OTDA Issues Directions to Counties to Implement Food Stamp Program Changes

September 1, 2002

Author: Barbara Weiner

The Food Stamp Program Reauthorization Act of 2002 (P.L. 107-171) contained many welcome changes in food stamp program (FSP) operations.  Chief among these was the restoration of food stamp eligibility to substantial numbers of lawful immigrants.  (See “Food Stamp Program Is Reauthorized,” June 2002 issue of the LSJ.)  In addition to mandatory program revisions, the Reauthorization Act of 2002 gave states the opportunity to implement a number of options that were designed to enlarge program access, simplify program operation, and, in some cases, increase benefits. On August 16, 2002,  The Office of Temporary and Disability Assistance (OTDA) issued a policy directive, 02 ADM 7, setting out the options it had chosen and the changes that local districts must make in food stamp program operations.  Many of these changes are effective October 1, 2002. (OTDA’s policy directives are available on their website:  http://www.otda.state.ny.us/.)
 
In addition to issuing the FSP Reauthorization ADM, OTDA also announced a welcome amendment to its food stamp program vehicle exclusion policy.  Greatly simplifying the current rule, which only exempts one general purpose vehicle per household, OTDA directed the local districts to completely exclude from the resource test one licensed vehicle per adult household member and one licensed vehicle for each child under 18 who drives to school, work (including looking for work), or training.  (See 02 ADM-6, August 8, 2002.)  This should both simplify and broaden access to food stamp benefits, particularly for households in rural areas where having more than one functioning automobile is far from a luxury. 
           
Food Stamp Reauthorization Act Changes
 
As noted, the Reauthorization Act (the Act) made numerous changes in food stamp program operation, the most dramatic of which was the restoration of eligibility for most legal immigrants.  However, the impact is not likely to be felt until April of next year, when immigrants who have been in the United States in a qualified status for at least five years will again be eligible for benefits.  More immediate are some of the optional changes adopted by New York in the counting of income and the budgeting of various income deductions and exemptions.  A more detailed description follows.
 
Budgeting Changes
 
The mandatory budgeting changes made by the Act are effective October 1, 2002.  OTDA has indicated in its implementing ADM that the optional provisions it has adopted will also be put in place by that date.  The mandatory and optional changes include the following:
 
Standard Deduction: The fixed standard deduction is replaced by a deduction that better reflects household size.  The Act sets the deduction at 8.31% of the federal poverty level for each household size, except that no household can receive a deduction greater than the standard deduction for a six-person household.  Because the federal poverty level is not only indexed to family size but is also adjusted annually to reflect increases in the cost of living, the standard deduction will no longer be a fixed amount from year to year.  For the coming year, only households with five or more members will see an increase in their standard deduction because the formula actually yields lower deductions for smaller households than the current $134 a month.  The Act’s hold harmless provision, however, guarantees that all households not eligible for an increase will at least get the current deduction of $134.
 
Child Support Income Exclusion: New York has adopted the option provided by the Act to treat child support payments a household member is legally obligated to make as an income exclusion rather than a deduction from income.  The main benefit of treating child support paid by a household member as an exclusion rather than a deduction is that the determination of whether the household meets the food stamp program gross income eligibility requirement (income not exceeding 130% of the poverty level) is made without counting the portion of income that goes out to pay child support. However, the child support payments will be put back  in for purposes of calculating the 20% earned income deduction.
 
Additional Income Exclusions: The Act permits the states to exclude certain sources of income for food stamp budgeting purposes that are excluded from counting in the state’s TANF or Medicaid program.  Pursuant to this option, OTDA has directed the local districts, effective October 1, 2002, to begin excluding the following income from counting in the food stamp program:

• All educational grants, loans or scholarships for educational purposes other than  for general living expenses;
• Individual Development Accounts (IDAs) for post-secondary education, first home purchase, or business capitalization;
• Adoption subsidy payments;
• Foster care payments (thus it will no longer be necessary to exclude the foster care child from the food stamp household in order to exclude the foster care payments made on behalf of the child from counting as income);
• VISTA payments (Vista stipends will now be excluded regardless of whether the VISTA volunteer applies for food stamps before or after (s)he receives the Vista payments);
• Funds and agreements for burial services and headstones, up to a maximum of $1,500 per food stamp household member (see GIS 01/ TA/DC024) — this is in addition to the current exclusion for burial plots and funds held in an irrevocable trust;
• HUD community development block grants;
• Infrequent and irregular income up to $20 a month;
• Aid and attendance benefits and household benefits received from the Veteran’s Administration;
• All German reparations payments (not only those received by victims of Nazi persecution); and
• Austrian General Social Insurance payments.

Simplified Standard Utility Allowance: States who are willing to adopt mandatory Standard Utility Allowances (SUAs) rather than allowing individuals the option of deducting their actual heat and utility costs are able to implement several favorable budgeting rules.  New York has opted to make the SUA deduction mandatory. This will benefit many households; and, because the SUA allowances are generous, they are unlikely to negatively impact many, if any, food stamp households. 
 
By utilizing the mandatory SUA deduction:

• Regardless of whether one or more of the households in a shared living arrangement receive food stamp benefits, each household will now be entitled to the full applicable SUA level rather than, as previously, a prorated SUA that was based on the number of households residing in the shared living situation.
• Households consisting of food stamp eligible members and others who are not eligible (e.g. students, certain immigrants, individuals who don’t furnish a SSN) will now also be entitled to the full, rather than a pro-rated, SUA. 
• Residents of public or subsidized housing with heat included in the rent who pay “excess utility charges” (for example for an air conditioner) are entitled to the applicable SUA instead of just getting a deduction of their actual costs.

