GardenShare

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Friday, July 29, 2016

SNAP ASSET LIMITS HAVE UNINTENDED CONSEQUENCES

SNAP asset limits aim to target government resources and program benefits to people with the greatest need. But they may discourage low­income households from building a savings cushion that would help them weather economic shocks, such as a job loss or an unexpected car repair or medical bill. A new study finds that relaxing SNAP asset limits increases low­-income households’ savings (8% more likely to have at least $500) and participation in mainstream financial markets (5% more likely to have a bank account). It also reduces SNAP churn (households cycling on and off SNAP due to fluctuations in their income) by 26%. Taken together, relaxed asset limits increase households’ financial security and stability by increasing savings and reducing benefit fluctuations, and they can decrease government administrative program costs when fewer people cycle on and off the program.

Source: Urban Institute, 7/26/16, SNAP Asset Limits