SNAP is the largest of the 15 domestic food and nutrition assistance programs overseen by USDA’s Food and Nutrition Service (FNS). FNS jointly administers SNAP with the states. FNS pays the full cost of SNAP benefits and pays approximately half of states’ administrative costs.is also responsible for promulgating program regulations and ensuring that state officials administer the program in compliance with program rules. States administer the program by determining whether households meet the program’s eligibility requirements, calculating monthly benefits for qualified households, and issuing benefits to participants. As shown in figures 1 and 2, SNAP participation and costs generally increased between fiscal years 2001 and 2011, though the most significant increases began in fiscal year 2008. According to FNS, the growth in SNAP participation in recent years is likely attributable to the economic recession, outreach efforts, and modifications to program policy. Because households must be low- income to receive SNAP benefits, participation and costs typically increase during economic downturns as more people become eligible and apply. Although the recent recession officially lasted from December 2007 through June 2009, since then, unemployment has remained above average levels and SNAP participation has continued to grow. Further, because federal law identifies SNAP’s main purpose as “raising levels of nutrition among low-income households,” one of the key performance measures for the program is the rate of participation among eligible households. As a result, for years, FNS has encouraged states to undertake outreach efforts and adopt various modifications to program policy to increase participation among the eligible population and increase program efficiency. Although the participation rate varies by state, ranging from an estimated 53 percent in California to 100 percent in Maine in fiscal year 2009, the national rate has been about 70 percent in recent years. Under federal law and regulations, eligibility for SNAP is based primarily on a household’s income and assets. A household generally includes everyone who lives together and purchases and prepares meals together. To determine a household’s eligibility, a caseworker must first determine the household’s gross income, which cannot exceed 130 percent of the federal poverty guidelines, and its net income, which cannot exceed 100 percent of the guidelines (or $18,530 annually for a family of three living in the continental United States in fiscal year 2012). Net income is determined by taking into account certain exclusions and deductions, for example, expenses for dependent care, utilities, and housing. In addition, a caseworker must determine a household’s assets under various requirements. For example, a household’s liquid assets, such as those in a bank account, currently cannot exceed $2,000 or, for households with an elderly or disabled member, $3,250. However, certain assets are not counted for SNAP, such as a home, the surrounding lot, and most retirement plans and educational savings accounts. While there are also federal SNAP provisions that limit the value of vehicles an applicant can own and still be eligible for the program, all states have opted to modify those rules, and most exclude the value of all household vehicles. (See figure 3 for a general depiction of the eligibility determination process under federal SNAP rules.) Federal law also allows certain households to be deemed categorically eligible for SNAP. Under statute, households receiving monthly cash assistance from certain programs—including TANF, SSI, and state or local general assistance programs—are categorically eligible for SNAP. According to USDA, categorical eligibility can increase program access and reduce administrative burden, as states assess a household’s eligibility once for the cash assistance program rather than twice for both the cash assistance program and SNAP. (See figure 4 for a general depiction of the eligibility determination process under traditional cash assistance-related categorical eligibility.) In response to welfare reforms under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, USDA advised states that households authorized to receive non-cash services—such as case management services, transportation subsidies, or child care subsidies— from a program funded with TANF dollars could also be deemed categorically eligible. In order for a state to fund a non-cash service with TANF dollars, the service generally must further one of TANF’s purposes, which include the promotion of job preparation, work, and marriage, and the reduction of out-of-wedlock births. As set out in SNAP regulations, households in which members are authorized to receive non-cash services primarily funded with TANF are categorically eligible, and states also have the option of extending categorical eligibility to households receiving services that are less than 50 percent TANF-funded, with FNS approval required in certain cases. SNAP regulations also direct that the TANF-funded non-cash services used to confer categorical eligibility be available only to households with incomes equal to or below 200 percent of the federal poverty guidelines. As a result of this expansion of categorical eligibility, states have adopted a variety of policies to deem households that receive non-cash services