SNAP Benefits: Can an Adequate Benefit Be Defined?^,,

Abstract

The Supplemental Nutrition Assistance Program (SNAP) increases the food purchasing power of participating households. A committee convened by the Institute of Medicine (IOM) examined the question of whether it is feasible to define SNAP allotment adequacy. Total resources; individual, household, and environmental factors; and SNAP program characteristics that affect allotment adequacy were identified from a framework developed by the IOM committee. The committee concluded that it is feasible to define SNAP allotment adequacy; however, such a definition must take into account the degree to which participants’ total resources and individual, household, and environmental factors influence the purchasing power of SNAP benefits and the impact of SNAP program characteristics on the calculation of the dollar value of the SNAP allotment. The committee recommended that the USDA Food and Nutrition Service investigate ways to incorporate these factors and program characteristics into research aimed at defining allotment adequacy.

Introduction

With nearly 1 in 7 Americans participating in the Supplemental Nutrition Assistance Program (SNAP) today, it is the largest nutrition assistance program sponsored by the federal government. SNAP enables eligible low-income individuals and families to purchase foods for preparation at home based on a monthly benefit allotment with the goal of improving participants’ food security and access to a healthy diet. SNAP participation includes all age and demographic groups; however, about one-half of all participants are households with children. Households receive a monthly benefit calculated from the household’s size, income, and other programmatic factors to provide an amount to supplement the purchase of foods assuming that 30% of the household’s net income is used for food. The allotment or amount of benefit that an individual or household receives is based on a minimal-cost model food plan, the Thrifty Food Plan. This food plan is derived from a nationwide market basket survey of the cost of foods representative of those consumed by low-income households and assessed in alignment with the recommendations of the Dietary Guidelines for Americans (1). To receive the maximum SNAP allotment, a household must have no net income to contribute to food purchases.

Regardless of the amount of income and resources available to participating SNAP households, a number of factors affect the purchasing power of the allotment and thus the adequacy of the benefit to meet participants’ needs. Questions about whether there are different ways to think about the adequacy of SNAP allotments prompted the USDA to ask the Institute of Medicine (IOM) to conduct a study examining the feasibility of establishing an objective, evidence-based definition of allotment adequacy consistent with the goals of improving food security and access to a healthy diet and to identify data and analyses needed to support an evidence-based assessment of allotment adequacy.

Current Status of Knowledge

Establishing a framework to examine SNAP allotment adequacy.

In response to its task, the IOM convened an expert committee to address questions about defining allotment adequacy and review the evidence to support such a definition. The committee reviewed currently available evidence and devised a framework to illustrate the process by which households make food choices, the factors affecting those choices, and SNAP program characteristics that influence the process (Fig. 1). By depicting the inter-relationships between individual and household factors and program characteristics, the framework provided a roadmap for the committee to examine the constraints faced by SNAP households and the feasibility of achieving their program goals.

FIGURE 1.

A framework for determining the feasibility and defining the adequacy of SNAP allotments. The framework illustrates the process by which households make food choices, the factors affecting those choices, and SNAP program characteristics that influence the process. SNAP, Supplemental Nutrition Assistance Program. Reproduced from Reference (2) with permission.

As indicated in Figure 1, whether a SNAP participant or household is able to become more food secure and has the ability to consume a healthy diet depends on factors such as total resources, including financial and time resources; various factors that affect individual and household food choices and preparation skills; and environmental factors such as food prices and transportation costs. SNAP program characteristics such as the benefit formula, nutrition education, and allowed retail outlets in turn influence these factors and the achievement of the program goals of food security and access to a healthy diet. Collectively, these SNAP program characteristics influence the adequacy of the benefit that participants receive. Key to understanding the process is identifying how these characteristics affect a household’s food purchasing power and influence the ability to achieve food security, as defined by the Food Security Supplement survey, and access to a healthy diet, consistent with the recommendations of the Dietary Guidelines for Americans (4).

Examining the evidence to define SNAP allotment adequacy.

To better inform its examination of total resources; individual, household, and environmental factors; and SNAP program characteristics that affect the feasibility of defining SNAP allotment adequacy, the committee first examined evidence related to current program outcomes. This included evidence on trends in food production, food purchasing and intake patterns in low-income households, and the prevalence of food insecurity in the United States and relationships among food insecurity, food availability, and diet quality. Among the committee’s findings is evidence that food insecurity is common in SNAP participants, with less than one-half of all SNAP households reporting that they were food secure (3).

