Gov. Kim Reynolds signs law creating Iowa asset test for SNAP benefits. How it works:

Iowans receiving public assistance will soon face new asset tests and eligibility checks, the culmination of a years-long push by Iowa Republicans to impose stricter requirements on benefit programs.

The move is expected to kick thousands of Iowans off of Medicaid and SNAP benefits and has drawn the condemnation of food banks and pantries that say they are already struggling to keep up with the need. To help soften the blow, Gov. Kim Reynolds promised to use federal funding to expand food banks.

Senate File 494, which Reynolds signed Thursday will require Iowa families receiving food assistance funds to undergo a new asset test before they can obtain those benefits. And Iowans receiving a range of benefits, including Medicaid and other public health care programs, will face regular checks to make sure they qualify.

Supporters argue the new system will save taxpayers money and ensure benefits are going to those who need them.

"We should not be overspending on benefits for people who don't qualify for them," Senate President Amy Sinclair, R-Allerton, said on a May 26 episode of "Iowa Press" on Iowa PBS. "And having an asset verification system that allows us to get those dollars into the hands of the folks who need them the most is what Iowans ought to be doing."

Democrats and a coalition of anti-hunger and faith groups have fought against the law, pointing out that fraud is rare and families in need are likely to lose benefits.

More than 200 Iowa faith leaders signed a letter in April opposing the legislation "on moral, religious and humanitarian grounds."

The Des Moines Area Religious Council, which operates a food pantry network, released a statement denigrating the new law that comes on the heels of "record numbers of people seeking out food assistance for the first time or the first time in a while."

"No matter the circumstances, we will continue our work to strengthen the SNAP program and fight against these wrong-headed policy changes that ignore the reality of your situation," DMARC said.

Iowa's new law comes as the federal government is also set to increase work requirements for Supplemental Nutrition Assistance Program (SNAP) recipients 54 years old and younger under the deal President Joe Biden struck with House Speaker Kevin McCarthy to raise the debt ceiling.

More: Food pantries fear Iowa's new SNAP asset tests could overwhelm them with more clients

What would Iowa's public assistance law do?

The law requires state agencies that deliver benefits, such as the Department of Health and Human Services and Iowa Workforce Development, to check new sources of information to determine if Iowans are eligible.

Before Iowans could be enrolled in benefit programs, they will need to verify their identity through a questionnaire that could be completed online, in person or by phone — but can't be done through a paper application.

The law requires Medicaid recipients in Iowa to cooperate with child support services as a condition of receiving benefits through the program.

One of the most controversial elements of the law is the new asset test to receive SNAP benefits, which are currently available, without an asset test, to Iowans making up to 160% of the federal poverty level. That's about $48,000 for a family of four.

Once the new law takes effect, any Iowa households with liquid assets of more than $15,000 will not be allowed to receive SNAP benefits. The limit does not count the value of a home, the household's first car and up to $10,000 of the value of a second household car.

When will the new public assistance requirements take effect?

The changes in the law may not take effect right away. The law says the Department of Health and Human Services must implement the new requirements incrementally, beginning on July 1 of this year, with a goal of fully implementing the law no later than July 1, 2025.

Any provisions in the law that require federal approval will take effect once that approval is granted.

Who will be affected by the public assistance law? And could Iowans lose their benefits?

Among those affected by the new law are the roughly 287,000 Iowans who receive SNAP benefits each month and the more than 800,000 Iowans receiving health care through Medicaid.

The nonpartisan Legislative Services Agency estimates that, beginning in fiscal year 2026, about 1% of Iowans will have their benefits canceled "due to discrepancies."

That means about 8,000 Medicaid recipients and 2,800 SNAP recipients would be kicked out of the programs.

The agency estimates 600 people would be removed from the Children's Health Insurance Program (CHIP) and 100 would be removed from the Family Investment Program.

Republicans dispute that anyone eligible for benefits will lose them because of the law. Instead, they say putting a new system in place that allows agencies to cross-check information about who is eligible could mean more Iowans receive benefits.

How much will the law cost to implement? And how much will it save?

The state is expected to spend $7.5 million to set up the program over the next two years, then state spending is predicted to decline by $200,000 in the third year and $8.2 million annually in subsequent years.

The drop in spending is much larger when federal money is included. SNAP benefits are entirely federally funded, and federal funding makes up a large portion of Medicaid spending as well.

In all, the law is expected to reduce spending on public assistance programs like SNAP and Medicaid by more than $42 million annually once it's fully in place. Democrats say that means less money will go to helping Iowans and will instead help pay for benefits for people in other states.

The law allows the state to contract with a private company to check if Iowans are eligible for public assistance programs.

Aren't Iowa food banks and pantries already struggling to meet demand?

Iowa's food banks and food pantries are worried the law could steer more people to use their services if they lose SNAP benefits, at a time when food banks are already seeing record need.

On Wednesday, Reynolds announced she was using $5 million in federal American Rescue Plan Act funds to create a new grant program to help food banks and food pantry networks with building construction, expansion and remodeling so they can distribute more food.

The Food Insecurity Infrastructure Fund will award grants worth 25% of project costs, capped at $2 million. The Iowa Economic Development Authority will accept applications between June 1 and July 1, or until the funds are exhausted.

Food banks can apply at iowagrants.gov.

"Iowa is making long-term investments to reduce food insecurity in our communities — supporting food banks and their networks to better serve those in need," Reynolds said in a statement. "This one-time infrastructure investment will help improve capacity and distribution at Iowa’s food banks, and ensure more Iowans have access to the food they need."

Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@registermedia.com or by phone at 515-284-8169. Follow him on Twitter at @sgrubermiller.

This article originally appeared on Des Moines Register: Kim Reynolds signs law with stricter requirements for SNAP, Medicaid