Raising SNAP’s gross income limit supports work

Raising SNAP’s gross income limit supports work

Food assistance benefits provided by the Supplemental Nutrition Assistance Program (SNAP) generally taper off as income rises, ensuring that most SNAP recipients are better off when they get a raise at work. But some SNAP recipients—particularly working families with high childcare costs—face a financial cliff when their income rises enough to make them ineligible for the program, but not enough to make up for the benefits they lose.

A new proposed change to Louisiana’s SNAP rules would smooth out this benefits cliff and give working families a boost by raising the program’s gross income eligibility limit to 200% of the Federal Poverty Line—$3,660 per month for a family of three—using an option called Broad Based Categorical Eligibility.

The model above assumes a three-person household, with $306 per month in deductible childcare costs (the average amount for SNAP households with preschool-aged children in 2019), with at least $597 in shelter costs per month, and with no countable unearned income.

Families are typically eligible for food assistance through SNAP if their monthly income before deductions falls below 130% of the federal poverty line—$2,379 for a family of three. The program allows families to deduct childcare costs when determining their benefit level, an important policy that helps families make ends meet while ensuring that their young children receive good care while the parents work. As a result, families with high child-care costs often have higher SNAP benefits, than families without those costs.

Without an increase in SNAP’s gross income threshold, many families with childcare costs face a steep cliff if they earn just over the income limit. In fact, a family with typical childcare costs earning just one dollar over SNAP’s gross income limit stands to lose $383 every month in benefits that would otherwise keep food on their tables.

For families without childcare costs, a higher gross income threshold has a more modest effect, but still supports work by removing the financial penalty that some SNAP recipients currently face when they get a raise at work.

Setting SNAP’s income threshold at 200% of the Federal Poverty Line turns the benefits cliff into a gentle slope, gradually reducing benefits as income rises, even for working parents who receive higher benefits while they pay for childcare. This change supports working families, helps fill in for the high cost of childcare in the family budget, and encourages work by boosting workers’ earnings. The proposal to adopt BBCE to lift SNAP’s income threshold is the right policy for Louisiana families.