Food Stamp Provisions of PL 104-193
Depth of the Cuts
The recently enacted welfare reform bill contains cuts to the Food Stamp Program totalling $27.7 billion over six years, which includes $3.8 billion in legal immigrant cuts. This represents half of the bill's overall spending reductions.
• California received $2.5 billion in federal food stamp funds during FY 1995. In March 1996, there were 3.2 million persons receiving food stamps in California. Of these, about 2.3 million food stamp recipients were on public assistance; another 924,000 were not receiving public assistance. Approx-imately 436,000 food stamp recipients are legal immigrants. The March 1996 average food stamp benefit was $184 per household ($69 per person) per month.
• Nationally, about 45% of the cuts are from across-the-board benefit reductions over time, while 43% of the cuts come from disqualifying legal immigrants (10%) and unemployed workers (19%), and cuts to households with high shelter costs (14%). Only about 2% of the cuts come from fraud or paperwork reduction provisions.
• The overall benefit cuts will have a growing and substantial impact on food purchasing power in poor households, creating a much greater risk of hunger and poor nutrition. In California, the average benefit reduction per food stamp household will be $537 during fiscal year 1998. By 2002, the average yearly loss in food purchasing power will grow to $603 -- about $12 per week.
• These cuts will be much higher among the poorest of the poor: food stamp households with incomes below half the poverty line. These households will have $790 less per year to spend on food by the year 2002. Families with children will also suffer disproportionately, followed by working poor and elderly households.
• California's Legislative Analyst's Office (see chart next page) estimates that the food stamp program cuts will eliminate a total of $195 million in federal food assistance funds from California in 1996-97, and $3.24 billion over the next six years.
LAO-Estimated Impact of Food Stamp Cuts in California
Food Stamp Provision 1996-97 Over Six Years
Legal Immigrant Cuts $90 million $1,563 million
Benefit Cuts 58 491
Deductions and Resource Limits 32 776
Cuts to Unemployed Adults 8 300
Changed Household Definition 7 113
Total $195 million $3,243 million
Timing of the Changes and Cuts
Most changes to the program are "upon enactment" (e.g, the day Clinton signed the bill, August 22). In reality, however, it takes time for USDA to put out implementing memos and for the State Agency (California Department of Social Services -- DSS) to notify counties and clients about the changes.
Three points to emphasize about timing:
• Nothing should happen to current clients until they are notified in writing with a Notice of Action by their county welfare department.
• Some provisions may be delayed or modified by litigation or special waivers, so specific timelines may change.
• Many provisions have exemptions or exceptions for which clients may qualify, so they may still be able to get food stamps.
DSS has a 30-day "grace" period between August 22 and September 22 where nothing has to happen. Then, the Department will have a 120-day "hold harmless" period, ending January 22, 1997, where they must implement the required changes, but won't be financially liable for any mistakes made in administering the new provisions. The bottom line: DSS may issue all-county implementation notices by the 9/22 deadline, but the new rules will really have teeth starting 1/22/97. (See attached materials for more details on timing of various provisions.) Note that the 18-50 work requirements are on a slower timeline, with the "hold harmless" period ending 6/22/97.
USDA issued a lengthy memo (Administrative Notice 96-48, August 27) listing all 54 sections of the new law that change eligibility, certification, work requirements and other aspects of Food Stamp rules. This memo was the implementation mechanism for many of the "upon enactment" provisions, but many will also require additional federal guidance and/or regulations.
On September 30, Congress amended Section 402 of the welfare bill as part of the Continuing Budget Resolution, extending food stamp eligibility for legal immigrants until April 1, 1997. This applies to legal immigrants who were on food stamps as of August 22, 1996.
Rough Timeline For Food Stamp Changes (Subject to Change)
"Upon Enactment"
Legal immigrant ban for new applicants (Mandatory Notification on 9/22; bans start immediately; law amended to delay cutoffs to current recipients until April 1, 1997.)
Many changes in certification, deductions, and definitions (see attached)
On October 1, 1996
Thrifty Food Plan Decrease (yearly: inflationary adjustment)
Increase in Vehicle Allowance with no future adjustment
On November 22, 1996
Last Day for Mandatory Notification regarding 18-50 work requirement; clock starts ticking
On January 1, 1997
Excess Shelter Cap Goes up to $250.
On April 1, 1997
Legal immigrants who received food stamps on August 22, 1997 subject to new restrictions. All recertifications of affected households must be completed by August 22, 1997.
On June 22, 1997
"Hold Harmless" Period ends on 18-50 work requirement
On July 1, 1997
Drug Disqualifications begin unless state opts out by passing law
Specific Provisions
Although the bill does not contain food stamp block grants, it makes many structural changes which have serious implications in the administration and implementation of the program. In general, those who remain eligible will still be entitled to a set amount of food stamps with no time limits, but
(1) many more people will not be eligible,
(2) it will be harder for many to get and remain on food stamps, and
(3) everyone will receive fewer food stamps (or food stamps that will purchase less food) as the years go by.
