USDA seeks to narrow eligibility for food stamps

Proposal looks to tighten eligibility for people who receive noncash benefits

Agriculture Secretary Sonny Perdue said the draft rule will close a loophole that allows people with gross incomes above 130 percent of the poverty level to become eligible for the Supplemental Nutrition Assistance Program and potentially qualify for food stamps. (Bill Clark/CQ Roll Call file photo)

The Trump administration will push ahead with a proposal to tighten food stamp eligibility for people who receive certain noncash benefits from a federal welfare program, a move that could end aid for up to 3 million people.

Agriculture Secretary Sonny Perdue said the draft rule published in Tuesday’s Federal Register will end what he and congressional Republicans say is a loophole that allows people with gross incomes above 130 percent of the poverty level to become eligible for the Supplemental Nutrition Assistance Program and potentially qualify for food stamps through the program.

They can do so by receiving nominal assistance from the nation’s federal welfare program such as a referral to services or a brochure from the Temporary Assistance for Needy Families, run by the Health and Human Services Department. The Government Accountability Office has raised questions about the use of TANF-financed referrals and brochures being used by states to trigger SNAP eligibility.

[White House wants to update poverty thresholds. It could affect food stamps and Medicaid benefits]

States operate the welfare and food stamp programs for the federal government. USDA officials say that by establishing tougher SNAP eligibility requirements for TANF recipients, they reduce the number of SNAP applicants with gross incomes as high as 200 percent of the federal poverty level. For 2019, a family with a gross income of $51,500 would qualify under the 200 percent level.

The comment period will start Wednesday and run for 60 days.

SNAP, formerly known as food stamps, serves about 36 million people, the majority of whom are children, elderly or disabled.

Stacy Dean, vice president of food assistance policy for the Center on Budget and Policy Priorities, said the proposal as outlined “would take basic food assistance away from working families, seniors, and people with disabilities, and make it harder for struggling people to make ends meet. Instead of punishing working families if they work more hours or penalizing seniors and people with disabilities who save for emergencies, the president should seek to assist them with policies that help them afford the basics and save for the future.”

People who receive noncash aid from TANF, such as a referral to social services or assistance applying for SNAP, can become eligible for SNAP under a process known as broad-based categorical eligibility. The practice is used by 40 states, the District of Columbia, Guam and the U.S. Virgin Islands. Supporters say it streamlines the review process and reduces paperwork while providing food aid to people with inadequate incomes to cover living costs and provide food for their families..

States with broad-based categorical eligibility are not required to consider a person’s assets and can consider applicants with incomes above 130 percent of the federal poverty threshold. Eligibility does not mean a person automatically qualifies since applicants through this process must end up with a net income of 100 percent of the poverty level, $25,750 for a family of four, after deductions for housing, child care and health costs.

But Perdue and critics say a nominal TANF benefit allows people with higher income and assets to draw food stamp benefits that should be limited to very low-income people.

“At the USDA, we’re taking action to strengthen SNAP by reforming what we call broad-based categorical eligibility. This allows states to bypass the congressionally mandated income and asset tests,” Perdue told reporters Monday. “Our fix restores confidence in eligibility for SNAP is consistent from state to state, contains costs and better aligns SNAP with other means-tested programs nationwide.”

He cited the case of a Minnesota millionaire who told state legislators in 2018 that he and his wife had received $6,000 in food stamp benefits over 19 months under categorical eligibility. Rob Undersander testified before a state legislative panel that he had qualified for SNAP because his retirement income was low and his assets of $1 million were not considered.

Under the draft rule, only people who receive “substantial and ongoing” benefits from the Health and Human Services welfare program could be considered eligible for food stamps, said Brandon Lipps, acting deputy under secretary for food, nutrition and consumer services. The draft will propose a $50 cash  monthly TANF benefit for a household for six months as meeting the two requirements, although the department will ask the public to offer suggestions, Lipps said.

A person could still be eligible for SNAP if the individual receives noncash benefits such as subsidized employed, work support such as transportation and child care assistance, Lipps said.

“We remain committed to listening to and collaborating with our stakeholders to make these reforms as effective as possible,” he said.

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