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Tuesday, September 24, 2013

The Supplemental Nutrition Assistance Program: Categorical Eligibility

Gene Falk
Specialist in Social Policy

Randy Alison Aussenberg
Analyst in Nutrition Assistance Policy

The Supplemental Nutrition Assistance Program (SNAP) provides benefits to low-income, eligible households on an electronic benefit transfer (EBT) card; benefits can then be exchanged for foods at authorized retailers. SNAP reaches a large share of low-income households. In June 2013, there were 47.7 million persons in 23.1 million households benefitting from SNAP. Federal SNAP law provides two basic pathways for financial eligibility to the program: (1) meeting program-specific federal eligibility requirements; or (2) being automatically or “categorically” eligible for SNAP based on being eligible for or receiving benefits from other specified low-income assistance programs. Categorical eligibility eliminated the requirement that households who already met financial eligibility rules in one specified low-income program go through another financial eligibility determination in SNAP.

In its traditional form, categorical eligibility conveys SNAP eligibility based on household receipt of cash assistance from Supplemental Security Income (SSI), the Temporary Assistance for Needy Families (TANF) block grant, or state-run General Assistance (GA) programs. However, since the 1996 welfare reform law, states have been able to expand categorical eligibility beyond its traditional bounds. That law created TANF to replace the Aid to Families with Dependent Children (AFDC) program, which was a traditional cash assistance program. TANF is a broadpurpose block grant that finances a wide range of social and human services. TANF gives states flexibility in meeting its goals, resulting in a wide variation of benefits and services offered among the states. SNAP allows states to convey categorical eligibility based on receipt of a TANF “benefit,” not just TANF cash welfare. This provides states with the ability to convey categorical eligibility based on a wide range of benefits and services. TANF benefits other than cash assistance typically are available to a broader range of households and at higher levels of income than are TANF cash assistance benefits.

As of October 1, 2012, 43 jurisdictions have implemented what the U.S. Department of Agriculture (USDA) has called “broad-based” categorical eligibility. These jurisdictions generally make all households with incomes below a state-determined income threshold eligible for SNAP. States do this by providing households with a low-cost TANF-funded benefit or service such as a brochure or referral to an “800” number telephone hotline. There are varying income eligibility thresholds within states that convey “broad-based” categorical eligibility, though no state has a gross income limit above 200% of the federal poverty guidelines. In all but five of these jurisdictions, there is no asset test required for SNAP eligibility. Categorically eligible families bypass the regular SNAP asset limits. However, their net incomes (income after deductions for expenses) must still be low enough to qualify for a SNAP benefit. That is, it is possible to be categorically eligible for SNAP but have net income too high to actually receive a benefit. The exception to this is one- or two-person households that would still receive the minimum benefit.

The omnibus “farm bill” approved by the Senate on June 10, 2013 (S. 954), reauthorizes and makes certain changes to SNAP, but does not make changes affecting categorical eligibility. On the other hand, H.R. 3102 (the “Nutrition Reform and Work Opportunity Act of 2013”), which is pending in the House, would restrict SNAP categorical eligibility to only those households receiving need-tested cash assistance (the traditional form of categorical eligibility), ending the state option to have “broad-based” categorical eligibility The Congressional Budget Office (CBO) estimates that an average of 1.2 million persons per year would lose eligibility because of the categorical eligibility restrictions in H.R. 3102 over the next 10 years; it would also result in
budget savings of $11.4 billion over the 5 years from FY2014 to FY2018, and $19.0 billion over the 10 years from FY2014 to FY2023. 

Date of Report: September 17, 2013
Number of Pages: 23
Order Number: R42054
Price: $29.95

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