Senator Eldridge Champions Repeal of Asset Limits to Benefit Low-Income Families, People with Disabilities, and Seniors in Overrides of Governor Baker’s Vetoes
Key recommendation of Asset Development Commission becomes law
Boston, MA — With the House of Representatives and State State Senate voting to override Governor Baker’s vetoes of the FY22 budget in late September, a key provision of State Senator Jamie Eldridge’s legislation, S.102, An Act removing barriers to lifting people out of poverty, became law. The Massachusetts Legislature voting for overrides H4011 and H4012 eliminated asset limits for Massachusetts residents who receive Transitional Aid to Families with Dependent Children (“TAFDC”) and Emergency Aid to the Elderly, Disabled and Children (“EAEDC”), empowering low-income families, people with disabilities, and seniors to save money and improve their financial security.
“I’m proud to have led the fight in the Legislature to eliminate asset limits for cash assistance programs, one of the crueler realities that came out of the so-called ‘welfare reform’ policies of the 1980s and 1990s”, said Senator Jamie Eldridge (D-Acton). “As an attorney who began my career in legal services practicing economic development law, arbitrary asset limits is just one example of how Massachusetts state government places multiple barriers to poor people hoping to enjoy a decent quality of life, and the ability to enjoy prosperity. I am deeply grateful to the anti-poverty advocates who have fought so hard to eliminate these counterproductive provisions.”
Under the law as it stood before the Legislature’s elimination of asset limits, asset limits for EAEDC, the program for elders and disabled persons, was $250 for a single person or $500 for a couple. A car’s equity value in excess of $1,500 counted towards those exceedingly low EAEDC limits. The TAFDC asset limit was $5,000.
“We commend Senator Eldridge for his persistence in getting rid of asset limits,” said Deborah Harris, a senior attorney at the Massachusetts Law Reform Institute (MLRI). “And we thank the Senate President and Ways and Means Chair Rodrigues for eliminating asset limits in the Senate budget. With the override vote, our cash assistance programs will no longer demand their pound of flesh as a condition of helping people meet their basic needs.” Ms. Harris was a member of the Asset Development Commission.
"The elimination of the asset limits will make it easier for very low-income families to obtain basic income support when they need it,” said Naomi Meyer, a staff attorney at Greater Boston Legal Services(GBLS). “While most applicants for cash assistance have little to no assets, it can be burdensome for them to verify this fact. I have worked with many clients who, lacking access to a computer or printer, had to travel to the bank with small children in tow to get documentation showing that they had only a few dollars in their account or that the account was closed. The Legislature’s action today relieves destitute families from this paper chase."
It is worth emphasizing that the Legislature needed to override Governor Baker’s veto of this significant change to anti-poverty law. Under Governor Baker’s proposal, households with more than one adult driver would be ineligible for cash assistance if they had more than one car needed for two adults to commute to work. Governor Baker’s actions demonstrate that he is not looking out for the interests of low-income families struggling during the pandemic.”
More than a decade ago, Senator Eldridge co-chaired the Asset Development Commission that issued a report for major legislation to promote asset development for low-income families and individuals. Among the recommendations, the report called for, “reforming asset limits and vehicle value rules in public assistance programs.” The recommendation sought to allow low-income families to own a car and hold modest savings in their bank accounts. Asset limits are caps on the amount of cash, savings, or material property that an applicant or recipient can hold and still be eligible for assistance. As the report explained, asset limits create a so-called “cliff effect, that is, the abrupt and disproportionate loss of means-tested cash assistance.”
The elimination of asset limits is only the latest in a series of Asset Development Commission recommendations to become law over the past 10 years:
Expanded EITC – The Asset Development Commission recommended to “increase the impact of State Earned Income Tax Credit (EITC).” In 2015, the Legislature increased the EITC from 15% to 23% of the federal EITC, and in 2018 to 30% of the federal EITC.
Financial Literacy in Schools – The Asset Development Commission recommended to “integrate financial education into the public K-12 education system to improve financial literacy in the formative years.” In 2018, the Legislature enacted legislation to incorporate financial literacy into public school curriculum.
Funding for Matched-Savings Programs – The Asset Development Commission recommended to “[a]dvance asset building among low income families through continue[d] support for the Individual Development Account programs.” Individual development account programs, now known as matched-savings programs, are dedicated savings accounts containing deposits by low-income account holders that are matched by private or public sources. In the FY22 budget, Senator Eldridge secured a quarter-million dollar earmark for the MIDAS Collaborative, an organization that administers matched-savings programs.
“We are grateful for Senator Eldridge’s steadfast commitment to enacting the Asset Development Commission’s recommendations into law,” said Molly Goodman, executive director of the MIDAS Collaborative. “Asset limits on cash assistance programs do not further the public interest and they amount to an institutional barrier to saving money for the same low-income households that the programs are meant to help.”
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