Changes to the Treatment of Certain Resources
 
The resource limit for households containing disabled individuals has been increased to $3,000 to conform to the resource exemption for households containing an elderly member.  In addition, several of the income exclusions listed above are also excluded as resources, for example, IDA’s; educational grants, loans, and scholarships; German reparation payments; and Austrian General Social Insurance payments.  In addition, EITC refunds and children’s savings accounts of under $500 made up of gifts or the child’s earnings are also excluded.  For the purpose of the latter exclusion, a child is a household member under the age of 21.
             
Transitional Food Stamp Benefits
 
During the past year, transitional food stamp benefits have been available to New York  households for up to three months after their Family Assistance case closes, provided the household no longer receives any form of cash assistance.  Households with food stamp sanctioned members, whose Family Assistance case closes, are excluded from access to transitional food stamp benefits, though the local district is still required to make a separate determination about the household’s continuing food stamp eligibility.
           
The Act has now extended the transitional benefit period from three to five months. OTDA has informed the local districts that the transitional benefit amount will be calculated by removing the TANF benefits from the pre-TANF case closing food stamp budget and freezing the resulting food stamp benefit level for the following five months.  Households whose circumstances change during the transitional period in ways that would increase their food stamp grant must recertify in order to receive the increased grant.  Only changes that are reported and verified that would increase the transitional benefit will “unfreeze” the transitional benefits.
To continue receiving food stamp benefits after the transitional benefit period expires, households must be re-certified, regardless of whether there are months remaining in their original certification period. 
 
Restoration of Food Stamp Eligibility
to Certain Immigrants
 
The Act restored the food stamp eligibility of three groups: qualified immigrant children, regardless of their date of entry; qualified disabled immigrants, regardless of their date of entry; and all other immigrants who have resided in the United States in a qualified status for at least five years.  The category “qualified immigrants” was first defined in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) and includes lawful permanent residents, refugees, asylees, persons granted withholding of deportation or removal, Amerasians, Cuban/Haitian entrants, persons paroled in the U.S. for at least one year, conditional entrants, and certain victims of domestic violence.
 
The restoration of eligibility for food stamps to these three groups has been staggered over the coming year.  First, disabled immigrants will become eligible to receive food stamps, effective October 1, 2002.  On April 1, 2003, by far the largest group, immigrants who have been in the United States in a qualified status for at least five years, will gain access to the food stamp program.  Next October, all qualified immigrant children, regardless of their date of entry, will be eligible for food stamps.  The deeming of sponsor income will not apply to qualified immigrant children who apply for food stamps.  Taking these groups in the order of the dates their access to benefits is restored:
 
Disabled Qualified Immigrants: The restoration for disabled immigrants uses the Food Stamp Act’s definition of disabled.  Under the Food Stamp Act, a disabled person is someone who receives disability benefits under one of several programs, including Supplemental Security Income (SSI) and disability-related Medicaid. Unfortunately, the number of immigrants likely to benefit will be few.  Most of the disability-based programs which would qualify someone as disabled for food stamp benefit purposes are not any more accessible for immigrants arriving in the United States after August 22, 1996, than the food stamp program itself has been.
 
Immigrants in a Qualified Status for Five Years: In April of 2003, immigrants who have resided in the United States in a qualified status for at least five years will again be eligible for the food stamp program.  This is by far the most significant aspect of the Act’s immigrant restoration provisions. 
 
Immigrants in this group who have held a qualified status since prior to December 19, 1997 will also be free of sponsor deeming and liability because the enforceable affidavits of support did not take effect until after that date.  Furthermore, restoration of eligibility to immigrants in a qualified status for five years will automatically eliminate the current seven-year limit on the eligibility of refugees, asylees, Amerasians, and Cuban or Haitian entrants. Because immigrants admitted for humanitarian reasons are not required to have sponsors, these immigrants will not be subject to sponsor deeming and liability no matter when they obtained qualified status.
 
Qualified Immigrant Children: On October 1, 2003, any child who is a qualified immigrant and who is otherwise eligible for food stamps will be able to get benefits, regardless of their date of entry to the United States.  Sponsor deeming will not apply so that children whose sponsors either will not or cannot support them will be able to get food stamps without having the sponsor’s income and resources deemed available to them.  Of course, if the sponsor is part of the food stamp household, the income and resources of the sponsor will be counted in the same way that the income and resources of any other household member is counted.
 
Change Reporting and Processing
 
OTDA has instructed the counties to extend the six-month reporting requirement currently in effect for food stamp households with earned income to households with unearned income.  However, certain households will remain subject to “change reporting” rules, which requires the household to report changes in the household’s circumstances within ten days.  Food stamp households that remain subject to change reporting include: farm workers, homeless households, households with no income, households certified for less than four months, and group home residents in receipt of SSI or Social Security Disability.  Of course, food stamp households receiving public assistance must still follow change reporting rules with respect to their cash assistance case.
 
Food stamp households subject to six-month reporting are required to report if their income exceeds 130% of the poverty level for a household of their size.  Households without children whose members are subject to the able-bodied adults without dependents (ABAWD) rules must also report any reduction in work activities to below 80 hours a month.