The Supplemental Nutrition Assistance Program (SNAP): Categorical Eligibility

Contents

• Introduction
• Regular and Categorical Eligibility for SNAP
• Eligibility through Meeting Federal Income and Resource Tests
• Categorical Eligibility
• Early History
• The 1996 Welfare Law and TANF
• What TANF Means for Categorical Eligibility
• Traditional, Narrow, and Broad-Based Categorical Eligibility
• Scope and Reach of Categorical Eligibility
• "Broad-Based" Categorical Eligibility Practices
• Incomes and Assets of SNAP Households
• Income
• Assets

Summary

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 FY2015, a monthly average of 45.8 million persons in 22.4 million households participated in 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 broad-purpose 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 December 2014, 42 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 Agriculture Act of 2014 (the "2014 Farm Bill," P.L. 113-79) made no changes to SNAP categorical eligibility rules. The House-passed version of the bill that became the 2014 Farm Bill would have eliminated broad-based categorical eligibility, but that change was not included in the conference agreement on the bill.

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The Supplemental Nutrition Assistance Program (SNAP): Categorical Eligibility

Introduction

The Supplemental Nutrition Assistance Program (SNAP) provided food assistance to a monthly average of 45.8 million people in 22.4 million households in FY2015. Total benefit costs were $69.7 billion in FY2015.

SNAP participation and costs increased markedly from FY2007 to FY2013, mostly as a result of automatic and legislated responses to the recession.¹ In FY2014, both participation and costs declined from peak FY2013 levels. While much of the FY2007 to FY2013 increase in participation and costs is attributable to the poor economy, states during this period also increasingly adopted more expansive "categorical eligibility" rules—a set of policies that make a SNAP applicant eligible based on the applicant's involvement with other low-income assistance programs: benefits from the Temporary Assistance for Needy Families (TANF) block grant, Supplemental Security Income (SSI), and state-financed General Assistance (GA) programs. This report discusses categorical eligibility and some of the issues raised by it. It first describes the three different types of categorical eligibility: traditional categorical eligibility conveyed through receipt of need-based cash assistance, and the newer "narrow" and "broad-based" categorical eligibilities conveyed via TANF "noncash" benefits. It also provides recent information on current state practices with regard to categorical eligibility. Finally, the report discusses proposals to restrict categorical eligibility.

The Agriculture Act of 2014 (the "2014 Farm Bill," P.L. 113-79) made no changes to SNAP categorical eligibility rules. The House-passed version of the bill that became the 2014 Farm Bill would have eliminated "narrow" and "broad-based categorical eligibility," retaining only "traditional" categorical eligibility for recipients of cash assistance. However, the House-passed provision was not included in the conference agreement on the bill.

Regular and Categorical Eligibility for SNAP

Federal law provides the basic eligibility rules for SNAP. There are two basic pathways to gain financial eligibility for SNAP: (1) having income and resources below specified levels set out in federal SNAP law; and (2) being "categorically," or automatically, eligible based on receiving benefits from other specified low-income assistance programs.

Eligibility through Meeting Federal Income and Resource Tests

Under the regular federal rules, SNAP provides eligibility to households based on low income and limited assets. Households must have net income (income after specified deductions) below 100% of the federal poverty guidelines. In addition, federal rules provide that households without an elderly or disabled² member must have gross income (income before deductions) below 130% of the federal poverty guidelines (see Table A-1).

Additionally, the regular eligibility rules provide that a household must have liquid assets below a specified level. Under federal rules in FY2016, a household's liquid assets must also be below $2,250, and below $3,250 in the case of households with an elderly or disabled member. The value of the home is excluded from this "assets test," as are certain other forms of assets (e.g., retirement and educational savings).

Further, a portion of the value of a household's vehicles is not counted toward the asset limit (up to $4,650 of the fair market value of a household's vehicles). However, federal law gives states the option to further exclude the value of vehicles from being counted toward the asset limit. States may elect to use the exclusion applicable for TANF assistance in their SNAP program. Under TANF, many states fully exclude the value of one vehicle. This option is distinct from categorical eligibility.

