Hochul wants to make social services 'fiscal cliff' less precipitous

ALBANY — Gov. Kathy Hochul and two powerful state legislators say they are looking to make a significant change in welfare law so New Yorkers in need will no longer be denied temporary public assistance because they exceed outdated limits on how much they can earn and save.

The plight of social service recipients facing these asset limits has been exacerbated by the COVID-19 pandemic and its economic shutdown, Democratic and Republican leaders agreed. Many recently unemployed workers seeking temporary assistance for the first time have to "spend down" their assets, including savings or a second car, in order to qualify. Others were forced to pass up a job or a raise of as little as 50 cents an hour to keep their public assistance, state officials and advocates said.

It's called the "benefits cliff" — the limit on how much recipients can earn and save before they are dropped or barred from Temporary and Disability Assistance, formerly called welfare. Advocates and state officials say the benefits cliff is an outdated, counterproductive procedure that forces New Yorkers deeper into a hole of dependency, instead of providing a bridge out of it.

Hochul and two of the State Legislature’s progressive leaders, Sen. Alessandra Biaggi (D-Bronx) and Assemb. Yuh-Line Niou (D-Manhattan), are targeting the "asset test" in a law created to help avoid fraud, waste and abuse of the social services system.

The legislature’s two Republican leaders also believe the law should be adjusted to help needy New Yorkers but say there still must be a balance to ward off fraud and waste.

Hochul wants to raise the caps on savings, now about $2,000, and earnings — now, the first $90 of earnings plus 55% of the remainder each month are not counted against public assistance aid. Niou and Biaggi want to eliminate the caps altogether, with less rigid safeguards against fraud and waste. Some advocates are seeking a sliding scale to avoid an abrupt cutoff of aid.

The maximum temporary assistance is $789 a month for a family of three in New York City. Recipients are limited to 60 months, or five years, in a lifetime.

"The asset test, being so low, forces our clients into a permanent state of financial crisis in order to be able to apply for benefits and makes it nearly impossible for them to dig their way out of it," said Abby Biberman. She is the senior supervising attorney for the New York Legal Assistance Group in Albany, an advocate for legal services for the poor combating economic, social and racial injustice.

The public assistance cash limit was last increased by 5% in 2012, and the allowance for funds to pay rent hasn’t increased significantly for decades, Biberman said.

Here’s a case: A family consisting of a parent and two children can receive $1,580 to cover their monthly rent. The family also can get $389 in monthly cash as well as benefits from the Supplemental Nutrition Assistance Program — SNAP — to help pay for food. If the parent then lands a job earning $1,500 per month, or $18,000 a year, which is below the state poverty level of $21,720 for a family of three, the family would then get kicked off temporary public assistance. Under a formula in current state law, the "standard need" for the household is $1,459 per month.

"They have fallen off the benefits cliff," Biberman said, relaying the experience of a client. "The public assistance ‘standard of need’ is … simply outdated. In addition to that, it really doesn’t allow for clients to smoothly transition off of benefits and achieve financial stability."

Hochul said the limits are holding back families and individuals during the pandemic who never expected to depend on social services.

"This has been a tough hit for all people from all walks of life, this pandemic," Hochul said. "It’s winding down, but there’s still the collateral damage, the fallout, from people who have not been able to earn the same amount of income, so they are falling between the cracks. That’s what that adjustment is about."

About 469,000 New Yorkers receive Temporary and Disability Assistance statewide.

Hochul hasn’t released details of her proposal. It will be subject to negotiation with the legislature, where an existing bill would eliminate the asset limits. But her inclusion of the proposal in her 2022 agenda creates a momentum to change the assets cap, as similar bills foundered in 2018, 2019 and in 2020.

Seven states — Alabama, Colorado, Hawaii, Illinois, Maryland, Ohio and Virginia — have no asset test or limits, according to the National Conference of State Legislatures. In 2018, Massachusetts more than doubled its limit and Vermont more than quadrupled its limit.

"I look forward to learning more specifics on the governor’s plan, because addressing poverty and homelessness must absolutely be a priority," said Senate Republican leader Rob Ortt of North Tonawanda. "However, it’s important that we work toward a balanced solution that removes earnings disincentives but still maintains important safeguards that are necessary to prevent fraud and abuse."

Assembly Republican leader Will Barclay said addressing homelessness and poverty "are critical priorities, especially in the current climate caused by the pandemic." He called the benefits cliff a "disincentive for individuals to get back to work or to increase earnings."

"We should get help to the people who need it, but we obviously need to be mindful of abuse in the system," Barclay said. "An asset test or limit is a measure of protection for taxpayers. For the most part, Governor Hochul has recognized the importance of such a requirement with asset limits. But any proposals from the radical left to eliminate all asset limits are completely irresponsible — New York State shouldn’t be in the business of writing blank checks."

Ron Deutsch, executive director of New Yorkers for Fiscal Fairness, an advocacy group for the poor and working poor, praised Hochul's plan. "Public assistance is meant to be a bridge for families and individuals who fall on hard times," he said. "Unfortunately, the system itself mires families in poverty by limiting how much they can earn or save and still be eligible for services and benefits they desperately need. "

Biaggi's and Niou's bill states that eliminating the limits also would save the state and county governments the cost of conducting detailed asset tests.

Niou, the bill’s Assembly sponsor, said the asset test is far-reaching and impacts New Yorkers from young families of women and children to seniors. She said the test plays a role in the Elderly Pharmaceutical Insurance Coverage program to provide affordable medications to 325,000 older New Yorkers; and the Supplemental Nutrition Assistance Program, which helps put food on the table for 2.7 million New Yorkers; as well help in paying for heating bills and child care.

"People I know are afraid to take a small raise, as little as $10," Niou told Newsday. "They are forced to stay in the cycle instead of move upwardly because they are trapped. … It’s too much of a risk when so much is at stake."

Biaggi, the Senate sponsor, said the pandemic underscores the need for change.

"As we continue to navigate the COVID-19 pandemic, it is crucial for New York State to remove all asset limits that impede New Yorkers from accessing public assistance," Biaggi said. "It is our responsibility to ensure that those in need of government programs and assistance are not met with barriers or forced to spend down in order to become eligible — which only brings them further from economic self-sufficiency and defeats the purpose of social services to uplift those in need of assistance."

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.