Monday, June 15, 2009

Odd food stamp policy story

The income cutoffs and benefit formula for the SNAP (food stamp) program are not as crazy as you sometimes read.

The AP's Matt Apuzzo today tells the sad story of Georgia resident Mark Milota, whose $25 increase in monthly unemployment benefits put him over the income cutoff for the SNAP program (food stamp benefits).
The Georgia Department of Human Resources explained in a letter to him last month that, because of the stimulus, he was ineligible for food stamps. He now makes $1,538 a month — $21 too much for a family of two to qualify.

"We have to pay him that $25 a week," said Brenda Brown, assistant commissioner at the Georgia Department of Labor. "And he doesn't have the option not to accept it."

Milota said he was told that, without the stimulus money, he would have received about $300 a month in food stamps.
The Consumerist picks up the "government shoots itself in foot" story line. The commenters are outraged and have a great suggestion:
The REAL problem here is that government programs like food stamps have "hard cutoffs". Instead, they should have "graduated reduction". The way this can work is that for every $3 over a certain amount, the program benefit is reduced by $1. If this were applied to Mark Milota's case, then for being over the level by $21, his food stamps would be reduced by only $7.
The funny thing is that this is how the SNAP benefit formula already works. The poorest participants get the maximum benefit. People close to the income cutoff generally get a smaller benefit.

The story about Mr. Milota seems odd. I wonder if Mr. Apuzzo got the details wrong or quoted Mr. Milota overstating the situation.

The income cutoff for a family of two is indeed $1517, so if Mr. Milota started with $1513 monthly, it makes sense that his extra $25 monthly would make him ineligible. But, I have trouble seeing how he could have lost $300 monthly in food stamp benefits in this situation.

The eligibility rules give Mr. Milota a maximum monthly benefit ($367 monthly) minus 30% of his net income after deductions. The deductions, subtracted from his income, include a standard deduction ($144), an excess shelter deduction (probably a couple hundred dollars and at most about $400, I think), and some other deductions that are typically smaller. Unless his is a very unusual case, with much higher deductions than that, he had several hundred dollars in net income. I would be surprised if the $25 in new unemployment benefits caused a net loss for Mr. Milota. If he did have a net loss, I'd be still more surprised if it were $300. It seems more likely that somebody looked up and misunderstood the rules, thinking that Mr. Milota would be eligible for the maximum benefit despite having monthly income substantially greater than the federal poverty standard.

I don't think that yet more complex stimulus package legislation, anticipating every obscure boundary case in food stamp eligibility rules, would have been wise policy making. The "government gone bad" story line seems misplaced here.

Thanks to Jack at Fork & Bottle for pointing me toward this story.

Update (6/23/2009): Corroborating the gist of this post, the Center on Budget and Policy Priorities estimates that only perhaps 1/3 of 1% of unemployment insurance recipients might have been disadvantaged by the stimulus benefits.


Aliza said...

Is it possible that some states might be supplementing people so that everyone (or more people) receive the maximum benefit, even those who wouldn't qualify federally (but qualify for some level of SNAP)?

Elizabeth said...

I was trying to figure this one out too. The only way I can make sense of it is that if the $25 pushed him over the gross income limit, but he had really high deductions so that his net income was significantly below the cut-off.

Although your explanation -- that the reporter got it wrong -- is probably more likely.

Elizabeth said...

I checked with a couple of experts, and they both agreed that it's quite possible -- the benefit calculation includes disregards for housing, child care, child support and medical expenses, so it's possible to be getting a significant benefit even as your gross income approaches the threshold.

States can use the categorical eligibility provisions to waive the gross income limit for most families by providing them with a TANF-funded service, but Georgia clearly isn't doing so.

Imee said...
This comment has been removed by a blog administrator.
M.A. said...

Ohh no! It's NOT a mistake. And net income is not the benchmark in all states. I've got the same problem in New York. $21 over the line for GROSS INCOME. That's what they go by. They gave me $100 and took away $200 in Food Stamps. My rent just went up too. I have $50 a month to buy groceries in NYC. I was told to write to my congressman. It's STUPID! Their minions just forward all the complaints to Food Stamps. Then they write to you and tell you, "too bad, write to your congressman." It wasn't too hard to make sure the $300 and $600 checks we all got from Bush didn't get taxed AFTER they were sent out. It shouldn't be THAT HARD to make it so this emergency assistance does not affect eligibility for government-run programs. It doesn't even seem legal to do what they are doing. The Georgia man and I are hardly alone, either.

Anonymous said...

I can believe ANY screwed up thing that Georgia does. Trust me. I live in Georgia and it has taken me since April to get approved for Food Stamps (which I hope will be arriving in the next week or so)... my elderly father lived with me, so they denied ME based on his Social Security earnings (which go to pay the mortgage...) I have been unemployed for over a year, and am at the time temporarily disabled for health reasons. Our DFCS system here is one of the most screwed up in the country. My caseworker is a complete ditz (which is WHY it has taken me this long...)... so yeah - if they deny him over something so stupid - I can DEFINTELY believe it. I am living the nightmare. I've seen it up close in action (or LACK of action.)

Anonymous said...

The Center on Budget Blah Blah Blah is full of it! On WHAT DATA do they base their spin? Methinks they made up their "estimate" from thin air! when in doubt, LIE. LIE. LIE.

But now that the 2009 FPLs are finally accepted by Food Stamps, (10/01/09) there will be some relief and those who got kicked off might be able to get them again. Time to go and re-apply