SNAP (Food Stamps): Facts, Myths and Realities PROGRAM FACTS SNAP is targeted at the most vulnerable. 76% of SNAP households included a child, an elderly person, or a disabled person. These vulnerable households receive 83% of all SNAP benefits.[i] SNAP eligibility is limited to households with gross income of no more than 130% of the federal poverty guideline, but the majority of households have income well below the maximum: 83% of SNAP households have gross income at or below 100% of the poverty guideline ($19,530 for a family of 3 in 2013), and these households receive about 91% of all benefits. 61% of SNAP households have gross income at or below 75% of the poverty guideline ($14,648 for a family of 3 in 2013).[ii] The average SNAP household has a gross monthly income of $744; net monthly income of $338 after the standard deduction and, for certain households, deductions for child care, medical expenses, and shelter costs; and countable resources of $331, such as a bank account.[iii] SNAP is responsive to changes in need, providing needed food assistance as families fall into economic hardship and then transitioning away as their financial situation stabilizes. SNAP participation historically follows unemployment with a slight lag. SNAP participation grew during the recession, responding quickly and effectively to increased need. As the number of unemployed people increased by 94% from 2007 to 2011, SNAP responded with a 70% increase in participation over the same period. [iv] As the economy recovers and people go back to work, SNAP participation and program costs, too, can be expected to decline. Unemployment has begun to slowly fall, and SNAP participation growth has flattened out. The Congressional Budget Office projects SNAP participation to begin declining in 2015, with both unemployment and SNAP participation returning to near pre-recession levels by 2022.[v] SNAP has a strong record of program integrity. SNAP error rates declined by 57% since FY2000, from 8.91% in FY2000 to a record low of 3.80% in FY2011.[vi] The accuracy rate of 96.2% (FY2011) is an all-time program high and is considerably higher than other major benefit programs, for example Medicare fee-for-service (91.5%) or Medicare Advantage Part C (88.6%). [vii] Two-thirds of all SNAP payment errors are a result of caseworker error. Nearly one-fifth are underpayments, which occur when eligible participants receive less in benefits than they are eligible to receive.[viii] The national rate of food stamp trafficking declined from about 3.8 cents per dollar of benefits redeemed in 1993 to about 1.3 cent per dollar during the years 2009 to 2011.[ix] As you may have read in local news, USDA is aggressively fighting trafficking, but while there are individual cases of program abuse, for every one instance of fraud, there are hundreds of stories of heartbreaking need. The need for food assistance is already greater than SNAP can fill. SNAP benefits don’t last most participants the whole month. 90% of SNAP benefits are redeemed by the third week of the month, and 58% of food bank clients currently receiving SNAP benefits turn to food banks for assistance at least 6 months out of the year.[x] The average monthly SNAP benefit per person is $133.85, or less than $1.50 per person, per meal. [xi] Only 57% of food insecure individuals are income-eligible for SNAP, and 26% are not income-eligible for any federal food assistance.[xii] PROGRAM MTHYS & REALITIES Farm Bill The cuts proposed in the Farm Bill aren’t a cut to benefits. While proposals such as restricting categorical eligibility and “heat and eat” may not be a direct cut to benefit levels, it is inaccurate to suggest that they will not impact benefits. Families who lose benefits because of changes in eligibility rules or enrollment processes will feel just as much pain in their refrigerators as if they had received a straightforward cut to their benefit allotment. The Farm Bill finds savings in SNAP without really hurting needy families. Given SNAP’s exceptional efficiency, it is simply not possible to achieve significant savings without directly impacting participants. About 95 percent of federal SNAP spending goes directly to benefits and the remaining spending covers important services like employment and training services that help participants move from welfare to work, nutrition education that empowers individuals to make healthy choices on a limited budget, and federal oversight and trafficking prevention for the roughly 200,000 retail stores that accept SNAP benefits.[xiii] The $4.1 billion SNAP “heat and eat” cut contained in the 2013 Senate Farm Bill is expected to cause about 400,000 low-income households to lose an average $90 per month in benefits, imposing a significant hardship for families struggling to put food on the table.[xiv] The steeper, $20.5 billion in cuts in the 2013 House bill would only hurt more families more deeply. 