The specific provisions come under several cateogories, listed below. Most, but not all, of these specific changes are mentioned in this analysis.
Alien Eligibility -- New Applicants and Current Recipients
Changes in Benefit Calculations
Changes in Certification or Eligibility Calculations
Work Requirements -- General
Work Requirements -- Certain Jobless Adults
Program Violation and Drug Disqualifications
Waivers and State Options
Deletion of Client Service Requirements
Miscellaneous
ALIEN ELIGIBILITY: NEW APPLICANTS
Legal immigrants not currently receiving food stamps are ineligible if they apply.
Exceptions:
Five Year Limit: refugees, asylees, aliens withheld from deportation under
§ 243(a) of the Immigration Act.
Unlimited: Veterans and active duty military personnel and their dependents, and aliens who have worked 40 qualifying quarters of coverage (under Title II of Social Security Act) or can be credited with such; includes quarter worked by parent of alien under 18 or spouse if alien remains married to the spouse or spouse dies.
Starting January 1, 1997, quarters where alien received any means-tested public benefit (defined vaguely under §401 or §411 of the bill) do not count as qualifying quarter.
ALIEN ELIGIBILITY: CURRENT RECIPIENTS
Any legal immigrant who received food stamps on the date of enactment (7/22/96) is not subject to the new restrictions on legal immigrant eligiblility (see above) until April 1, 1997. All recertifications of affected households must be completed by August 22, 1997.
CHANGES IN BENEFIT CALCULATIONS
Beginning October 1, 1996, annual adjustments to the maximum allotment level are based on 100% of Thrifty Food Plan and cannot fall below FY 1996 level ($231 for family of 3).
Sets the excess shelter cap at levels as follows. These caps are smaller than under the old law and will severely impact families with high rents.
$247 beginning 12/31/96. (Mass change on 1/1/97).
$250 beginning 1/1/97.
$275 beginning 10/1/98.
$300 beginning 10/1/00.
Raises fair market value of vehicle used in resource test to $4,650 and eliminates future adjustments. (10/1/96 for applicants and at recerts)
CHANGES IN CERTIFICATION (Selected provisions)
Children under 22 who live with their parents and their own spouses or children must be included in same household as parents.
Earned income of students 17 or younger is excluded. The old law allowed families to exclude income up to age 22.
Persons "doubling up" with someone else can be defined "homeless" for only 90 days.
State energy payments or in-kind state or local assistance counts as income (with some exceptions); federal LIHEAP does not.
Homeless assistance vendor payments (homeless shelter allowances) count as income.
Benefits prorated after any break in certification except for farmworkers.
Earned income deduction is not allowed if earned in public workfare or work support progam.
Earned income deduction is not allowed if overissuance due to failure to report income in a timely manner.
No "SUA switching": households are allowed to switch between Standard Utility Allowance (SUA) and actual utility expenses only at recertification.
Expedited service expanded to 7 calendar days (old law was 5 days; California state law is still 3 days).
Eliminates homeless eligibility for expedited service
WORK REQUIREMENTS -- GENERAL
Tightens existing disqualifications for failure to meet work requirements for persons 16 to 60 who are physically and mentally fit who (1) refuse without good cause to provide enough information to comply with work status or job availability, (2) voluntary or without good cause quit, or (3) reduce work effort to less than 30 hours per week.
State option to disqualify entire household for work rule violation for up to 180 days.
Mandatory minimum disqualification periods for workfare violations.
WORK REQUIREMENT -- CERTAIN JOBLESS ADULTS
"Able-bodied" persons between the ages of 18 and 50 without dependent children will be entitled to only three months of food stamp benefits in every 36 month period unless they are working half time or participating in a job program half time. This group of "able-bodied adults without dependents" has been given the acronym "ABAWD" by USDA.
Exemptions:
Those medically certified as physically or mentally unfit for employment (this does not have to be disability as defined by Social Security -- it can be an injury or other temporary condition).
Those who are pregnant.
Those who are exempt from work requirements under current food stamp law (this includes persons in authorized drug treatment program).
At DSS request, the USDA may waive the work requirement for any group of individuals if USDA determines that the area in which these individuals reside:
(1) has unemployment rate exceeding 10%; or
(2) does not have a sufficient number of jobs to provide employment for the individuals.
Individuals can regain their food stamp benefits if, during a 30 day period, they:
-- work at least 80 hours
-- participate in workfare, JTPA, federal/state vocational training, food stamp Employment and Training (job search does not count), or Food Stamp workfare. (Some of these programs allow participants to work off the value of their benefits, which may not add up to 80 hours per month.)
-- workfare programs can be state or locally operated and still qualify.
