This bill increases the maximum dollar amount of exempt resources from $\$2,000$ to $\$5,000$ for determining eligibility for certain federal financial assistance programs under the Act of October 19, 1973.
Tina Smith
Senator
MN
This bill amends the Act of October 19, 1973, to increase the maximum dollar amount of exempt resources for determining eligibility for federal financial assistance or benefits. Specifically, it raises the resource limit from $\$2,000$ to $\$5,000$. The legislation also includes minor technical corrections to the existing language of the Act.
Asset Exemption Cap Jumps to $5,000 for Federal Assistance Eligibility
This bill section is short, sweet, and focuses on one thing: raising the resource limit for people seeking financial assistance under the Act of October 19, 1973. Currently, if you apply for certain federal or federally assisted programs governed by this Act, your assets (like savings) can’t exceed a certain amount—that limit was $2,000. This bill bumps that maximum up to $5,000.
The New Math of Eligibility
Think of this as a much-needed inflation adjustment for the safety net. For years, having more than $2,000 in savings could disqualify you from assistance, forcing people to spend down their emergency funds just to qualify. If you're a single parent working two part-time jobs and finally manage to save $3,500 for a car repair or a medical emergency, under the old rules, that savings cushion would likely be counted against you, potentially cutting off benefits like food assistance or housing aid. This change, found in Section 1, means that $3,500 is now safe, allowing people to hold onto a slightly larger emergency fund without losing critical support.
Why $5,000 Matters to Real People
This isn't about getting rich; it's about stability. For the average worker living paycheck to paycheck, $5,000 acts as a crucial buffer against unexpected life events—a broken refrigerator, a sudden medical bill, or a few weeks of missed work. By increasing the exempt resource cap, the legislation acknowledges that requiring people to be completely broke to receive help is counterproductive to long-term stability. This means more low-income individuals and families who are just hovering above the old $2,000 limit can now qualify for assistance, or maintain their current benefits, while retaining a small amount of savings.
The Fine Print Cleanup
Beyond the financial change, the bill includes some minor housekeeping. Section 1 also features technical fixes to the existing language in the 1973 Act. For instance, it corrects a typo, changing the word “cede” to “ceded” in paragraph (4) and swaps out an “or” for a comma in paragraph (1). These aren't policy changes, just administrative clean-up that makes the statute clearer for the people who have to administer these programs. Overall, this section is a straightforward win for people relying on federal assistance, giving them a little more breathing room to build a small financial cushion without jeopardizing their eligibility.