850,000 households would see their benefits cut by an average $90 per month. The cut to categorical eligibility would cause 2 million low-income individuals to lose their SNAP benefits completely, and 210,000 low-income children would be cut from free school meals because their enrollment is tied to their family’s SNAP participation. [xv] Proposed cuts will close loopholes that allow people who don’t need assistance into the program. The perception that a sizeable portion of SNAP participants do not really need benefits is flatly wrong. SNAP very effectively targets nutrition assistance at the poorest households, those with gross income of up to 130 percent of poverty and up to $2000 in assets. While some states have exercised a state option to align SNAP eligibility rules with other programs, enabling them to serve households over the federal income and asset limit, the vast majority of households fall well below the maximum. Eighty-three percent of SNAP households have gross income at or below 100 percent of the poverty line and these households receive about 91 percent of all benefits.[xvi] The average SNAP household has only $333 in assets. [xvii] States are implementing SNAP in a way that Congress did not intend and Farm Bill proposals correct that. Congress has provided several options to allow states to implement SNAP in the way that best meets their individual needs, including options to streamline and coordinate the administration of multiple programs serving the same families. Restricting categorical eligibility would require caseworkers to recertify the eligibility of applicants whose income and assets have already been verified by their enrollment in another program, creating unnecessary duplication and inefficiency. By restricting “heat and eat,” states will lose administrative flexibility to aid individuals in need of assistance. Restricting categorical eligibility and “heat and eat” options will increase the administrative burden on states without strengthening program integrity. Curtailing state flexibility and increasing administrative waste at a time when state and local budgets have already forced cutbacks will make it harder for states to effectively and efficiently administer the program. Heat and Eat The “heat and eat” policy is a loophole. The LIHEAP-SNAP relationship is a valid programmatic coordination. The “heat and eat” option allows states to streamline and coordinate the administration of multiple programs serving the same low-income families. By restricting “heat and eat,” states will lose administrative flexibility to aid individuals in need of assistance. At the same time, it will increase the administrative burden on states without strengthening program integrity. Families who struggle to put food on the table often make choices between buying enough food and paying for utilities According to a survey conducted by the National Energy Assistance Director’s Association, nearly one-third of families receiving LIHEAP assistance reported that they went without food during the last five years as a result of high home energy costs.[xviii] Similarly, many client households served by Feeding America food banks report that their household incomes are inadequate to cover their basic household expenses. In fact, 46% of client households served reported having to choose between paying for utilities or heating fuel and food.[xix] The “Heat and Eat” cut will disproportionally impact households with elderly and disabled individuals concentrated in 16 states. Elderly and disabled households are more likely to make use of the heat and eat policy when enrolling SNAP and will thus be disproportionately impacted. Furthermore, the full impact of the cut will be borne only by the 16 states currently using the policy option: CA, CT, DE, DC, ME, MA, MI, NH, NJ, NY, OR, PA, RI, VT, WA, and WI. While these 16 states distribute about 36.5% of all SNAP benefits nationwide, they will bear 100% of the cuts.[xx] Categorical Eligibility Categorical eligibility allows many people to automatically enroll in SNAP who wouldn’t otherwise qualify for the program. Categorical eligibility does not allow households to enroll automatically; they must still apply through the regular SNAP application process, which has rigorous procedures for documenting applicants’ income, citizenship, work status, and other circumstances. Categorical eligibility allows states the option of aligning SNAP eligibility rules for gross income and asset limits with TANF to reduce administrative costs and simplify the eligibility determination process. While three-fourths of SNAP households were categorically eligible, almost all would also have been eligible for SNAP under standard rules.[xxi] While a small number of households would not have met gross income and asset eligibility rules without categorical eligibility, SNAP families are still among the poorest households: The average SNAP household has a gross monthly income of $744 and net monthly income of $338.[xxii] SNAP rules limit eligibility to households with gross income under 130% of poverty and net income at or below 100% of poverty. While categorical eligibility allows states to set a higher gross income limit, only 1.5% of SNAP households in 2010 had monthly net income above 150% of the poverty line, so the policy has not made SNAP available to large numbers of households with incomes above the federal gross income limit of 130% of poverty.