PROGRAM VIOLATION AND DRUG FELON DISQUALIFICATIONS
Beginning 7/1/97, persons convicted of federal or state felonies for possession, use, or dealing of illegal drugs will be permanently ineligible for food stamps. Applicants will be required to state in writing whether any household member is a drug felon. Disqualified persons are not counted as household members but their income and resources are counted. States may opt out of this provision by passing laws that exempt certain persons or limit the disqualification period.
One year disqualification for Intentional Program Violation (IPV); two years off for second IPV.
Permanent disqualification for trafficking convictions of over $500.
Ten year disqualification for fraudulent double-dipping.
"Fleeing felons,"parole violators ineligible for food stamps.
No increased food stamp benefits for reduced income due to "behavior change" penalites in other programs; state option to reduce food stamps by maximum of 25%.
State agency can share address, Social Security Number, photo of food stamp recipients suspected by law enforcement agencies of felonies or parole violations.
Requires States to collect food stamp overissuance by withholding future benefits (limited to $10 a month or 10% of allotment) or payments from any other program unless not cost effective to do so.
Allows states to retain more of collected overissuance funds (including inadvertent household error overissuance funds) than currently.
WAIVERS AND STATE OPTIONS
The bill broadens food stamp waiver authority and provides for a number of state options in the implementation of the Food Stamp Program. While these options provide an opportunity to simplify the program and align food stamp rules with those of other benefit programs, they also create the potential for erosion of recipient rights and protections.
Simplified Food Stamp Program
States can create a simplified program for households where all members are also receiving cash assistance under the new TANF block grant. States can use TANF rules, regular food stamp rules, or a combination to determine food stamp benefits, but they must comply with some minimum requirements protecting some client rights, keeping food benefits at minimum levels, etc. However, they could go as far as creating a flat food stamp grant for all household, and standardized shelter deductions.
Waivers
The bill broadens food stamp waiver authority, allowing states to make major changes in their non-TANF food stamp program. However, certain restrictions apply.
If USDA finds that a waiver proposal would reduce benefits by more than 20% for more than 5% of the households involved, then the project can only impact 15% of the households and be limited to five years.
Waivers cannot substantially transfer or supplant food stamp funds to another public assistance program or "cash out" the food stamp program. However, states can implement work subsidy programs where the cash value of a household's allotment is used to subsidize a job. These programs must be time-limited (e.g., move people out of FS-subsidized jobs), and cannot displace non-subsidized workers.
Waivers must be time-limited, they cannot waive the food stamp entitlement, the gross income limit, the work requirement exemption for parents with children under 6, the minimum wage law, further simplify already TANF-simplified rules, the prohibition against counting food stamps as income, or basic application processing requirements.
DELETION OF CLIENT SERVICE REQUIREMENTS
Under the old law, there are the standard rules that lower access barriers to the program and protect every food stamp applicant in every county in every state. Under the new law, states will be permitted to establish operating procedures that vary for local food stamp offices. States can continue current practices (i.e. continue doing the above) or develop new client service procedures as long as these procedures "provide timely, accurate and fair customer service to all applicants and recipients."
The state can determine which procedures "best serve households in the state, including households with special needs (elderly, disabled, rural, households on reservations, homeless, and non-English speaking groups)."
The bill deletes current federal client service requirements (but does not disallow):
-- uniform national application forms
-- information about client rights and responsiblilties on the application
-- allowing offices to do telephone or mail applications, interviews, and mail issuances for disabled, shut-ins or remote households
-- local office requirement to display or distribute nutrition information and eligibility for other USDA food programs
-- requirement for toll-free or local telephone number for clients to reach food stamp office
-- requirements that caseworkers use available information to verify need (instead of asking them to bring it in all over again), and assist applicants in getting the verification documents they need, or help applicants fill out the forms
-- allows workers to deny applications for applicants who have non-household members who fail to "cooperate" (i.e., cannot get receipts, check stubs from abseentee landlord, furtive sweatshop owner, etc.)
MISCELLANEOUS
The bill requires states to implement Electronic Benefit Transfer (EBT) systems before 10/1/2002 unless the state receives a waiver due to implementation barriers. It deletes the requirement that EBT systems be cost neutral in any one year and exempts EBT systems for food stamp benefits from Regulation E, which protects card holders from losses due to theft or loss of card.
State option to use mandatory Standard Utility Allowance for all households under certain conditions.
Federal matching funds for program activities limited to "informational" not "recruitment (i.e. outreach)" orientation.
State option to develop standard homeless shelter allowance of $143 per month under certain conditions.
Deletes all federal requirements for State food stamp employee training.
State option to divide a month's benefits between drug treatment center and individual, if individual leaves center; and to require resident to designate center as authorized representative.
State option to allow households to withdraw fair hearing requests orally as well as in writing, but still must confirm them in writing and allow further requests.
October 1996
For more information, contact California Food Policy Advocates, 415/777-4422.