Categorical Eligibility

Federal law also makes households in which all members are either eligible for or receive benefits from TANF, Supplemental Security Income (SSI), or state-financed GA programs categorically, or automatically, eligible for SNAP.³ These households, who have already gone through eligibility determination for those programs, bypass the income and resource tests discussed above and are deemed financially eligible.⁴ They then have their SNAP benefits determined.

Categorically eligible households have their SNAP benefits determined under the same rules as other households. A household's SNAP benefit amount is based on the maximum benefit (which varies by household size) and its net countable income after deductions for certain expenses. While the household may be categorically eligible, its net income may be too high to actually receive a SNAP benefit. The exception is that all eligible households consisting of one or two persons are eligible for at least the minimum monthly benefit, set at $16 in the 48 contiguous states and the District of Columbia for FY2016.

Early History

Special rules providing for expedited eligibility of cash assistance recipients date back to amendments to the Food Stamp program enacted in 1971.⁵ These rules were eliminated in the rewrite of food stamp law enacted in 1977, but they were reinstated in phases during the early 1980s through 1990.⁶ Categorical eligibility was seen as advancing the goals of simplifying administration, easing entry to the program for eligible households, emphasizing coordination among low-income assistance programs, and reducing the potential for errors in establishing eligibility for benefits.⁷ The Food Security Act of 1985 conveyed categorical eligibility to all households receiving cash aid from Aid to Families with Dependent Children (AFDC), SSI, or state-run GA programs. These programs had their own income and resource tests (often more stringent than food stamp tests), so subjecting a household to a separate set of income and resource tests for food stamps could be seen as redundant and inefficient.

The 1996 Welfare Law and TANF

The current form of categorical eligibility resulted from the 1996 welfare reform law (the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193). That law ended AFDC, replacing it with TANF. AFDC was a traditional cash assistance program. Within some federal rules, states set AFDC eligibility and benefit amounts, but federal law established it as a cash welfare program. AFDC eligibility rules were generally more restrictive than those for food stamps, and most AFDC families also received a substantial food stamp benefit.

TANF, on the other hand, is a broad-purpose block grant that gives states broad flexibility to expend funds. The statutory purpose of TANF is to increase state flexibility to achieve four policy goals:⁸

• 1. provide assistance to needy families so that children can be cared for in their own homes or in the homes of their relatives;
• 2. end dependence by needy parents on government benefits through promoting work, job preparation, and marriage;
• 3. reduce the incidence of out-of-wedlock pregnancies; and
• 4. promote the formation and maintenance of two-parent families.

States may expend TANF funds and associated state funds (called Maintenance of Effort or MOE funds) in any manner "reasonably calculated"⁹ to achieve the TANF purpose, providing broad authority for the types of activities that may be funded. These activities include the traditional cash assistance programs—which convey traditional categorical eligibility.¹⁰ However, in FY2013 traditional cash welfare accounted for only 28% of all expenditures from the TANF block grant and MOE funds.

TANF funds a wide range of other benefits and services that seek to ameliorate the effects, or address the root causes, of child poverty. TANF benefits and services to achieve the first two goals of TANF (provide assistance, end dependence of needy parents on government benefits) must be for needy families with children. These benefits or services are need-tested, though states determine their own income thresholds. These benefits are often available to families at higher levels of income than is cash assistance, often a multiple of the federal poverty threshold, and without an asset test.

Moreover, TANF services directed at the third and fourth goals shown above can be for any person in a state; that is, TANF services to reduce out-of-wedlock pregnancies or promote two-parent families are not restricted to families with children. These benefits and services are potentially available to a state's entire population. Federal rules also do not require that they be need-tested benefits and services.

