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.
| Benefit | Asset limit | What counts as an asset |
|---|---|---|
| Food and Nutrition Services | None | |
| Women, Infants, and Children | None | |
| Work First | $3,000 | Assets that can be converted to cash within 5 working days. Vehicles are excluded. |
| Housing Choice | None | |
| Child Care Subsidy | None | |
| Medicaid for Families with Dependent Children | $3,000 | Home, car, home furnishings, clothing, and jewelry not counted. Retirement accounts are counted. |
| Medicaid for Infants and Children | None | |
| NC Health Choice | None |
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.
