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Toll-Free Entitlements: States Make Food-Stamp Benefits Easily Available

Posted By Michael Sandoval On August 2, 2012 @ 8:12 am In Ongoing Priorities,Scribe | Comments Disabled

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A new Government Accountability Office report reveals that in more than 40 states a growing number of households are able to collect food-stamp benefits simply by receiving a government-issued brochure or accessing a toll-free number.

For example, in states like Alabama, Hawaii and Montana, a brochure automatically triggers eligibility in the Supplemental Nutrition Assistance Program (SNAP). In California, Kentucky, Maine and Nebraska, state-issued pamphlets or “resource guides” convey the same eligibility. Other states use a variety of other methods, including notices on the program’s application and a variety of other printed materials.

In states like Delaware, the program application “refers to a pregnancy prevention hotline.” For Oklahoma, SNAP participation may be obtained through a website and an “800 number about marriage classes,” according to a report on SNAP eligibility [2] produced by the Congressional Research Service.

More than $460 million in estimated categorical eligibility payments for the U.S. Department of Agriculture’s SNAP benefits “would not have been eligible for the program without broad-based categorical eligibility (BBCE) because their incomes were over the federal SNAP eligibility limits,” according to the GAO report.

The GAO estimates [3] that such payments account for roughly 2.6 percent or 473,000 households receiving SNAP benefits. According to a separate study from the Congressional Budget Office [4], restrictions on categorical eligibility could save an estimated $11.5 billion over the next 10 years.

Since fiscal year 2001, the number of monthly federal SNAP participants has nearly tripled to 45 million, with corresponding costs over the same time period quadrupling to just under $80 billion, the GAO reported.

The increase in overall SNAP participation and cost at the state level derives partly from the recent recession, but also substantially from an increase in eligibility triggers that have added to the number of program participants.

“Since the federal government pays for 100 percent of the cost of food stamp benefits, state governments have a financial incentive to enroll as many individuals as possible in the program,” wrote Heritage’s Robert Rector and Katherine Bradley last week in a paper that outlined needed reforms to the program [5]. Their report includes information on each state’s categorical eligibility options.

Eligibility policies have determined that any type of Temporary Assistance for Needy Families (TANF) non-cash aid may also automatically trigger SNAP categorical eligibility in at least 43 states and territories as of May 1, 2012, according to the July 2012 report on SNAP “cat-el” from the CRS.

The number of states implementing broad-based categorical eligibility has jumped dramatically since fiscal year 2007. From 2001-2006, only seven states used some form of BBCE; that number began to increase with the onset of the recession, with an additional 30 states enabling the policy from 2008-2010, according to the GAO.

SNAP provides benefits through electronic benefit transfer (EBT) cards issued to eligible low-income households.

The GAO noted that the BBCE implementation carried with it significant concerns that jeopardized the integrity of the SNAP program by interfering with eligibility verification leading, ultimately, to “more payment errors”:

Further, both our analysis of USDA data and our discussions with SNAP staff suggest that BBCE may, in fact, contribute to more payment errors. Although BBCE has been promoted by USDA as a possible means to reduce errors, we found that a greater percentage of SNAP households eligible under BBCE that had incomes over the federal limits had payment errors than other households (17.2 percent compared to 6.7 percent) in fiscal year 2010. This may be related to the fact that these households were significantly more likely to have earned income, and income is a frequent cause of SNAP payment errors. In addition, while most states’ BBCE policies removed a potential source of error by eliminating asset limits, SNAP caseworkers we spoke with told us that a reduction in the level of verification they perform may actually increase the potential for errors as well as fraud.

According to the GAO, spot checks in two states indicated that staff reported a reduced “ability to investigate other applicant information for possible inconsistencies.” Furthermore, in several additional states, the GAO noted a “cultural shift towards an overall reduction in the level of verification and investigation” due to increased participation rates and attendant workloads.

“Losing access to information,” the GAO reports, affects the workers’ effort to “help ensure [the] integrity” of the program.

Distribution of the TANF-related brochures and phone numbers was uneven, and in some cases, not readily available, the GAO said:

“Our visits to states suggest that SNAP applicants are not consistently receiving the TANF-funded information required to confer categorical eligibility and that the extent to which this information is TANF-funded is unclear. According to USDA, BBCE policies make most households that apply for SNAP categorically eligible because they receive a TANF-funded service, such as an informational brochure or toll-free number, as long as the household’s income is within the state’s specified income limit. However, in one state we visited, some local SNAP caseworkers told us they did not consistently provide the guide to services brochure to all applicants. In another, staff said that at the applicant’s request, and/or if caseworkers think there is a need, they will provide referrals to services. In a third state we visited, applicants were directed on the SNAP application to call a toll-free number to receive an informational brochure on services; however, we were unsuccessful in obtaining this brochure after repeated (5) attempts to call the number listed.”

The GAO’s acknowledgement of the spotty records of state provision of the required TANF-funded brochures and other materials coincides with a lack of oversight by the administering federal agency’s lack of a requirement of verification to determine if the eligibility-triggering TANF materials were received by the applicants:

“According to agency guidance, while states must document that a household was determined categorically eligible, USDA does not require states to document that the TANF-funded service was received by applicants. As a result, in a state where a document, such as a brochure, is used to confer eligibility, the state does not have to verify that it has provided the document to applicants as part of the eligibility determination process.”


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URL to article: http://blog.heritage.org/2012/08/02/toll-free-entitlements-states-make-food-stamp-benefits-easily-available/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/medicaidfoodstampswaitingro.jpg

[2] SNAP eligibility: http://www.fas.org/sgp/crs/misc/R42054.pdf

[3] GAO estimates: http://gao.gov/products/GAO-12-670

[4] Congressional Budget Office: http://www.cbo.gov/sites/default/files/cbofiles/attachments/HouseAgricultureReconciliation.pdf

[5] paper that outlined needed reforms to the program: http://www.heritage.org/research/reports/2012/07/reforming-the-food-stamp-program

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