Supplemental Nutrition Assistance Program Examining the Evidence to Define Benefit Adequacy (2013) / Chapter Skim
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5 Impact of Program Design on Allotment Adequacy
5 Impact of Program Design on Allotment Adequacy
Pages 147-174
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From page 147... ...
Additionally, the committee reviewed evidence on such factors as the geographic adjustment of benefits and the timing of benefit updating and receipt that can have either a direct or indirect impact on the benefit formula and thus on allotment adequacy, as well as factors that influence the types of foods purchased with SNAP benefits, including dietary knowledge, preferences, and cultural influences. Factors such as nutrition education and incentives and restrictions on benefit usage, as well as information on retail food outlets, also are considered because they provide a more complete picture of how SNAP benefits are used and the possible implications for the adequacy of SNAP allotments.
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From page 148... ...
Maximum Benefit Guarantee Entitlement to SNAP benefits is derived from the cost of the Thrifty Food Plan (TFP) for a family of four.
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From page 149... ...
Therefore, the cost of food under the TFP also varies by these characteristics, with lower levels for the elderly and young children. Instead of being adjusted to meet each household's individual characteristics, the SNAP benefit amount is set for a representative "reference family," allocating all households of a certain size the same benefit even if their individual characteristics (age, sex, activity level)
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From page 150... ...
The current monthly individual food expenses for the reference family are shown in Table 5-1. The reference family's food expenditures come to $612.00 per month, and this amount is used to set the maximum benefit, which is then adjusted by the economies-of-scale multipliers to account for different family sizes.
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From page 151... ...
The maximum benefit is adjusted each October based on the Consumer Price Indexes (CPIs) for the 29 food categories in the TFP that have a corresponding CPI or set of CPIs for each age-sex group (Carlson et al., 2007)
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From page 152... ...
. The authors found that families receiving the maximum SNAP benefit needed to spend an additional $2,520 in Boston and $3,165 in Philadelphia per year to purchase foods that meet the TFP guidelines, or roughly 40 to 50 percent more than the maximum annual benefit amount of $6,504 for a four-person family in fiscal year (FY)
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From page 153... ...
In 2012, the benefit level for a four-person household remains at $668 per month, while the TFP for this category is set at $611.70, resulting in a $56 difference per month. Regional differences in food prices discussed above, coupled with a number of food access challenges and reduced food insecurity attributed to the ARRA expansion, have led some stakeholders to call for permanent increases in the TFP or for the maximum benefit to be linked to another USDA food plan, such as the Low-Cost Food Plan (Children's HealthWatch, 2012; FRAC, 2012)
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From page 154... ...
, suggesting that SNAP is the primary source of food support for a large fraction of the caseload. Benefit Reduction Rate As described in Chapter 2, SNAP benefits are calculated as the difference between the maximum benefit guarantee for a given unit size and 30 percent of the unit's net income (see Box 5-2)
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From page 155... ...
= G/BRR + D, where G is the maximum benefit, BRR is the benefit reduction rate, and D is deductions and exemptions used in constructing net income Y(n)
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From page 156... ...
Given this trade-off, the earned income deduction at its current level may reduce the overall purchasing power of the SNAP allotment, especially for those facing time constraints such as households headed by a working single mother. Employment among single mothers accelerated with the reforms of the 1990s toward a more workbased safety net, notably the expansions of the earned income tax credit that increased the reward for working and the 1996 Welfare Reform Act,6 6 Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Public Law 104-193 (August 22, 1996)
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From page 157... ...
The American Housing Survey was updated in 2007; however, the committee is not aware of updates to this study. Because geographic variation is so great within rather than among regions and states, the shelter deduction and the other individualized deductions are one way to account in part for geographic price differences.
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From page 158... ...
That is, a $1.00 increase in the standard deduction raises benefits by $0.30 for those without an excess shelter deduction, but raises them by $0.45 for those who also have the shelter deduction but are below the shelter cap. Geographic Adjustment of SNAP Benefits In addition to the adjustment to the maximum benefit for residents of Alaska and Hawaii, several aspects of the current SNAP benefit formula directly or indirectly accommodate differences in cost of living across regions of the country.
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From page 159... ...
would be the product of the price index (Pit) and the federal maximum benefit guarantee (G)
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From page 160... ...
is likely to be infeasible until further progress is made on regional price indices. Timing of Benefits SNAP benefits are deposited onto an Electronic Benefit Transfer (EBT)
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From page 161... ...
These factors -- incentives and restrictions on benefit usage, eligibility rules for retail outlets, and nutrition education -- are examined here only in the context of how they might influence the feasibility of defining the adequacy of SNAP allotments consistent with the goals of increasing food security and access to a healthy diet. However, the committee recognizes that these factors are not directly linked to defining the adequacy of SNAP allotments.
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From page 162... ...
Their data and analysis are limited, however, by a regional focus on a single grocery chain in New England and the inclusion of only SNAP households with a history of recent participation in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
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From page 163... ...
. In the hypothetical case that SNAP program rules were changed to prohibit the purchase of SSBs with SNAP benefits, theory predicts that participants would continue to purchase the same amount of SSBs as long as spending on these products was less than the amount of cash they typically spent on overall food purchases.
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From page 164... ...
. Use of Incentives to Promote a Healthy Diet for SNAP Participants In addition to restriction or expansion of SNAP benefits, incentives offer another mechanism for encouraging the purchase of healthy foods.
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From page 165... ...
. As discussed in Chapter 1, to be authorized to accept SNAP benefits, a store must sell food for home preparation and offer for sale on a continuous basis a variety of food items that include meat, fish or poultry, breads or cereals, vegetables or fruits, and dairy products, with perishables (including frozen foods)
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From page 166... ...
SUMMARY OF FINDINGS AND CONCLUSIONS The evidence presented in this chapter highlights a number of challenges related to the calculation of SNAP benefits that have an impact on defining their adequacy. The committee's findings and conclusions based on this evidence focus on the maximum benefit guarantee, the BRR, and the net income calculation.
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From page 167... ...
These research areas include ways to incorporate time costs into the TFP; geographic price adjustments to the maximum benefit; and the effectiveness of alternative food plans, such as the Low-Cost Food Plan, in helping to achieve the program goals in areas where pricing variation negatively impacts the adequacy of SNAP allotments. Benefit Reduction Rate The committee's review of the evidence led to the finding that the fivedecades-old assumption that the average household spends 30 percent of its income on food purchases is inconsistent with current spending patterns of American families, regardless of income.
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From page 168... ...
The committee drew two conclusions from these findings. First, raising the shelter deduction cap to reflect geographic differences in housing more accurately would likely decrease the net income of SNAP households and thereby increase the amount of the allotment available for food purchases.
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From page 169... ...
2012. The Supplemental Nutrition Assistance Program.
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From page 170... ...
2012b. Supplemental Nutrition Assistance Program: Eligible food items.
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From page 171... ...
2012e. Supplemental Nutrition Assistance Program: Eligibility.
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From page 172... ...
2011. Trends in Supplemental Nutrition Assistance Program participation rates: Fiscal year 2002 to fiscal year 2009: Final report.
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From page 173... ...
2012. The Rhode Island Supplemental Nutrition Assistance Program (SNAP)
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From page 174... ...
2002. Issues in Food Assistance: The Standard Deduction in the Food Stamp Benefit Formula, FANNR 26-3.
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