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This happens in the UK as well. Because my grandparents have a few thousand saved up in a bank account (were poor but careful in earlier life), they miss out on tens of thousands worth of council tax subsidies, tax credits, pension credits, free bus passes et cetera.

When it comes to welfare, those ON it should recieve a lot less in total value than those who don't need it. Not the other way around.

So it depends on where the threshold is and what kind of disparity it creates as to whether this proposal is any good. But I expect it to hit those just over the threshold the hardest; probably those who were poor but did work all their life.