Illinois Votes to Eliminate the TANF Asset Test

**Update (July 29, 2013): Governor Quinn signed HB2262 into law, eliminating the asset test in the Temporary Assistance for Needy Families (TANF) Program.

Today the Illinois Senate passed legislation that saves our state nearly $1 million annually, while removing a significant barrier that prevents Illinois’ poorest families from saving money.  HB2262, which passed out of the House with bipartisan support last month, will eliminate the “asset test” in the Temporary Assistance for Needy Families (TANF) program.

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

Sponsored by Representative Gabel and Senator Hunter, this legislation encourages savings and will allow families to gain financial independence.  The bill now heads to Governor Quinn’s desk for his signature.

The TANF Asset Test has prevented our poorest families from building the savings they need to weather unexpected expenses and become financially stable. By eliminating the asset test we save the state in much needed administrative costs and allow families to preserve the few resources they have, like emergency or college savings, and avert financial disaster.

In addition to harming families, the TANF Asset Test was also unnecessarily costing the state. The Illinois Department of Human Services (IDHS) estimates it spent $960,000 worth of caseworker time checking TANF families’ assets last year. Of the 192,000 individual TANF eligibility reviews conducted last year, IDHS found only 8 cases where the family’s assets exceeded $3,000.

The TANF Asset Limit is a relic of the time before welfare reform when there was no work requirement. The strict work requirements and time limits that define the TANF program today deter anyone with alternative means from applying for assistance. 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 Given these built in deterrents, asset limits have become outdated, unnecessary, and harmful for families.

Efforts to eliminate the TANF Asset Test were led by IABG and its lead partner organizations, the Sargent Shriver National Center on Poverty Law, the Woodstock Institute, Heartland Alliance, and Community Organizing for Family Issues (COFI).