How Does the Social Security Cost-of-Living Adjustment (COLA) Impact Households’ SNAP Benefits?

How Does the Social Security Cost-of-Living Adjustment (COLA) Impact Households’ SNAP Benefits?

May 10, 2024
How Does the Social Security Cost-of-Living Adjustment
(COLA) Impact Households’ SNAP Benefits?
The Supplemental Nutrition Assistance Program (SNAP)
an average monthly benefit of $1,528 in December 2022.
increases the food purchasing power of eligible low-income
Approximately 57.8 million Social Security beneficiaries
households by helping them buy a nutritionally adequate
were age 60 or older.
low-cost diet. Many SNAP recipients also receive income
from other federal programs, including Social Security and
SSI
Supplemental Security Income (SSI). In the months prior to
SSA also administers SSI, a means-tested federal assistance
the pandemic in FY2020, approximately 31.8% of SNAP
program that provides monthly cash payments to older
households also received Social Security, and approximately
adults and individuals with qualifying disabilities who have
25.0% of SNAP households also received SSI.
income and resources (i.e., assets) within prescribed limits.
In December 2022, SSI provided average monthly federal
SNAP, Social Security, and SSI all have automatic
SSI payments of $601 to more than 7.5 million recipients.
adjustments to protect beneficiaries from the effects of price
Over 2.3 million SSI recipients were age 65 or older.
inflation. However, the timing and particular methods used
for these adjustments differ among the programs, which
SNAP Eligibility and Benefit Calculation
means annual cost-of-living adjustments (COLAs) for
Social Security and SSI can affect SNAP eligibility and
Eligibility
benefits. Policymakers may be interested in these programs’
SNAP has financial and non-financial rules for eligibility.
relationship, particularly in response to older Americans’
Its financial tests require that those eligible have monthly
concerns about changes to their SNAP benefits following
income—and, in some states, liquid assets—below limits
the automatic annual increases in their Social Security
set by law and adjusted for inflation. Income eligibility
benefits.
limits are set as percentages of the federal poverty
guidelines (commonly known as the federal poverty level,
This In Focus provides an overview of SNAP, Social
or FPL). The FPL is adjusted annually for inflation.
Security, and SSI and a discussion of how income from
Social Security and SSI can affect SNAP benefits. It then
SNAP also conveys categorical eligibility to households
outlines how Social Security and SNAP adjustments for
that already participate in specific means-tested programs,
cost of living differ in calculation and implementation.
including Temporary Assistance for Needy Families, SSI,
Program Summaries
or state general assistance cash benefits. A household must
still have net income below a level that results in a nonzero
SNAP
SNAP benefit.
SNAP, formerly called the Food Stamp Program, is a
Benefit Calculation
means-tested program administered by the U.S. Department
An eligible household receives a SNAP benefit based on
of Agriculture (USDA) Food and Nutrition Service in
the household’s size, its net (counted) monthly income, and
partnership with SNAP state agencies. Eligibility is based
the program’s “maximum monthly allotment” for that
on financial need, and eligible households must have
household size (with some adjustments for geography).
income below a certain dollar amount. Eligible households
Monthly benefit amounts are determined by subtracting
receive benefits (not the same as cash) loaded on to
30% of a household’s net or countable income from the
Electronic Benefits Transfer (EBT) cards that may be
“maximum monthly allotment.” The SNAP maximum
redeemed for eligible foods at eligible retailers. According
allotment is adjusted annually for increases in food prices.
to USDA administrative data, approximately 41.4 million
people received SNAP benefits in October 2023, and
SNAP Counts Social Security and SSI as
participants received an average monthly benefit of nearly
Income
$190 per person. In the months prior to the pandemic in
FY2020, approximately 28.6% of SNAP households
Household income in SNAP is defined as “all income from
included individuals 60 years of age or older.
whatever source,” excluding only specified forms of
income, such as income tax refunded and federal energy
Social Security
assistance (7 U.S.C. §2014(d)).
The Social Security Administration (SSA) administers
SNAP law does not explicitly exclude Social Security and
Social Security, a social insurance program that protects an
SSI from income and therefore implicitly includes them
insured worker and his or her eligible family members
when determining SNAP eligibility and benefits.
against a loss of income due to the worker’s retirement,
Accordingly, the annual increases to Social Security and
disability, or death. Nearly 66 million beneficiaries received
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How Does the Social Security Cost-of-Living Adjustment (COLA) Impact Households’ SNAP Benefits?
SSI may cause some individuals or households to lose
make up the TFP. As with the income eligibility limits, the
eligibility for or receive lower benefits from SNAP.
maximum monthly allotments are updated in October to
reflect this change.
How a specific SNAP household is impacted by a Social
Security COLA will vary by the household’s income and
SNAP also includes inflation adjustment for minimum
other characteristics. Households losing eligibility for
benefits, resources limits (i.e., assets), and certain
SNAP due to the annual Social Security COLA would be
deductions (measures used to calculated net income). All
relatively high-income SNAP households, with incomes
are effective October 1, the start of the federal fiscal year.
that may have been just below the current eligibility
thresholds before the COLA. For a household retaining
Comparison
SNAP eligibility but receiving a reduced monthly benefit,
In comparison with the Social Security COLA, adjustments
that reduction would be in an amount that is less than the
to SNAP to reflect price changes differ with respect to the
Social Security COLA. SNAP presumes that 30% of net
price indices used to measure inflation and the time periods
cash income is available for food, so SNAP benefits would
covered when measuring inflation as illustrated in Figure 1.
be reduced by at most 30% of the Social Security COLA.
The most noticeable difference, however, is when
COLAs in Social Security, SSI, and
adjustments are applied to benefits. USDA updates SNAP
SNAP
program criteria on October 1 each year, while the Social
Security and SSI increases are payable to beneficiaries
To compensate for the effects of rising prices (also called
beginning in January.
inflation), Social Security beneficiaries usually receive an
annual COLA which increases their benefits beginning with
Figure 1. Social Security and SNAP COLA Timelines
payments issued in January of each year. The same COLA
Il ustrated with 2022-2024 Dates
is applied to the SSI federal benefit rate (FBR), the
maximum monthly SSI payment amount. SNAP is also
adjusted for inflation but in different ways and with
different timing than Social Security and SSI. This helps to
explain why, though all three programs adjust for inflation,
they do not do so in a way that prevents the January Social
Security and SSI increases from impacting SNAP benefit
amounts or eligibility.
Social Security COLA
The Social Security COLA (also applied to the SSI FBR) is
based on changes in the Consumer Price Index for Urban
Wage Earners and Clerical Workers (CPI-W). The COLA
equals the growth, if any, in the index from the highest third
calendar quarter average CPI-W recorded (typically, from
the previous year) to the average CPI-W for the third
calendar quarter of the current year. Social Security
payments always reflect the benefits due for the preceding
month, so the COLA effective in December is payable in
January of the following year. The 3.2% December 2023
COLA was payable starting in January 2024.
SNAP COLAs