In interpreting the evidence on prevalence of food insecurity, the committee took into account the likelihood of self-selection bias. As noted above, food insecurity among SNAP households is much greater than other households, including other low-income households. One reason for such increased prevalence of food insecurity among SNAP participants may be that the households in greatest need are participating in the program. To illustrate, evidence from Nord and Golla (5) shows that there is an increase in food insecurity among households immediately preceding their entry into SNAP. For these same households, food insecurity declined in the months after entering the program. Other evidence from surveys of participants using private emergency food operations found that 40–50% of households using emergency food services were also SNAP participants (6, 7). Studies that included adjustment for self-selection bias found either no effect or improvement in food security with SNAP benefits (8–11). Although overall the committee’s findings indicate that SNAP benefits reduce food insecurity, clearly it is not enough to bring SNAP households closer to parity with households that do not participate in SNAP.

There is a wide range of factors that have an impact on the food purchasing power of all households. For low-income households in particular these include the knowledge and skills involved in purchasing and preparing healthy foods, the availability of time to engage in these activities, food preparation equipment, geographic food price variations, and environmental conditions such as access to personal transportation to acquire healthy foods at a reasonable cost.

SNAP households share many of the same resource constraints as nonparticipating households, yet their purchasing power for healthy foods is limited by their income level and SNAP benefit amount. In addition, an increasing proportion of SNAP participants include the “working poor.” The number of SNAP households that are working has more than tripled during the last 10 y (12). Further, these low-income households have the same time constraints as higher-income earners. Single-parent households comprise at least 30% of SNAP participants, suggesting a disconnect between their food purchasing power and the availability of time to prepare meals largely from basic ingredients as assumed by the Thrifty Food Plan. Mancino and Newman (13), e.g., found that low-income women working full time who were single-parent heads of household were not able to meet the time estimates for meal preparation implicit in the Thrifty Food Plan. Further, Davis and You (14, 15) found that if the value of time spent to produce meals consistent with the target of “a nutritious diet at a minimal cost” (16) is ignored, single heads of household spent 35% more on food than 2-parent households. However, analyses that included the value of time indicated an ~40% lower expenditure on food by single heads of households to meet the Thrifty Food Plan target. That means that a greater proportion of the SNAP allotment is likely spent on more costly partially or fully prepared foods than is accounted for in the benefit amount. In a review of data on food choices among working families, Jabs and Devine (17) found a complex mix of factors that affected healthy food choices. However, their review also suggested that less healthful food choices are associated with the perception of time as a constraint among low-income compared with higher-income families.

In addition to time, many low-income households are further limited by inadequate access to transportation to large supermarkets as well as the knowledge and skills needed to plan, purchase, and prepare healthful meals. For example, although the mean distance to a supermarket was found to be comparable between low-income and high-income households, the percentage of households without access to a personal vehicle was much higher among low-income areas (18). Other evidence indicates disparity between minority low-income households and low-income households generally and supermarket access (19–21). Considered collectively, these additional limitations faced by many SNAP households suggest their ability to purchase a variety of foods at a reasonable price is not comparable with that of higher income households.

From the evidence it reviewed, the committee found the factors having the greatest impact on defining SNAP allotment adequacy were: 1) the availability of time needed by most households to purchase and prepare foods as defined by the Thrifty Food Plan, the basic assumptions of which are built into the benefit calculation; 2) substantial variation in food prices across geographic regions nationwide and between rural and urban areas; and 3) the disparity between low-income and minority compared with other households created by unequal access to large retail markets offering a variety of healthy, affordable foods.

Characteristics of the SNAP program present an additional challenge to households in meeting program goals. The evidence reviewed by the committee on components of the SNAP benefit formula identified particular challenges related to the calculation of benefits that have an impact on defining benefit adequacy. Specifically, the committee found that the maximum benefit guarantee, the benefit reduction rate, and the calculation of net income have the greatest influence on the adequacy of SNAP allotments. Thus, the components of the benefit formula that were reviewed by the committee were the maximum SNAP benefit for household size, the benefit reduction rate, and the household or individual participant’s determined net income.

