Policy Brief
June, 2008
State Asset Building Policy
State Announces Direct Deposit for Unemployment Benefits
This week, the Michigan Unemployment Insurance Agency (UIA) announced that it will begin offering unemployed workers two new electronic options for receiving their unemployment benefit. The change allows for direct deposit to a bank account or to a debit card that allows recipients to receive cash back from ATMs or make purchases at any merchant that accepts Visa. Prior to this change, unemployed workers could only receive benefits in the form of a check mailed to their home.
Acting UIA Director Chris Peretto said of the change: “The debit card and direct deposit options will be faster and more secure and cost efficient than the current practice of mailing paper checks.” The UIA will continue to offer mail checks for a period of time for those who prefer paper unemployment checks.
The ABPP supports this change in policy because it will streamline the UIA process, better enabling unemployed workers to manage their family budget, and encourage more people to utilize traditional banks and credit unions as opposed to predatory check cashing stores.
For more information visit www.michigan.gov/uia
Federal Asset Building Policy
Congress Override of Presidential Veto a Victory for Asset Building
With overwhelming bipartisan support, both the U.S. Senate and House of Representatives passed the Farm Bill (H.R. 2419) with enough votes to override its previous veto by President Bush. In addition to funding agricultural programs the Farm Bill contains two significant reforms in asset building policy: increases in the asset limits for recipients of Food Stamps and the authorization of a new Individual Development Account (IDA) pilot program for beginning farmers and ranchers.
Highlights of The Farm Bill (H.R. 2419)
Asset Limits for Food Stamps
Since 1986, the asset limits for Food Stamp (now called the Supplemental Nutrition Assistance Program eligibility has been frozen at $2,000 for most households and $3,000 for households with members who are elderly or disabled. Adjusted for inflation ($1020 and $15301 respectively in 2008 U.S. dollars), this has effectively reduced asset limits, seriously hindering the ability of working families to find lasting financial security.
To address this barrier to self-sufficiency, The Farm Bill increases the asset limits to $3,500 (and $4,500) and indexes asset limits to inflation in future years. The bill also exempts tax-preferred retirement accounts and education accounts from asset limits (current law exempts 401(k) accounts but not Individual Retirement Accounts) making the law less confusing and punitive.
According to the Congressional Budget Office, these changes will make nearly 125,000 new people newly eligible for Food Stamps by 2017.
New Individual Development Accounts (IDA) for Farmers and Ranchers
The Farm Bill authorizes a new IDA program for beginning farmers and ranchers. Congress must still designate funds to make it operational, however $5 million annually would be awarded in competitive grants to nonprofits, tribes, and local governments to run and operate IDAs. Eligible IDA participants would receive a 2-to-1on their savings, up to $6,000, towards the purchase of farming or ranching equipment, supplies and training, including livestock, land, building, seeds or other necessary items. The competitive grant program would be operational in at least 15 states and require a 50% local match, up to $250,000. The competitive grant program would run through 2012.
Lastly, The Farm Bill establishes and funds a Rural Microentreprenuer Assistance program. This four-year program will receive $4 million for the first three years and $3 million in 2012.
President Bush vetoed the Farm Bill on May 21, 2008. Later that day, the bill passed the House (316-108) and on May 22, 2008 it passed the Senate (82-13) to become Public Law No: 110-234.
To view these bills, visit the Library of Congress at: http://thomas.loc.gov/ |
