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About those 2 million households losing SNAP benefits

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Researchers at Mathematica Policy Research published a brief last week summarizing an analysis that shows the impact of certain Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) provisions in the House-passed Farm Bill. The analysis concluded that changes to countable resources and how states consider “broad-based categorical eligibility” in SNAP would result in 2 million fewer recipient households.

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Several media outlets picked up on the analysis emphasizing the loss of SNAP for “millions of Americans.” Unaddressed was the context in which these changes were proposed, as well as the important policy questions that are raised. How much income should a household have and still be eligible for SNAP? How much in assets should a household be allowed to have? These details were largely ignored and deserve some consideration.

The Mathematica simulation covers what is called “broad-based categorical eligibility,” and states use it to work around asset and income limits in SNAP. The intent behind broad-based categorical eligibility (which dates back to welfare reform) is to ensure that recipients of government benefits (even if it does not involve cash) from other safety net programs like TANF are also eligible for SNAP. Originally designed as a way to align eligibility rules across programs, broad-based categorical eligibility has been used to eliminate asset tests and make certain households with income above the limit eligible for SNAP (130 percent of the federal poverty level).

Russell Sykes wrote a good explainer in 2016 (page 30):”The workaround on income rules confers eligibility to many households that otherwise would not be eligible for SNAP because their gross incomes exceed 130 percent of poverty.”

As a practical matter, the changes simulated from the House Farm Bill would reinstate and raise the asset test for SNAP households (assets in the amount of $7,000 for households without elderly members and $12,000 for those with elderly members would be allowed, not counting a vehicle, primary home, or the first $2,000 in savings) and reestablish the income requirement that makes a household ineligible if it exceeds 130 percent of the federal poverty line, or $32,630 for a family of 4. It also allows vehicles up to $12,000 in value to be excluded from countable assets.

Currently, households in most states can have any amount of assets, including bank accounts, investments, and property and still be SNAP eligible if their income is low enough. Many states also currently allow household income to go above 130 percent of the federal poverty line. For households with a lot of deductions, income could be as much as $50,200 for a family of four to still be eligible for SNAP.

This context is important when interpreting the estimates of SNAP caseload declines. It was estimated that 677,000 households with an elderly person would lose SNAP due to these changes. But because households with elderly members do not have a gross income test, this means that these households would have assets of more than $12,000 or a high-value car.

To some, this illustrates how SNAP has gone beyond households that are truly low income in recent years. Caseload trends contribute to these concerns. The number of households receiving SNAP remains 60 percent higher in 2018 than 2008, the year in which these workarounds largely started to be implemented. Even with the 8 percent decline identified in the study, SNAP would still serve 44 percent more households than in 2008. With such a strong current economy, the question remains: Why are so many households still receiving SNAP?

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Source: USDA, Food and Nutrition Service, SNAP Participation FY 2000–2018.

The House Farm Bill would result in some existing SNAP households no longer being eligible because they have more than $7,000 in assets ($12,000 if elderly), they have income above 130 percent of the federal poverty level, or they have a high-value car. Whether these are the appropriate asset and income limits for a SNAP household is an important policy discussion to have. Unfortunately, too much attention was paid to the projected decline in caseloads instead of a broader policy discussion about the appropriate reach of SNAP and how assets and income limitations fit into the program.

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