Source: CRS, using program laws and regulations.
SNAP adjusts for inflation using several different indices,
including adjustments for income eligibility thresholds and
Examples of Recent Legislative Proposals
maximum benefit amounts. Determining income eligibility
H.R. 5086 and S. 3806 are companion bills introduced in
uses a multiple (e.g., 130%, 200%) of the FPL as an
the 118th Congress that would amend SNAP’s treatment of
eligibility criterion. The FPL is updated each year by the
Social Security COLA income. This proposal was also
Department of Health and Human Services (HHS),
introduced in the House during the 116th and 117th
generally in January, to reflect price changes through the
Congresses.
most recent completed calendar year using the Consumer
Price Index for All Urban Consumers (CPI-U). In October,
CRS Reports for Additional Information
SNAP income eligibility limits are updated to reflect this
CRS Report R42505, Supplemental Nutrition Assistance
change.
Program (SNAP): A Primer on Eligibility and Benefits
The “
CRS Report 94-803, Social Security: Cost-of-Living
maximum monthly allotment” used to calculate
Adjustments
benefit levels for SNAP is also adjusted for food price
CRS Report R42035, Social Security Primer
changes. Maximum monthly allotments are tied to the cost
CRS Report R44948, Social Security Disability Insurance
of purchasing a nutritionally adequate low-cost diet, as
(SSDI) and Supplemental Security Income (SSI): Eligibility,
measured by USDA’s Thrifty Food Plan (TFP). Each June,
Benefits, and Financing
maximum allotments are adjusted for food price inflation
using the Consumer Price Index for the food items that
T. Lynn Sears, Analyst in Social Policy
https://crsreports.congress.gov

How Does the Social Security Cost-of-Living Adjustment (COLA) Impact Households’ SNAP Benefits?

IF12664
Randy Alison Aussenberg, Specialist in Nutrition
Assistance Policy

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