COMMITTEE ON FAMILY AND CHILDREN SERVICES
TESTIMONY IN SUPPORT OF SB 154
KATHLEEN LARA, POLICY DIRECTOR
JANUARY 23, 2017

Chairman Grooms and members of the committee,

Thank you for the opportunity to speak this morning.   My name is Kathleen Lara and I am the Policy Director for Prosperity Indiana, a network of 230 non-profit organizations, units of local government, private companies and institutions dedicated to building vibrant communities and resilient families. I am also here today on behalf of the partners of the Indiana Assets & Opportunity Network.

Working to advance policies that respond to urgent human needs, help expand economic opportunity and improve the quality of life in communities of all sizes throughout the state is essential to our members and partners.  That is why I come before the committee today urging strong support for SB 154, a bill that will help financially vulnerable, food-insecure Hoosiers reach and maintain economic sufficiency.

Our members and partners work diligently to help those with few assets and few economic opportunities access financial literacy education, open savings accounts, find workforce development training, attain higher education, and achieve housing stability.  Our networks have helped launch community loan centers to cut down on payday loan reliance.  They have helped to train non-profit organizations on best practices in helping low-income clients manage money successfully.  They help operate Individual Development Account programs that allow low-wealth consumers to receive financial education and open matched-savings accounts to afford higher education, open a business or buy a home.

So, our member networks know that consumers are eager to access these opportunities and work hard to advance their financial goals.  Unfortunately, we find that too often, low-income consumers are in a system where they are set up to fail or held back from their full potential. Too often we hear that low-income Hoosiers should receive a hand up, but not a hand out and yet the very nature of the certain program rules contradicts that philosophy.  The SNAP asset limit test is among those rules.

Despite member efforts underway to help break through generational poverty and thus, decrease reliance on public assistance, rules such as the asset limit test can have the unintended consequence of training beneficiaries to stay dependent – to keep their assets low or risk losing essential food assistance during tenuous times.

Program beneficiaries are not eligible if they make more than 130% of the federal poverty level, roughly $31,600 annually for a family of four and the program constrains assets to below $2,250.  That may sound like a generous asset limit, but when you consider that our network partners teach clients that they need three months’ worth of income savings survive a financial emergency, the three months’ worth of savings even at this low-income level exceeds program allowances. 

Logically, if we want Hoosiers to be economically sufficient, we cannot penalize them for saving funds and forcing them to spend down savings, retirement accounts, or selling off assets to become SNAP eligible.  That is important when you consider that SNAP benefits were designed to temporarily help individuals and families maintain food access as they weather financial turmoil, especially since benefit is not even their primary source of income for food.  It is, as the title indicates, supplemental. The program already deducts the amount they expect a household to pay towards food - 30% of net income. 

The revisions in SB 154 make economic sense in supporting the financial independence of low-income Hoosiers.  The Urban Institute reported just last June that more flexible SNAP policies increase the likelihood that lower income adults live in a household where at least one member has a bank account and there is at least $500 in the account.  Entering the financial mainstream by opening bank accounts is in line with what our network case managers repeatedly recommend to clients.

Removing the asset limit test not only makes economic sense for consumers, it makes economic sense for the state.  We know from other states that eliminating the asset test reduces administrative costs. For example, Pennsylvania’s Department of Health Services announced that the 2015 elimination of its asset limit test for SNAP was estimated to save the state $3.5 million annually.

Prosperity Indiana members believe in asset-building strategies that help lift Hoosiers out of poverty permanently. We believe compassionate, common sense policy updates like those contained in SB 154 are essential to building strong families and communities.  We urge your support for the measure and thank you for your time today.