November 16, 2018
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We should stop punishing poor people for saving money

Contributed photo | BDN
Contributed photo | BDN
Heather Denkmire

Being very careful to look over my shoulder both ways as I backed out of the parking lot by Portland’s Back Cove — where there are lots of pedestrians, cyclists and zooming fast cars — I saw nothing. All clear. I backed up. But then — BAM. I slammed right into a telephone pole. Hard. There was serious damage — $3,600 worth, it turns out.

Although I hated knowing I’d wipe out a big chunk of my savings with the $500 deductible, after recovering from my embarrassment, I was filled with gratitude. I actually have the cash on hand to cover the deductible. It felt like a miracle.

In my first column in October 2012, I talked about feeling scared to make money because I didn’t want to lose the security of the $325 in food stamps and the free health care MaineCare provided. I was under the impression — generally correct — that if I made even just a few hundred dollars more, I might lose the benefits. At that time, loss of food stamps and MaineCare would have been devastating, just as I’m sure it’s devastating for the 9,000 people just removed from the SNAP program.

During the recertification process for my daughters’ MaineCare eligibility this winter, the DHHS worker asked if I recently reapplied for SNAP. I hadn’t. Things are going a lot better, and I’ve been OK without that extra help — it was only $15 per month at the end. As I mentioned above, I’ve even set aside some savings. But things are still pretty tight. It’s not that I can’t pay my bills each month, but any little bit could help. I’ve got a tooth that has been hurting, a major client may not need my help in the near future and I don’t have a lot in savings, so I applied.

Here’s what I learned this time around: It’s okay if I have money in the bank. I can have savings. The government won’t say to me, as I apply for SNAP again, “Oh, you have $500 in the bank? You should use that for food instead of getting SNAP benefits.”

It seems I’ve found something that’s being done pretty well here in Maine when it comes to SNAP and MaineCare, for parents and children: There is no asset limit in determining eligibility.

However, for Temporary Assistance for Needy Families, or TANF, recipients it’s a different story. If someone has assets valued at $2,000 or more, they can’t qualify for TANF benefits. This means if someone is in crisis and she applies for help, she must spend down her savings — if she has been lucky enough to accumulate any — before qualifying for assistance. This is a disincentive to save, and it must change. Savings are what provides security and self-reliance.

Maine could remove the asset limits for TANF and prevent needlessly long stays on welfare. At the same time, people would have a chance to build some financial independence. Even just raising the asset limit to $10,000 or more, a dollar amount unattainable by most of us living in or near poverty, could help people break away from the crisis cycle.

When I slammed into that telephone pole, there were a lot of things that could’ve gone wrong that didn’t. I didn’t hit a person. I didn’t damage the pole. My insurance is covering it without any trouble. And, most of all, I have savings to pay for my part of the repair. In fact, it won’t even wipe out all my savings.

But more than 46 percent of people living in Maine don’t have enough cash, or “liquid assets,” to “subsist at the poverty level for three months in the absence of income,” according to the Corporation for Enterprise Development. We live in liquid asset poverty, vulnerable to unforeseen emergencies and unable to meet our future needs.

Allowing savings by removing or at least dramatically increasing the asset limits for TANF and MaineCare, as was done for SNAP, will make it possible for people facing temporary setbacks to recover without spiraling back down into crisis. It will save all of us money in the long run.

Heather Denkmire is a writer and artist who lives in Portland with her two young daughters. After a few challenging years, she is growing her small business, where her team helps nonprofit organizations win grants. She can be reached at column@grantwinners.net. Her columns appear monthly.


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