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Memorandum of Support

Empire Justice Memo of Support: Provide a Fair & Realistic Auto Resource Rule & Remove the Sunset Provision

S.410 (Krueger)/A.7236 (Titus)

Empire Justice strongly supports these two bills which would replace the current two-tiered automobile resource exclusion with a uniform $9300 exemption, and extend a number of other resource provisions that were enacted as part of welfare reform.  These exemptions include a $2000 general resource exemption, a savings account to buy a car or go to school, burial plots and funeral agreements.  However, we urge that both bills be amended to remove Section 2, the sunset provision.  If this bill is not enacted there will be no resource rules in statute, and the ability for a family to set aside small amounts of money in the event of the receipt of a lump sum, will be eliminated.  Social Services Law 131-a(12(c) expressly eliminates only those resources set forth in Social Services Law 131-n when calculating the period of ineligibility imposed under the lump sum rule. [1]

The sunset provision in the current bill references the 1997 welfare reform act as the source of its sunset date, which would have caused this section to expire in 2001, except that it a has been amended every two years since 2001. Removing the sunset provision would make Social Service Law Section 131-n a permanent provision of the law and eliminate the necessity of continuously extending the sunset in order to maintain the resource exemptions. Many of the exemptions in this section were enacted as a part of the 1997 welfare reform legislation and their purpose was to encourage personal savings and enhance self-sufficiency.  In 1997, because of the transition from the federal AFDC program, which had contained resource exemption provisions, to the TANF block grant, it became the sole responsibility of the states to continue such resource exemptions as they desired.  If SSL 131-n were to sunset, there would be NO resource exclusions in New York’s welfare programs and eligibility for public assistance benefits would require a household to use up any resource they have, virtually eliminating any possibility for the family to regain self-sufficiency.  Thus we urge the amendment of both bills to remove the sunset provisions.

Otherwise we fully support both bills.  Persons who apply for public assistance [Family Assistance and Safety Net Assistance] are not eligible for benefits if they have resources in excess of amounts set forth in Social Services Law §131-n.  Current law permits applicants to retain a vehicle with a fair market value of not more than $4650, unless the individual needs the vehicle to work or look for work. In that case, the person is allowed to have a vehicle with a fair market value that does not exceed $9300.  These bills will raise the resource level for automobiles to a uniform $9300 and thereby permit low income families to own reliable cars under all circumstances.

New York’s current automobile resource level of $4650 is extremely outdated.  The food stamp program set the automobile resource limit at $4500 in 1977.  It now permits states to exempt one vehicle per adult per household.  Currently 32 states exempt at least one automobile altogether, regardless of value. [2]  Although we hope that New York will eventually follow the lead of these other states and adopt an exemption for one vehicle regardless of value, we support these bills, which are a vast improvement over current law. 

The proposed enactment of a uniform auto resource exemption would also address the concern that New York’s current law actually discriminates against those with disabilities.  A rule permitting only those who work or who are looking for work to have a vehicle exceeding the $4650 fair market value creates an eligibility standard that is different for persons with disabilities and violates the Americans with Disabilities Act (ADA). 42 USC §12132.  Persons on public assistance, who are disabled and unable to work, are “qualified individuals with a Disability” under the ADA.  Local Social Services districts and the Office of Temporary and Disability Assistance are “public entities” as defined under this statute.  The ADA plainly prohibits public entities from excluding the disabled from participating in or benefitting from a public program, activity or service “solely by reasons of disability.”  Additionally, the ADA regulations promulgated by the U.S. Department of Justice place an affirmative obligation on DSS to prevent this type of disability discrimination. [3] 

There is minimal fiscal impact associated with this bill.  Most public assistance excess resource denials are caused by funds held in bank accounts or IRAs and not because of automobile ownership.   Fewer than 10% of excess resource denials are actually based the value of the household’s automobile. [4]

End Notes:

 [1] Under the lump sum rule, a family that receives a lump sum of income is ineligible for public assistance for a period of time calculated by the size of the lump sum divided by the household standard of need.  Social Services Law §131-a(12)/(a)/
 [2] 17 states exempt all vehicles owned by the household, and 11 of these states exempt one car per driver or adult. G. Rowe and M. Murphy, The Welfare Rules Databook: State Policies as of July, 2009 (The Urban Institute).
 [3] “A public entity shall not impose or apply eligibility criteria that screen out or tend to screen out an individual with a disability or any class of individuals with disabilities from fully and equally enjoying any service, program or activity unless such criteria can be shown to be necessary for the provision of the service, program, or activity being offered. “   28 CFR §35.130(b)(8). 
 [4] Based on Empire Justice’s Center analysis of OTDA fair hearing decisions issued between November 1, 2010 and October 7, 2011.

This memo was prepared by:

Barbara Weiner

Empire Justice Center
119 Washington Avenue
Albany, NY 12210

(518) 462-6831
(518) 935-2852