[xxiii] SNAP rules limit eligibility to households with assets of no more than $2000 ($3250 for households with a senior or disabled member). The average SNAP household still has assets of only $331.[xxiv] Additionally, the SNAP asset limit of $2,000 has not been adjusted for inflation in 25 years and has fallen by 48% in real terms since 1986.[xxv] Categorical eligibility has dramatically increased program participation. The dramatic increase in SNAP participation and costs is a result of the recession, not categorical eligibility. Our nation has seen the highest unemployment rates in nearly 30 years. SNAP participation historically follows unemployment with a slight lag. SNAP participation grew during the recession, responding quickly and effectively to increased need. As the number of unemployed people increased by 94% from 2007 to 2011, SNAP responded with a 70% increase in participation over the same period. [xxvi] As the economy recovers and people go back to work, SNAP participation and program costs, too, can be expected to decline. Unemployment has begun to slowly fall, and SNAP participation growth has flattened out. The Congressional Budget Office projects SNAP participation to begin declining in 2015, with both unemployment and SNAP participation returning to near pre-recession levels by 2022.[xxvii] Eliminating categorical eligibility would significantly reduce costs. Eliminating categorical eligibility would achieve savings by causing about 2 million low-income people currently enrolled in SNAP to lose their benefits and 210,000 children to lose free school meals.[xxviii] Many more families newly applying for assistance would have their benefit issuance delayed because of the increased complexity of applying and additional processing time required. This human cost is too high a price to pay with so many families struggling to get by in this economy. In addition to the loss of needed food assistance for struggling families, this savings would come at the expense of increased administrative costs. Eliminating the streamlined application process that categorical eligibility allows would require states to allocate staff time to duplicate enrollment procedures and incur the cost of modifying their computer systems, reprinting applications and manuals, and retraining staff. Program Growth Generous eligibility rules and program fraud and abuse have caused participation in SNAP to balloon, sharply driving up the cost of the program when the nation can least afford it. The dramatic increase in SNAP participation and costs is a result of the recession, not categorical eligibility. Our nation has seen the highest unemployment rates in nearly 30 years. SNAP participation historically follows unemployment with a slight lag. SNAP participation grew during the recession, responding quickly and effectively to increased need. As the number of unemployed people increased by 94% from 2007 to 2011, SNAP responded with a 70% increase in participation over the same period. [xxix] As the economy recovers and people go back to work, SNAP participation and program costs, too, can be expected to decline. Unemployment has begun to slowly fall, and SNAP participation growth has flattened out. The Congressional Budget Office projects SNAP participation to begin declining in 2015, with both unemployment and SNAP participation returning to near pre-recession levels by 2022.[xxx] Administrative Spending We could achieve significant savings by cutting administrative expenses alone without doing harm to SNAP participants. SNAP administrative expenses are small. Federal administrative expenditures for SNAP equal less than 4.5% of overall federal SNAP costs. About 95% of that is the federal share of state administrative costs for operating the program. [xxxi] SNAP caseloads have risen by more than 75% since FY2007 due to historic unemployment, but federal spending on state administrative costs has only risen by 17% over the same period.[xxxii] SNAP administrative expenses are essential. Administrative expenditures cannot be cut significantly without compromising program integrity. Administrative expenditures in SNAP are used for essential functions like verifying eligibility, preventing benefit trafficking, administering work requirements, and related functions. Much of the administrative savings that is being discussed isn’t what you or I would consider program administration. For example, it includes spending on employment and training services that help SNAP participants move from welfare to work and federal oversight of the roughly 200,000 retail stores that accept SNAP benefits. Overstating the level of administrative spending really amounts to a call for cuts to SNAP benefits, eligibility, and essential services...feedingamerica.org/how-we-fight-hunger/programs-and-services/public-assistance-programs/supplemental-nutrition-assistance-program/snap-myths-realities.aspx
Posted on: Fri, 08 Nov 2013 18:09:55 +0000
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