|What’s in the Welfare Reform Legislation?
Senate File 494 provides oversight of Iowa’s public assistance programs. This bill strikes a balance between protecting Iowa’s welfare programs for Iowans truly in need while at the same time protecting taxpayers from paying for services for a noneligible individual. The legislature has a responsibility to ensure that these programs are sustainable for the Iowans who at points in their lives have the need for a safety net.
This bill has received significant feedback from Iowans throughout the legislative process and has gone through many different versions. The bill does the following:
• Requires welfare applicants to complete a computerized identity authentication process to confirm their identity prior to receiving benefits.
• Codifies Iowa’s current income eligibility for the supplemental nutrition assistance program (SNAP). Iowa’s income eligibility is 160% of the federal poverty level. The federal income limit is just 130% of the federal poverty level meaning SF 494 includes more Iowans than required by the federal government.
• Requires applicants’ assets to be reviewed prior to enrollment in SNAP. Specifically, this bill sets those asset limits at $15,000 liquid assets for the household, and allows for one vehicle to have unlimited value, and a second vehicle to be up to $10,000 of value. If the value of the second vehicle exceeds $10,000, the amount in excess will be used to determine if the household exceeds $15,000 in liquid assets.
• Requires the state to check all income, employment, and financial institutions to ensure that applicants for welfare programs meet all eligibility criteria for those programs.
• Requires the state to have a real-time eligibility system in place by July 1, 2025. This program will be more user friendly for applicants than the current system.
• Requires cooperation with child support services as a condition of eligibility for Medicaid.
This bill is estimated to save the state $8 million and the federal government $42 million annually beginning in FY2027. These savings will come based on ineligible individuals not going on welfare programs and by SNAP individuals exceeding the asset limits in the bill. The bill does have initial costs to implement the new real-time eligibility system and for additional workers to assist Iowans in receiving the child support they are due.
Opponents of this legislation state that there is no fraud in the system, however, Iowa has been penalized $1.8 million by the federal government for having an error rate 3.2% higher than the national average. The USDA notified Iowa that the 10% error rate was caused by the errors of the state as a failure to verify required information and incorrect and inconsistent application of policies. Additionally, in FY2022, the Iowa Department of Inspections and Appeals found 2,761 founded investigations of SNAP overpayment. DIA estimates that the bureau’s investigative work found $3.3 million in total cost avoidance.
The state does still face significant workforce challenges, and this bill builds on the work the legislature has done to provide assistance to those truly in need of help while also ensuring that Iowans don’t continue to live off a cycle of government dependency.