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Monday, September 30, 2013

The Next Farm Bill: Changing the Treatment of LIHEAP Receipt in the Calculation of SNAP Benefits

Randy Alison Aussenberg
Analyst in Nutrition Assistance Policy

Libby Perl
Specialist in Housing Policy

As Congress formulates the next farm bill—an omnibus bill that reauthorizes a range of agriculture and nutrition programs—program integrity and deficit reduction have been leading themes. One of the cost-saving measures in the 113
th Congress’s farm bill proposals would address the way in which Supplemental Nutrition Assistance Program (SNAP) benefits are calculated. The SNAP statute allows for certain deductions from income when calculating a household’s benefit level, including an excess shelter deduction which incorporates utility costs. If a family receives benefits through another federal program, the Low Income Home Energy Assistance Program (LIHEAP), this deduction from income can be higher, allowing for a higher SNAP benefit for the household. Bills in both the Senate and House would limit the deduction associated with LIHEAP, particularly seeking to end a practice that has been referred to as “Heat and Eat.” Similar proposals were considered in the 112th Congress but were not enacted.

Under current law, a SNAP household can use a LIHEAP payment (regardless of the amount of that payment) to document that the household has incurred heating and cooling costs. This documentation triggers a standard utility allowance (SUA), a figure intended to represent typical state-specific utility costs that enters into the SNAP benefit calculation equation. Unless the household is receiving the maximum SNAP benefit already, a household’s monthly benefit can increase if the inclusion of an SUA results in an excess shelter deduction. In addition to current law, current practice of, most recently, 17 states also affects the interaction between these benefit programs. While virtually all SNAP states consider LIHEAP in their calculation, approximately 16 states have implemented the so-called “Heat and Eat” policy. “Heat and Eat” is a phrase that the low-income and anti-hunger advocacy community has used to describe state and program policies that leverage nominal (as little as $1) LIHEAP payments into an increase in households’ SNAP benefits that is larger than the initial LIHEAP payment. Also, one state allows SNAP applicants to benefit from an SUA if the household applies for LIHEAP.

In the 113
th Congress, farm bills in the Senate and House would limit “Heat and Eat” policies:

• Under
S. 954, the Agriculture Reform, Food, and Jobs Act of 2013, which was passed by the Senate on June 10, 2013, only LIHEAP payments above $10 annually would confer this potential advantage. Payments of $10 and below would no longer entitle a household to earn an SUA during the benefit calculation process. If a household received less than $10 in energy assistance, households would have to present alternate documentation of heating and cooling costs in order to have utilities factored into calculating their excess shelter deduction.

• Under both
H.R. 1947, the Federal Agriculture Reform and Risk Management Act of 2013, which was defeated on the House floor on June 20, 2013, and H.R. 3102, the Nutrition Reform and Work Opportunity Act of 2013, only LIHEAP payments above $20 annually would confer this potential advantage.

In addition, several bills have been introduced in the 113
th Congress that would go further than the proposals in S. 954, H.R. 1947, and H.R. 3102 and eliminate the ability of households to qualify for the SNAP SUA based on receipt of LIHEAP. Instead, households would have to present alternative documentation of utility costs. These bills include S. 458/H.R. 1510 and S. 762 /H.R. 1657.

Date of Report: September 17, 2013
Number of Pages: 15
Order Number: R42591
Price: $29.95

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