Does Alabama’s proposed food stamp bill prevent recipients from owning a car?

Alabama Senator Arthur Orr

Rumors about a new bill related to food stamp restrictions in Alabama spread fast.

The bill, the online rumor mill said , would prevent those receiving assistance through the Supplemental Nutrition Assistance Program from owning a vehicle. But while the recently introduced Senate Bill 285 would change some of the requirements for those receiving SNAP – commonly known as food stamps – confusion over what it would and wouldn’t do continues.

The bill

Sen. Arthur Orr, R-Decatur, introduced a bill March 3 to place additional requirements on those receiving SNAP and Temporary Aid to Needy Families, or TANF, assistance given to very poor families with children. There are multiple provisions in the measure: cut eligibility for TANF from five to three years; require TANF recipients to acknowledge in writing they will abide by program requirements, including those involving work; prevent the Alabama Department of Human Resources from seeking work waivers for those receiving food stamps; end SNAP eligibility for anyone not meeting child support obligations; and require EBT cards used for public benefits to have the recipient’s photo on them.

The measure would also institute existing federal asset guidelines – limits on how much you can own and earn – in Alabama , one of four states that currently place no cap on what someone can own while receiving benefits. That provision led to reports the bill would prevent a food stamp or TANF recipient from owning a car, a rumor that spread so quickly it was even picked up by myth-busting website Snopes.

Orr said he has received numerous complaints from those who thought the bill would limit car ownership but reiterated that isn’t the case. Logan Pike, State Government Relations Manager for the Heartland Institute, an Illinois think-tank that helped develop the bill, agreed.

“Asset tests are one tool states can use to ensure all food stamp dollars are used only by those families truly in need. Currently, 14 states require an asset test to receive food stamps,” Pike said. “The assets examined in Sen. Orr’s bill would not include home equity or a primary vehicle, but would include bank account balances and recreational vehicles, such as snowmobiles, boats, motorcycles, jet skis, ATVs, as well as other valuable assets.”

The USDA, which manages the SNAP program, publishes the guidelines . They include asset limitations – including the value of vehicles – but provides for a wide array of exceptions, including if the vehicle is used to travel to work or transport a physically disabled family member. If the vehicle doesn’t meet those exceptions, then anything with fair market or equity value over $4,650 is counted towards assets.

The USDA allows a household to have $2,250 in countable resources, such as a bank account, or $3,250 in countable resources if a person is 60 years or older or is disabled.

Pike said limits on total assets for those receiving assistance are often used by states to try and ensure those receiving benefits are those who most need them.

“Asset tests are an important tool that’s used to ensure individuals spend their own resources before turning to taxpayers for support and to prevent abuse by those who do not truly need the help,” Pike said. “Establishing an asset test with a reasonable threshold allows room for savings while making sure those who truly need SNAP benefits receive them.

“Welfare reform should focus on encouraging able-bodied recipients who are enrolled in these programs to become more self-sufficient and less dependent on government aid,” she added.

The proposal is just the latest in a series of efforts to control the number of people receiving benefits such as SNAP. In general, states are allowed to have more permissive eligibility policies but can’t adopt ones that are stricter than the federal guidelines. Beginning Jan. 1, unemployed Alabama residents age 18-49 who aren’t disabled or raising minor children are required to work at least part time in order to maintain their SNAP benefits. SNAP recipients were given a three-month waiver on the program, meaning some will see their benefits end April 1 unless they are working.

‘A solution in search of a problem’

Opponents of the Orr’s bill said it would add huge amounts of red tape to an assistance system that can already be difficult to navigate.

The bill would “deny food assistance and cash welfare to thousands of low-income Alabamians – many of them seniors or people with disabilities – who are doing nothing wrong,” said Carol Gunlach, a policy analyst with Alabama Arise. It would also “cost Alabama tens of millions of dollars to implement during a difficult budget year and it would not save the state money.

“The bill is, quite simply, a solution in search of a problem.”

About 30,000 individuals in Alabama receive TANF; 881,402 receive SNAP. According to Alabama Arise, 47 percent of SNAP recipients in the state are children and 15 percent are senior citizens. Twenty six percent of recipients are disabled.

Gunlach said Alabama’s error rate in the SNAP program was 2 percent in 2014. The error rate that resulted in increased benefits to the recipients was 1.26 percent.

“Fighting public assistance fraud is important but cutting off assistance to thousands of low-income people who are doing nothing wrong is not the way to do it,” she said.

What’s next?

Orr’s bill was passed by the Senate Fiscal Responsibility and Economic Development Committee earlier this month on a 10-3 vote. It will now go to the full Senate for its approval but a vote on the bill has not been scheduled.

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