What TANF Means for Categorical Eligibility

The 1996 welfare reform law did not substantively change SNAP law with respect to categorical eligibility. Rather, it simply replaced the reference to AFDC with one to TANF in the section of law that conveys categorical eligibility. As discussed above, TANF gives states much broader authority than they had under AFDC to offer different types of benefits and services. This expansion of authority under TANF had major implications for categorical eligibility, allowing states to convey categorical eligibility based on receipt of a wide range of human services rather than simply cash welfare.

U.S. Department of Agriculture (USDA) regulations issued in 2000 provide rules for which noncash or in-kind TANF or MOE-funded benefits or services can be used to convey SNAP categorical eligibility.¹¹ The regulations require that states make categorically eligible for SNAP

• households in which all members receive or are authorized to receive¹² cash assistance funded by TANF or MOE dollars; and
• households in which all members receive or are authorized to receive noncash aid funded at least 50% by TANF or MOE dollars.

The regulations imposed one restriction on states in conveying categorical eligibility: if the TANF- or MOE-funded benefit or service was aimed at achieving TANF goals three (reducing out-of-wedlock pregnancies) or four (promoting two-parent families), the state would have to choose a program with an income limit of no more than 200% of the federal poverty guideline for conveying categorical eligibility.

Additionally, subject to the 200% of poverty restriction discussed above, the regulations give states the option of making categorically eligible for SNAP

• households in which all members receive or are authorized to receive noncash assistance funded less than 50% by TANF or MOE dollars; and
• households in which at least one member receives or is authorized to receive noncash aid funded at least partially by TANF or MOE dollars, but the state agency determines the whole household benefits from such noncash aid.

Traditional, Narrow, and Broad-Based Categorical Eligibility

As discussed, in instances of categorical eligibility, SNAP applicants can be found eligible for SNAP based on their receipt of benefit from other specified means-tested programs.¹³ At minimum, households that receive Temporary Assistance for Needy Families (TANF) cash assistance, Supplemental Security Income (SSI), or state-funded general assistance cash benefits must be found categorically eligible for SNAP. However, the 1996 welfare reform law's creation of TANF as a broad-based block grant has allowed for a state option to include a long list of benefits/services that can convey SNAP eligibility. This section discusses state choices in this area as of December 2014.

Scope and Reach of Categorical Eligibility

The current status of SNAP categorical eligibility is the product of state choices. At minimum, a state must implement "traditional" categorical eligibility, but some states allow additional programs and benefits to convey categorical eligibility. The USDA has developed a typology of state practices on categorical eligibility, categorizing states into three groups:

• Traditional categorical eligibility only. In its traditional form, a household where all members receive need-tested cash aid from SSI, GA, or TANF is automatically made eligible for SNAP as well. These households have already met the income and (in general) resource test for cash aid. Note that states set income and asset eligibility rules for TANF and GA (see Table A-2 for maximum earnings possible for entry to TANF cash assistance in July 2012). SSI provides a federal income floor based on federal rules for the needy who are aged, blind, or disabled. However, states may supplement SSI with their own funds, leading to state variation in SSI eligibility as well. Based on the most current information available, only six states currently convey only traditional categorical eligibility.
• "Narrow" categorical eligibility. These states have expanded categorical eligibility beyond just traditional categorical eligibility, but in a way to limit the number of households made eligible for SNAP. These states convey categorical eligibility through receipt of cash and certain TANF noncash benefits, such as child care and counseling. Based on the most current information available, only five states have "narrow" categorical eligibility policies.
• "Broad-based" categorical eligibility. These states have expanded categorical eligibility in ways that make most, if not all, households with low incomes in a state categorically eligible for SNAP. States could make all low-income households in a state—including those without children—eligible for a TANF-funded service directed at either the reducing out-of-wedlock pregnancies or promoting two-parent families goals of TANF. If a state opted to do so, any low-income household (under 200% of poverty, per regulation) could either receive, or be authorized to receive, such a TANF-funded service. Based on the currently available information, 39 states, the District of Columbia, Guam, and the Virgin Islands have broad-based categorical eligibility policies.

Figure 1 displays a map categorizing states and territories by these three categories.

