Big Bank Account? No Problem. You May Still Qualify for Food Stamps

Under existing federal policy, it doesn’t matter how much money you have in your bank account: you can still be eligible for food stamps. A policy known as “broad-based categorical eligibility” allows applicants to bypass asset tests, meaning  food stamp recipients could have an unlimited amount of assets, but if their income is low enough, they could still receive food stamps. Instead of eliminating this bad policy, however, Congress seems to be turning a blind eye to it in the current farm bill negotiations.

In the House’s farm bill, they would have nixed broad-based categorical eligibility. The Senate’s bill would have allowed this problematic policy to continue. Now, media reports suggest that the House has given way to the Senate and will allow broad-based categorical eligibility to remain in place.

To restore the integrity of the food stamps program and ensure that resources are going to those most in need, it is important that Congress eliminate this indefensible policy. A Congressional Research Services’ report explains that eliminating broad-based categorical eligibility would save roughly $12 billion over the next ten years. The U.S. Department of Agriculture, which runs food stamps, says that broad-based categorical eligibility is meant to help reduce errors in the application process. However, the Government Accountability Office (GAO) “found that a greater percentage of SNAP [food stamp] households eligible under broad-based categorical eligibility that had incomes over the federal limits had errors than other households (17.2 percent compared to 6.7 percent) in fiscal year 2010.”Additionally, GAO warned that  because of this policy “fraud could rise because SNAP caseworkers no longer look to verify net income and total assets before granting eligibility.”

Along with addressing policies like broad-based categorical eligibility, Congress should also reform food stamps to promote work for able-bodied adults.

Particularly at times when resources are tight, it is absolutely necessary that welfare programs like food stamps are based on prudent policies that focus resources to the neediest. Congress should not turn a blind eye to much-needed food stamp reforms.