Summary: This bill would remove state-imposed barriers to asset development for low-to-moderate income residents of the Commonwealth who receive support through the Department of Transitional Assistance and will promote gainful employment and financial stability.
Why This Matters: Low-to-moderate income families often face substantial barriers to gaining and keeping employment and to building the assets necessary to achieve financial stability. Having a car to drive to work, the education and vocational training necessary to gain sustainable employment, and the ability to build modest savings are key to breaking the cycle of poverty. However, many transitional assistance and education programs are restricted to those with few or no financial assets. These restrictions can have the unintended effect of restricting employment options due to a lack of reliable transportation, education, and training, and can create disincentives for saving.
What this Bill Would Do: This bill will help low-to-moderate income families transition successfully to gainful employment and financial stability by removing many of the state-imposed barriers currently in place:
- Encourage Modest Savings: The bill would encourage families to develop modest savings – a key to breaking the cycle of poverty — by increasing the TAFDC (Temporary Aid to Families with Dependent Children asset limit from $2500 to $5000. In addition, the bill would allow TAFDC and EAEDC (Emergency Aid to Elders, Disabled and Children) recipients to save up to $10,000 received from personal injury settlements or other third party sources in an Individual Asset Account to be used for debt reduction, job training, transportation, and/or housing.
- Support the Transition to Employment: For many workers, access to a reliable car and the ability to pay for work-related costs – transportation, clothing, and payroll deductions – is critical to gaining and maintaining employment. This bill would support families as they transition to employment by not counting one car per licensed driver in a household as an asset for TAFDC and EAEDC limits, and increasing the TAFDC work expense deduction from $90 to $250.
- Promote Education and Training: The bill would treat state educational grants and state or private work study the same as federal payments and not count them as income for EAEDC and TAFDC purposes. In addition, it would allow TAFDC recipients to use vocational education to meet their work requirements through their period of time-limited assistance and to obtain time limit extensions to complete such programs.