Figure 1. Scope of SNAP Categorical Eligibility by State

Source: Congressional Research Service (CRS), based on data from the U.S. Department of Agriculture, as of January 2016.

"Broad-Based" Categorical Eligibility Practices

Broad-based categorical eligibility is a policy that makes most households with incomes below a certain threshold categorically eligible for SNAP. Typically, households are made categorically eligible through receiving or being authorized to receive a minimal TANF- or MOE-funded benefit or service, such as being given a brochure or being referred to a social services "800" telephone number (see Table 1). Recalling the USDA regulation, the brochure or telephone number must be funded with TANF or MOE dollars and thus must be directed at a TANF purpose.¹⁴

States have increasingly availed themselves of the option to use broad-based categorical eligibility to expand and ease access to SNAP eligibility. The Department of Agriculture reports that, as of January 2016, 42 jurisdictions operated broad-based categorical eligibility to make most or all households in their state with whom the state welfare office comes in contact SNAP eligible.

Table 1 shows the use of SNAP broad-based categorical eligibility by state as of January 2016. Of the 42 jurisdictions using broad-based categorical eligibility,

• 40 make all family types eligible (New Hampshire restricted broad-based categorical eligibility to families with children; New York restricted broad-based categorical eligibility to households with dependent care expenses);
• 37 currently have no asset test. Note, though, currently in 13 jurisdictions, households with an elderly and disabled member with incomes in excess of 200% of the federal poverty guidelines have to meet the regular SNAP asset tests of $3,250 for households of that type);
• 5 states (Texas, Maine, Michigan, Nebraska, and Idaho, and Pennsylvania) apply an asset test for all households); and
• 31 have a gross income limit above 130% of the federal poverty guidelines.

According to USDA policy and guidance, there is a general way that a state would administer broad-based categorical eligibility for a SNAP applicant. The local SNAP office would collect basic income information on the applicant; if the applicant's income is below the limit specified, then the state office would administer, or determine whether a member of the household was authorized to receive, a relatively nominal TANF-funded benefit or service. Receipt of this TANF benefit or service then constitutes SNAP eligibility through broad-based categorical eligibility. (As discussed above, it is still possible to be categorically eligible but receive no benefit because net income is too high.)

As an illustration, in the case of the District of Columbia, as shown in the table, if the applicant's gross income is below 200% of poverty, the applicant would then receive a particular brochure for a program that is TANF-funded and would then be eligible for SNAP through the broad-based categorical eligibility pathway.

Incomes and Assets of SNAP Households

Income

Because broad-based categorical eligibility conveys SNAP to households with gross incomes as high as 200% of poverty, there is concern that it could be unduly expanding the program. However, broad-based categorical eligibility has not resulted in large numbers of households receiving SNAP who have gross incomes, as measured using SNAP income counting rules, exceeding 130% of poverty.¹⁵ Table 2 shows that in FY2014, a monthly average of 3.3% of all households without an elderly or disabled member had incomes above 130% of poverty. (As mentioned above, households with an elderly or disabled member are not subject to the 130% of poverty gross income limit under regular federal eligibility rules.)

Table 3 shows both the number and percent of households without an elderly or disabled member that have incomes above 130% of poverty by state.¹⁶ Note that tabulations in Table 2 and Table 3 reflect states' SNAP households under states' broad-based categorical eligibility practices in place during FY2014. Some states' current practices are different from their practices in FY2014, so tabulations here do not necessarily reflect current state practices. For instance, California had a gross income limit of 130% of poverty in place in through the first three quarters of FY2014, and in July 2014 raised the gross income limit to 200% of poverty.

Assets

As discussed above, broad-based categorical eligibility also eliminates the SNAP asset test in many states. Since states that do not administer an asset test generally do not collect data on the assets of SNAP households, it is not possible to determine the extent to which broad-based categorical eligibility has resulted in households with assets above the usual SNAP limit receiving benefits.