The maximum benefit guarantee, derived from the Thrifty Food Plan, is designed for a reference family of 2 adults and 2 children. Calculation of the benefit formula is complex and includes many variables. Cost adjustments are made for variations in family size to reflect economies of scale in food purchases (22). Evidence reviewed by the committee suggests that the Thrifty Food Plan does not account for time costs associated with purchase and preparation of foods or variations in food prices across geographic regions, but evidence was lacking on how best to incorporate these factors into the benefit formula.

The benefit reduction rate, the rate at which the maximum SNAP benefit is reduced per dollar of net income, is set at 30%; in other words, the SNAP allotment is the difference between the maximum benefit per individual or household and 30% of net income (23). This adjustment is based on the assumption that a household is expected to spend ~30% of its net income or resources on food. There are a number of trade-offs incurred in setting the benefit reduction rate that affect a participant’s benefit amount. For example, a high benefit reduction rate reduces program costs and directs a larger share of benefits to those with the lowest incomes. However, it also reduces eligibility and creates a disincentive to participants from working, because they will receive a lower benefit for each additional dollar earned. On the other hand, a lower benefit reduction rate does not penalize participants in the lowest income categories who work as long as they are not close to the eligibility threshold. However, because each dollar earned is counted against the threshold for eligibility, for those who are very close to the threshold, a lower benefit reduction rate can affect eligibility for benefits. To illustrate, benefit reduction rates accumulate across programs, so a participant in SNAP who also participates in Temporary Assistance for Needy Families and receives housing and earned income tax credit will experience a cumulative benefit reduction rate that could have an impact on eligibility if they are close to the threshold. Additionally, an increase in income affects how deductions such as the earned income deduction and the excess shelter cost deduction are used to compute net income and thus eligibility (24–26).

The committee found that the current calculation of the benefit formula is inconsistent with current spending patterns of most Americans, including those in low-income categories. Most households spend an average of 13–16% of net income on food, not 30% as calculated in the benefit reduction rate. The committee concluded that although the effective benefit reduction rate may be somewhat lower than 30% due to the way net income is calculated [compared with the measure of net income used in the Consumer Expenditure Survey (27)], the benefit reduction rate does not reflect current purchasing behavior.

Overall, the committee found that the individual, household, and environmental factors and program characteristics it identified may not adequately capture the impact of the full range of household costs, particularly housing and medical costs, which reduce the purchasing power of the SNAP allotment. Thus, more evidence is needed to fully understand the relation of any of the identified factors or characteristics to the adequacy of the SNAP allotment. This is particularly true for SNAP program characteristics identified by the committee as possibly relevant to defining allotment adequacy but for which the evidence to do so was insufficient. These characteristics are nutrition education, allowed retail outlets, and incentives and restrictions to food purchase options. There are 2 nutrition education programs aimed at SNAP and low-income populations: the SNAP-Education program and the Expanded Food and Nutrition Education Program. Although limited in their outreach to SNAP participants, these programs have the potential to influence food choice behavior, knowledge about healthy meal planning and preparation, budgeting, and meal preparation.

The SNAP program sets the criteria for retail outlets that participate in the program. Requirements include: they must sell food for preparation at home, offer a specified variety of food, and food sales must account for at least 50% of total sales. In addition, hot, prepared foods cannot be purchased with SNAP benefits. More research is needed, however, to evaluate whether these retail outlet requirements have an impact on SNAP allotment adequacy.

Incentives and restrictions are factors that may have an indirect impact on how benefits are used, eligibility rules, and how nutrition education is planned for SNAP participants. Examination of the impact of incentives and restrictions was considered, however only within the context of how they could influence the adequacy of the SNAP allotment, recognizing that these factors are not directly linked to benefit adequacy. Incentivizing participants to purchase healthy foods, e.g., by expanding the benefit for fruits and vegetables may encourage healthier purchasing, but the countervailing impact on program administration, issues around access to retail outlets, and participants’ freedom in decision-making must also be considered.

Similarly, imposing purchasing restrictions, e.g., on sugar-sweetened beverages, may serve as a disincentive toward the purchase of such items, but there is no evidence demonstrating that such restrictions have an impact on the overall purchasing behavior of participants. This is particularly true when considered in the context of SNAP’s role as a supplement to resources used for food purchases. Because of the complexity of the tradeoffs involving incentives and restrictions along with the lack of evidence demonstrating an impact on the purchasing power of the SNAP allotment, the committee did not reach a conclusion or formulate a recommendation about them beyond calling for additional research in this area.

