National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: Food Stamps

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Suggested Citation:"Food Stamps." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
Page 326

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USE OF THE POVERTY MEASURE IN GOVERNMENT ASSISTANCE PROGRAMS 326 or benefits provided under certain federal programs as specified by law (e.g., Pell Grants) must be excluded. The intent of the option of tying income eligibility to the limits used by state or local health care agencies is to encourage coordination of WIC with health services and to simplify the administrative burden of determining eligibility (Food and Nutrition Service, 1988a). Food Stamps Households that receive AFDC or SSI, and so have already been through an eligibility determination process, are generally automatically eligible for food stamps. Other households can receive food stamps if they meet certain income and asset requirements. Because the program has a short (monthly) accounting period, it applies an asset test that is designed to screen out applicants who have savings and other liquid assets on which they can draw to cover a temporary period of low-income. The program also applies a gross and net income test that is similar in many respects to the proposed calculation of gross and disposable income for purposes of measuring poverty. Gross income for the Food Stamp Program includes all kinds of money income, with a few exceptions (e.g., the Earned Income Tax Credit [EITC] is not counted). Net income for households without an elderly or disabled member is gross income minus: a standard deduction that does not vary by household size and is adjusted for inflation each October ($131 a month in fiscal 1994); 20 percent of any earned income (to allow for taxes and work expenses); out-of- pocket dependent care expenses, when necessary for work or training, up to $200 per month for each dependent under age 2 and up to $175 for other dependents; and shelter expenses that exceed 50 percent of counted income after all other deductions up to a legislatively set ceiling ($231 a month as of July 1994). Net income for households with an elderly or disabled member is gross income minus: the standard, earned income, and dependent care deductions noted above; shelter expenses that exceed 50 percent of counted income after all other deductions, with no ceiling; and out-of-pocket medical care expenditures for the elderly or disabled member that exceed $35 a month.8 Gross and net income are compared with the current Department of Health and Human Services (HHS) poverty guideline appropriate for the family's size to determine eligibility. Households without elderly or disabled members must have gross monthly income below 130 percent of the HHS poverty guidelines and net monthly income below 100 percent of the poverty guidelines. Households with an elderly or disabled member need only meet the net income test. To determine benefits, a different cutoff is used because the Food Stamp Program is intended to supplement families' resources for food consumption 8 Different standard deductions and shelter expenses ceilings apply in Alaska and Hawaii.

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Measuring Poverty: A New Approach Get This Book
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Each year's poverty figures are anxiously awaited by policymakers, analysts, and the media. Yet questions are increasing about the 30-year-old measure as social and economic conditions change.

In Measuring Poverty a distinguished panel provides policymakers with an up-to-date evaluation of:

  • Concepts and procedures for deriving the poverty threshold, including adjustments for different family circumstances.
  • Definitions of family resources.
  • Procedures for annual updates of poverty measures.

The volume explores specific issues underlying the poverty measure, analyzes the likely effects of any changes on poverty rates, and discusses the impact on eligibility for public benefits. In supporting its recommendations the panel provides insightful recognition of the political and social dimensions of this key economic indicator.

Measuring Poverty will be important to government officials, policy analysts, statisticians, economists, researchers, and others involved in virtually all poverty and social welfare issues.

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