPW estimated that 2 percent of the 1.8 million Pennsylvanians receiving food stamps would be affected by the asset test.
The DPW plan caught many by surprise, but has been widely condemned by Philadelphia city officials, business leaders statewide, and advocates for the poor.
They point to federal statistics showing that Pennsylvania has one of the lowest food-stamp fraud rates in the nation: one-tenth of 1 percent.
In fact, the state recently won a federal award for running its program efficiently, federal officials say.
Moreover, about 30 percent of people who are eligible for food stamps in Pennsylvania and throughout the nation don't access them, making the entitlement program under-subscribed.
Critics of the DPW plan say it would 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.
"If conservatives want people to be less dependent on government, and reward work and entrepreneurship, then you have to allow low-income people to have a little bit of money in the bank," said Joel Berg, a national hunger expert.
The state's plan was announced to the U.S. Department of Agriculture in a Dec. 28 letter obtained by The Inquirer.
The USDA is in charge of the food-stamp program, now known as the Supplemental Nutrition Assistance Program, or SNAP. Pennsylvania receives about $2.5 billion in federal SNAP funds annually and pays about $160 million annually in state money to maintain the program.
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.
Individual states administer SNAP programs and are permitted to apply asset tests as long as the minimum amount of assets is set no lower than $2,000.
Antipoverty advocates say the Pennsylvania decision is unusual because there is a trend across America, favored by both Republicans and Democrats, to eliminate asset tests.
States "want families to develop assets and don't want the assets to count against the benefits people need," said Ellen Vollinger, legal director for the Food Research and Action Center in Washington, a leading antihunger group.
Currently 35 states, including New Jersey, have gotten rid of asset tests, many of them during the recession, when so many working- and middle-class people have been falling into poverty, antipoverty experts say.
Four states have raised their minimum allowable assets to $5,000 or more.
Pennsylvania would become one of only 11 states with the low-threshold $2,000 asset test - along with Alaska, Arkansas, Indiana, Kansas, Missouri, South Dakota, Tennessee, Utah, Virginia, and Wyoming, USDA figures show. The $2,000 figure was set in 1980 and has never been changed, USDA figures show.
Pennsylvania last had an asset test in 2008. It was ended by the Rendell administration because it was hurting senior citizens and others with savings, according to Rachel Cahill, policy analyst with the Center for Hunger-Free Communities at Drexel University's School of Public Health.
Having an asset test once again "will be really devastating," said Mary Horstmann, deputy policy director for Mayor Nutter. "It'll heavily impact seniors and the newly unemployed. DPW is concerned about waste, fraud, and abuse, but food stamps are not where fraud is happening."
Horstmann said that the change also would negatively affect the food industry.
Others agreed. Jeff Brown, chief executive of Brown's Super Stores, which includes 10 ShopRites in and around Philadelphia, called the DPW decision "mean-spirited" and "bad business strategy."
He said 40 percent of his business depended on food stamps. Jobs in trucking, grocery stores, warehouses, and other areas will be hurt by the SNAP asset test, Brown added.
David McCorkle, president of the Pennsylvania Food Merchants Association, said now was not the time for an asset test.
"These tough economic times do not support any regulatory imposition that will reduce the number of food-stamp recipients in the state," he said. Every dollar of food stamps generates $1.70 in economic activity locally, Horstmann said.
Many 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.
Food-stamp caseworkers must be trained to ascertain proof of assets from food-stamp recipients, and computers will have to be reprogrammed, said Jean Daniel, a USDA spokeswoman. That can be quite costly, she and others said.
Bale of DPW disagreed, saying it wouldn't cost the state all that much.
Still, a recent survey of 26 states by the U.S. General Accounting Office showed that the vast majority of states polled believed asset testing would increase costs and caseworker workload.
"To add document verification at a time when county offices are already overburdened will wind up costing people their food stamps because their claims may not be processed in time," said Carey Morgan, executive director of the Greater Philadelphia Coalition Against Hunger.
Some say that the sudden call for an asset test coincides with the widely publicized story late last year of a Michigan man who won millions in a lottery but retained his food stamps.
"This is all predicated on the one lottery winner," said Sharon Ward, executive director of the liberal Pennsylvania Budget and Policy Center.
Ward said the better solution would have been to write a law denying food stamps to lottery winners, not to institute a policy to review hundreds of thousands of food-stamp applications "to find the one person who won the lottery."
Bale did not address the lottery issue specifically, but did say that DPW "constantly" hears from taxpayers saying that people are abusing food stamps.
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."
Contact staff writer Alfred Lubrano at 215-854-4969 or email@example.com.