Tuesday, January 10, 2012
By Alfred Lubrano, Philadelphia Inquirer
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 age 60 with more than $2,000 in savings and other assets will no longer be eligible for food stamps. For people over 60, the limit is $3,250.
People's houses and retirement benefits would be exempt from being counted as assets. If they own a car, that vehicle also would be exempt, but any additional vehicle worth more than $4,650 will be considered a countable asset.
Anne Bale, a spokeswoman for DPW, said the asset test is a way to ensure that "people with resources are not taking advantage of the food-stamp program," which is funded by federal money.
In addition, Ms. Bale said that the test is related to DPW Secretary Gary Alexander's initiative to reduce waste, fraud, and abuse across all department programs.
Ms. Bale said DPW estimates that 2 percent of the 1.8 million Pennsylvanians receiving food stamps would be affected by the asset test.
The DPW edict, which has caught many by surprise, has been widely condemned by Philadelphia city officials, as well as by business leaders statewide and advocates for the poor. They point to federal statistics that show that Pennsylvania has one of the lowest food-stamp fraud rates in America: one-tenth of 1 percent.
In fact, the state recently has 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 particularly punishes 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. "This is hypocrisy at its highest."
Adam MacGregor of nonprofit Just Harvest in Pittsburgh, echoed that message.
"The issue here is that they're telling people, 'You ought to be saving for the future, but don't expect to be holding on to those savings if you want to get help,' " he said, adding that people "are being penalized for trying to better themselves."
Just Harvest helped about 1,300 people apply for food stamps last year, about 60 percent of whom received them. The group also screened 400 people who chose not to apply for them, because they likely wouldn't qualify, Mr. MacGregor said.
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.
Anti-poverty advocates say the Pennsylvania decision was unusual because there is a trend across America favored both by 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, the nation's leading anti-hunger group.
Currently 35 states, including New Jersey, have gotten rid of asset tests, many of them during the recession. 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 changed, USDA figures show.
Pennsylvania last had an asset test in 2008, which 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.
Jeff Brown, CEO 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 depends on food stamps. Jobs in trucking, grocery stores, warehouses and other areas will be hurt by the SNAP asset test, Mr. Brown added.
David McCorkle, president of the Pennsylvania Food Merchants Association, said now is not the time for an assets 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. "Food stamps are good business and sustain employment."
Many say that instituting an asset test for SNAP benefits will cost Pennsylvania more money. Food-stamp caseworkers must be trained to ascertain proof of assets from food-stamp recipients, and computers will have to be re-programmed, said Jean Daniel, a USDA spokeswoman. That can be quite costly, she and others said.
Ms. Bale of DPW disagreed.
Some say 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.
Sharon Ward, executive director of the Pennsylvania Budget and Policy Center, 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."
Ms. Bale didn't address the lottery issue specifically, but did say DPW "constantly" hears from taxpayers saying that people are abusing food stamps.
Doris Gray, 72, a divorced, college-educated former graphic artist from Mount Airy in suburban Philadelphia with a heart condition 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 Ms. Gray estimates it will be depleted in two years. But as of May, 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.
"The state doesn't understand that there are so many of us people living on the edge."
Post-Gazette staff writer Liz Navratil contributed.
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