The committee concluded that it is feasible to define the adequacy of SNAP allotments and that certain factors and characteristics identified in the framework need to be examined as critical elements of a definition. These include the total resources, individual, household, and environmental factors of time, geographic price variation, and access to food outlets as well as the SNAP program characteristics of the maximum benefit guarantee, benefit reduction rate, and calculation of net income. The committee did not make recommendations about SNAP policy; rather, it recommended that the USDA Food and Nutrition Service investigate ways to incorporate these factors and program characteristics into research aimed at defining allotment adequacy.

Specific research areas recommended for USDA to examine include revisions to the calculation of the maximum benefit that could allow SNAP participants, similar to non-SNAP households, to purchase more partially or fully prepared foods and spend less time planning, purchasing, and preparing meals according to the Thrifty Food Plan and reduce the impact of geographic price variation on food purchasing power.

Although the Thrifty Food Plan is consistent with a healthy diet, because of changes in family and societal economics, family or household composition, and other social changes, the percentage of its net income that a typical U.S. household spends on food is very different from the time when the assumption formula was first devised. Thus, additional evaluation is needed on the assumptions in the formula that realistically account for the portion of a household’s income that SNAP participants are expected to devote to food purchases as a way of more closely aligning actual purchases with calculations used in determining the benefit.

The current assumption that 30% of a household’s income should be dedicated to food purchasing is not consistent with today’s purchasing patterns, even among low-income households. Changes in family structure that include an increase in the number of single-parent households with children as well as in the number of elderly individuals living at home raise additional questions about how food costs are calculated using the current 2-adult, 2-child reference family as the basis for determining the SNAP benefit level. Such changes in household size and structure compel a reexamination of how the SNAP benefit formula, the benefit reduction rate, and the calculation of net income affect the purchasing power of the SNAP allotment and the extent to which it is targeted to SNAP participants.

The committee also recommended that USDA examine different approaches to accounting for geographic price variation. An example of adjusting for such variation would be to modify the maximum benefit with a price adjustment for high- and low-cost regions of the country. Additional research is recommended on the effect of nutrition knowledge and resource management skills and surveys of the cost and availability of food that affect access to food outlets for SNAP participants. The committee further recommended an ongoing monitoring and assessment program to evaluate the correspondence between the definition of adequacy and attainment of program goals, allowing for adjustment of definition adequacy over time. In other words, on-going monitoring of the achievement of food security and access to a healthy diet is necessary for continuing evaluation of the usefulness of the definition of adequacy. Finally, the committee identified emerging evidence for future consideration. This includes the influence of incentives and restrictions on the purchases of healthier foods by SNAP participants and the relative cost of ready-to-eat prepared foods on the total cost of a market basket of healthy foods.

Implications.

In summary, the adequacy of SNAP allotments can be defined; however, it must take into account the degree to which total resources, individual, household, and environmental factors influence the purchasing power of SNAP benefits and the impact of SNAP program characteristics on the calculation of the dollar value of the SNAP allotment. An important component of defining SNAP adequacy is to conduct evaluations of both the costs and impacts of recommended changes in the program and to implement ongoing monitoring of the ability of SNAP participants to utilize their allotment to improve their food security and access to a healthy diet. By defining SNAP allotment adequacy based on data that more accurately account for households’ expenditures affecting resource availability, are more closely aligned with current spending patterns, and that consider the range of factors that influence food security and access to a healthy diet, USDA will be better positioned to provide a benefit that aligns participants’ purchasing power more closely with that of nonparticipant households and supports the purchase of a variety of healthful foods.

Nutrition assistance programs like SNAP that are designed in compliance with the Dietary Guidelines for Americans have the potential to improve the nutritional health of participants. Additional outcomes that could have a long-term impact include a definition of the SNAP allotment that is adequate to purchase a healthy diet that may in turn contribute to promoting better overall health and reducing risk of chronic disease among participants.

The committee’s recommendations for defining, measuring, and monitoring the adequacy of SNAP allotments are structured to assist the USDA-Food and Nutrition Service in establishing an objective definition of the adequacy of the allotments, taking into consideration the evidence for these factors, and to identify specific data and analysis requirements to support an evidence-based assessment of allotment adequacy.