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Footnotes

1.	See Congressional Budget Office, The Supplemental Nutrition Assistance Program, April 2012, http://www.cbo.gov/sites/default/files/cbofiles/attachments/04-19-SNAP.pdf.
2.	"Elderly or disabled" is defined in Section 3(j) of the Food and Nutrition Act of 2008.
3.	Section 5(a) of the Food and Nutrition Act of 2008.
4.	Additionally, federal law also provides a separate rule for households where some, but not all, members receive benefits from TANF or SSI. In such households, recipients of TANF or SSI benefits are deemed to have passed the SNAP resource test. That is, the assets of household members who receive TANF, SSI, or GA are disregarded from the household's total resources when determining whether the household passes the asset test (Section 5(j) of the Food and Nutrition Act of 2008).
5.	Section 6 of P.L. 91-671.
6.	The Omnibus Budget Reconciliation Act of 1982 (P.L. 97-253) provided that a household in which all members received Aid to Families with Dependent Children (AFDC) cash assistance bypass the Food Stamp asset test (but not the income eligibility test). The Food Security Act of 1985 (P.L. 99-198) provided that households in which all members received AFDC or SSI would be automatically eligible for Food Stamps, bypassing both the income and asset tests. P.L. 99-198 made this a temporary provision that would sunset at the end of FY1998. P.L. 100-435 eliminated the sunset, making categorical eligibility a permanent feature of Food Stamp law. Categorical eligibility was extended to recipients of state-run GA programs in 1990, enacted as part of P.L. 101-624.
7.	U.S. Congress, House Committee on Agriculture, report to accompany H.R. 2100, 99th Cong., 1st sess., September 13, 1985, H.Rept. 99-271, Part 1 (Washington: GPO, 1985), p. 142.
8.	Section 401(a) of the Social Security Act.
9.	Section 404(a)(1) of the Social Security Act.
10.	In regulations promulgated after the 1996 welfare law, the Department of Health and Human Services (HHS) divided TANF- and MOE-funded activities into two categories: (1) assistance, and (2) everything else. The regulations defined assistance generally as representing the traditional cash assistance programs ("basic assistance") and transportation or child care aid for nonworking persons.
11.	The regulations are at 7 C.F.R. 273.2(j). See discussion of the final rule at U.S. Department of Agriculture, Food and Nutrition Service, "Food Stamp Program: Noncitizen Eligibility, and Certification Provisions of P.L. 104-193, as Amended by Public Laws 104-208, 105-33, and 105-185," 65 Federal Register 70159-70161, November 21, 2000.
12.	The regulations also provide that a family is categorically eligible if they either receive a TANF- or MOE-funded benefit or if they are "authorized" to receive such a benefit. "Authorized" to receive a benefit means that they have been determined eligible and have been informed as such; they do not need to actually be receiving benefits.
13.	See 7 U.S.C. 2014(a).
14.	For a discussion of state practices regarding "broad-based" categorical eligibility, see U.S. Government Accountability Office, Supplemental Nutrition Assistance Program: Improved Oversight of State Eligibility Expansions Needed, GAO-12-670, July 2012.
15.	This is based on data from the SNAP Quality Control Data files. These are administrative data, and the files include monthly income data collected in determining SNAP eligibility and benefits. The data and the resulting analysis differ in a number of ways from that of Census Bureau household survey income data of SNAP households. SNAP monthly income data represents gross income as defined in SNAP law; this might exclude some income reported by households in the Census survey. Moreover, SNAP eligibility and benefits are based on monthly income. The most widely reported income data from Census household surveys examines annual income. Households may use the SNAP program in particular months of economic need, which annual income data would not capture. There are also differences between the SNAP and Census Bureau concepts of household and poverty thresholds.
16.	Some states that have gross income limits of 130% of poverty report a small number of households without an elderly or disabled member as having incomes above 130% of poverty. This is likely because of limitation on the Quality Control Data File in identifying disabled individuals. The information on the Quality Control Data File sometimes fails to categorize a household with a disabled member. Therefore, some households classified in this table as "without an elderly or disabled member" may in fact contain a disabled person.