A proposed change to the federal food stamp program could cause tens of thousands of Illinois residents to lose their benefits if they have too much money saved up.
The U.S. Department of Agriculture is seeking to tighten eligibility rules for the Supplemental Nutrition Assistance Program, commonly called SNAP, to achieve consistency among states and ensure benefits go to those who need them most. It estimates the changes would save $2.5 billion a year.
But advocates for the poor say tightened eligibility rules would mostly affect working families who struggle to make ends meet and elderly people with savings, and kick thousands of children off free school meal programs.
Here’s what is being proposed and the potential impact on Illinois, where some 1.8 million people receive food stamps.
How would eligibility be tightened?
USDA’s proposed rule change targets a process called categorical eligibility, which allows households to automatically qualify for SNAP if they already qualify for other welfare programs. In Illinois, those who receive SNAP through categorical eligibility can have annual gross earnings up to 165% of the federal poverty line or $35,194 for a family of three, as long as their expenses bring their net income to the poverty line, which is $21,330. Their savings and assets are not taken into account.
But USDA says some states have broadened their categorical eligibility rules too much, and it wants to rein them in. As an example, USDA says some states allow people to be deemed categorically eligible for SNAP when they have only received a brochure about welfare programs.
To tighten the standards, USDA is seeking to limit automatic SNAP eligibility to households that receive welfare benefits valued at more than $50 a month for at least six months. Many Illinois residents who don’t get that level of benefits would lose categorical eligibility and be subject to regular federal income and asset limits.
The federal income limit for SNAP is 130% of the federal poverty line, which for a family of three totals gross earnings of $27,729 a year. The asset limit is no more than $3,500 in savings for households that include an elderly or disabled person, and no more than $2,250 for other households.
How many people would lose benefits?
The USDA says 3.1 million food stamp recipients nationwide, or about 8% of the total, would no longer be eligible for SNAP under the new rules.
Illinois officials were not able to provide local impact numbers. But according to 2016 USDA data, about 8.6% of Illinois households receiving food stamps would not meet the federal income or asset tests. As of April there were more than 900,000 SNAP households in Illinois, so if that rate has remained consistent more than 77,000 households in the state could lose benefits.
Who would fail the income or asset tests?
Elderly people and working families would be disproportionately affected. About 13.2 percent of SNAP households with an elderly person would lose benefits, as would 12.5 percent of households with earnings, according to the USDA.
Nolan Downey, staff attorney at the Shriver Center on Poverty Law, said many low-income working families who struggle to make ends meet would no longer be eligible because they earn above the federal threshold.
“A family of three would be ineligible if they made a mere $2,310 a month regardless of how much of that income is dedicated to housing costs or child care, which are both exceedingly expensive in Chicago,” Downey said. “Seniors and those struggling with a disability would also be adversely impacted because any money they have set aside in their bank account for medical or other emergent expenses would be counted against them.”
Many people would fail the asset test, which primarily measures savings in the bank, because they have set too much money aside. Homes and retirement savings don’t count.
Diane Doherty, executive director of the Illinois Hunger Coalition, said penalizing people for saving money is counterproductive.
“It really is a disincentive for people to get to a point of financial stability,” she said.
Would kids lose free school lunches?
Children in households that receive SNAP are automatically eligible for free school lunches, so if the household loses SNAP the child loses access to a free lunch. The nonpartisan Congressional Budget Office, in an analysis last year, estimated that limiting categorical eligibility of SNAP recipients would cause 265,000 children to lose access to free school meals.
Kids could still apply for free or reduced-price school meals, but it adds an administrative burden on families and many might not do it, said Sophie Milam, senior director of public policy at the Greater Chicago Food Depository.
How would changes affect paperwork?
For Illinois, which has struggled with delays in processing SNAP applications, the state is concerned about how it would manage additional paperwork to verify people’s assets.
“It would slow down the processing of urgent applications submitted by vulnerable people confronted with hunger and poverty,” said a statement from Meghan Powers, spokeswoman for the Illinois Department of Human Services, which administers SNAP in the state.
“Imposing new administrative hurdles will also reverse the immense progress Illinois has recently made in processing SNAP applications in a timely manner.”
Illinois is under a federal corrective action plan to decrease the processing times of SNAP applications, which has been a longstanding problem in Illinois that got worse as it rolled out a new computer system meant to improve efficiency. Illinois in January processed 63 percent of food stamp applications on time, which means within 30 days, but has improved the timeliness rate to 89 percent, according to DHS. The USDA has told the state it needs to get that rate to over 90 percent by November and to 95 percent by May.
What happens now?
The proposed rule is subject to a 60-day public comment period, which began Wednesday and ends Sept. 23. The USDA must review all the comments before issuing a final rule.