Buncombe County Benefits Cliff

Asset Limits

What are asset limits?

So far we’ve focused on how income thresholds create a benefits cliff; however, some benefits have asset thresholds as well, where recipients no longer qualify for the benefit if their household assets exceed a predetermined limit. The threshold level and what qualifies as an asset depends on the benefit, both of which are highlighted below.

BenefitAsset limitWhat counts as an asset
Food and Nutrition ServicesNone
Women, Infants, and ChildrenNone
Work First$3,000Assets that can be converted to cash within 5 working days. Vehicles are excluded.
Housing ChoiceNone
Child Care SubsidyNone
Medicaid for Families with Dependent Children$3,000Home, car, home furnishings, clothing, and jewelry not counted. Retirement accounts are counted.
Medicaid for Infants and ChildrenNone
NC Health ChoiceNone

These asset limits may disincentivize savings since people might be weary of accumulating assets to avoid a loss of benefits. But, as the Pew Center reports, the research on the disincentivizing effects is mixed. In general, Pew’s review found that asset limits have little impact on household savings. But, asset limits that include vehicles under the definition of assets do impair vehicle ownership.

Disincentivizing vehicle ownership can be especially problematic since vehicle ownership increases people’s job opportunities and wages. However, none of the North Carolina benefits that we examined include vehicles as assets.

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