from TANF-funded programs eligible for SNAP. FNS separates these types of policies into two groups—broad-based and narrow. According to FNS, BBCE policies make most, if not all, households that apply for SNAP categorically eligible because they receive a TANF-funded non- cash service, such as an informational brochure or toll-free number. (See figure 5 for a general depiction of the eligibility determination process under BBCE.) In contrast, narrow categorical eligibility policies require households to be enrolled in certain TANF-funded programs, such as employment assistance, or receiving child care or transportation assistance, in order to be categorically eligible for SNAP. Although FNS issued guidance in 1999 and regulations in 2000 explaining how states could adopt BBCE policies, relatively few states implemented them early on. Between fiscal years 2001 and 2006, 7 states adopted these policies. However, when the recent economic downturn began, and households applying for SNAP began to increase greatly, FNS encouraged states to adopt these policies to streamline eligibility processes and ease workload (see fig. 6). According to FNS, as of May 1, 2012, 43 states—including Washington, D.C., Guam, and the Virgin Islands—had BBCE policies. These policies differ in terms of the income and asset limits used to determine eligibility, as shown in table 1. For example, 24 states’ BBCE policies increase the federal gross income limit for SNAP and remove the asset limit while 2 states’ BBCE policies retain the federal gross income limit and increase the federal asset limit. After eligibility is established, benefits are determined based on each household’s monthly net income, with greater benefits provided to those with less income. SNAP expects each eligible household to spend 30 percent of its own resources on food, and therefore, each household’s monthly SNAP benefit is determined by subtracting 30 percent of its monthly net income from the maximum SNAP benefit for the relevant household size. All eligible one- and two-person households are guaranteed a minimum benefit, which is $16 for households in the continental United States in fiscal year 2012.three or more members do not receive a minimum benefit. Under federal income eligibility limits, a household with three or more members will typically be determined eligible for a SNAP benefit greater than $0. However, because some states’ BBCE policies raise the SNAP income limits, under these policies, such households are more likely to be deemed eligible for $0 in benefits. SNAP households are certified eligible for SNAP for periods ranging from 1 to 24 months, which vary based on state policy choices. Generally, the length of the certification period depends on household circumstances, but only households in which all members are elderly or disabled can be certified for up to 24 months under federal regulations. Once the certification period ends, households reapply for benefits, at which time eligibility and benefit levels are redetermined. Between certification periods, households generally must report changes in their circumstances—such as household composition, income, and Since expenses—that may affect their eligibility or benefit amounts. early 2001, states have had the option of requiring households to report changes only when their incomes rise above 130 percent of the federal poverty guidelines, rather than reporting changes at regular intervals or within 10 days of occurrence, as was required in the past.FNS, as of November 2010, all states except California and Wyoming use this simplified reporting for some or all SNAP households. FNS and the states share responsibility for implementing an extensive quality control system used to measure the accuracy of SNAP eligibility and benefits and from which state and national error rates are determined. Under FNS’s quality control system, the states calculate their payment errors annually by drawing a statistical sample to determine whether participating households are eligible and received the correct benefit amount. Because SNAP considers many factors in determining each household’s benefit amount, any of these factors can result in a payment error. For example, incorrect calculations of earned income or unearned income and inaccurate accounting of the number of household members may cause payment errors. The state’s payment error rate is based on the sample and determined by dividing the dollars paid in error by the total SNAP benefits issued. Once the payment error rates are determined, FNS is required to compare each state’s performance with the national payment error rate and impose financial penalties or provide financial incentives according to legal specifications. For more information about our analysis, see appendix I. As previously noted, household eligibility is determined by local staff administering SNAP, and the accuracy of those determinations is assessed by state and federal reviewers. We did not independently determine households’ eligibility. In April 2012, the Congressional Budget Office (CBO) released a report on SNAP that estimates a 4.3 percent annual reduction in SNAP participants over the 2013-2022 period if federal SNAP income and asset limits were applied to all categorically eligible households. However, CBO’s methodology for producing its estimates differs from our methodology in several ways.