After over two years of deliberations, spanning the 112 th and 113 th Congresses, the Agricultural Act of 2014 (the "2014 farm bill") was enacted on February 7, 2014. Within this omnibus reauthorization of dozens of agricultural and nutrition statutes, the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps) was reauthorized. While the reauthorization maintained the vast majority of prior law eligibility and benefit calculation policies, the new law does change the impact of the Low Income Home Energy Assistance Program (LIHEAP) in the calculation of SNAP monthly benefit amounts. Under prior law, SNAP recipients who also receive benefits from LIHEAP may have received increased SNAP benefits, no matter the amount of LIHEAP received. Under the 2014 farm bill, LIHEAP can only impact a household's benefit if a household receives more than $20 a year. This policy contained in the farm bill conference agreement follows similar changes in the Senate- and House-passed bills, with the Senate passing a $10 threshold and the House passing a $20 threshold. Because SNAP benefits are 100% federally funded and because SNAP is an open-ended entitlement, policy changes to benefit amounts or eligibility can generate substantial changes in spending. The Congressional Budget Office (CBO) estimated that this LIHEAP-related change included in the 2014 farm bill would reduce SNAP spending by approximately $8.6 billion over the 10-year budget window of FY2014-FY2023. (Although this change is similar to the House-passed proposal, it is estimated to impact spending slightly less due to the timing of implementation. ) Throughout the formulation of the new farm bill, reauthorization proposals focused on deficit reduction as well as agricultural program reforms. At issue throughout the process was whether and/or to what extent a reauthorization of SNAP should reduce program spending, affect eligibility, or affect benefit amounts. Supporters of the changes to LIHEAP's treatment in SNAP have framed it as a policy to improve SNAP integrity, assuring that LIHEAP is treated uniformly across all states and according to congressional intent. Detractors argue that ending the so-called "Heat and Eat" practice reduces benefits for those in need. In addition to the significance of this provision for the farm bill's cost estimate, the newly enacted policy is complex, and it can be difficult to untangle how the farm bill change would work and which states and households may be affected. This report provides prior law background on the benefit amount interactions between SNAP and LIHEAP, an explanation of the 2014 farm bill change, as well as the potential impact of this change on households and states' administration of SNAP. For further information on the farm bill and SNAP in general, please see CRS Report R43076, The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side , coordinated by [author name scrubbed] CRS Report R43332, Reauthorization of SNAP and Other Nutrition Programs in the Next Farm Bill: Issues for the 113 th Congress , by [author name scrubbed] CRS Report R42353, Domestic Food Assistance: Summary of Programs CRS Report R42505, Supplemental Nutrition Assistance Program (SNAP): A Primer on Eligibility and Benefits SNAP benefits are a function of a household's size, its net (counted) monthly income, and inflation-indexed maximum monthly benefit levels (in some cases, adjusted for geographic location). An eligible household's net income is determined (i.e., the deductions noted earlier for judging eligibility are subtracted from gross income), its maximum benefit level is established, and a benefit is calculated by subtracting its expected contribution (by law, 30% of its net income) from its maximum allotment. This equation is illustrated in the first row of Figure 1 . The calculation for a hypothetical three-person household in the 48 states with a net income of $400 is shown in the second row of Figure 1 . The current FY2014 maximum three-person benefit in the 48 states (and DC) is $497. Subtract from that maximum benefit, 30% of the household's net income. Thus, a three-person household in one of the 48 states with $400 in counted net income (after deductions) would receive a monthly allotment of $377 in FY2014. A three-person household with no counted/net income would receive the maximum monthly benefit. In most states, SNAP programs can use LIHEAP payments as proof that households have incurred heating and cooling costs. Under prior law, if a SNAP household received a LIHEAP payment in any amount , then that household could receive a higher SNAP benefit than if the household had not received LIHEAP (assuming they did not document heating and cooling costs in some other way). Under the 2014 farm bill, using LIHEAP to document heating and cooling costs is limited to payments of more than $20. Figure 2 depicts an overview of LIHEAP's role in the SNAP benefit calculation, namely that receiving such energy assistance can result in a larger monthly SNAP benefit. Under the 2014 farm bill's change, it will take greater than $20 in assistance for LIHEAP to have any impact. The discussion after Figure 2 elaborates on the definitions of various deductions used in calculating SNAP benefits, potentially including LIHEAP receipt, and how they interact in the benefit calculation process. As shown earlier in Figure 1 , the amount of SNAP benefits that an eligible household receives is based, in part, on the maximum benefit and also in part on the household's net income. The SNAP agency computes net monthly income by subtracting certain "deductions" from a household's basic (or gross) monthly income. This calculation is based on the recognition that not all of a household's income is available for food purchases. Thus, a standard portion of income, plus amounts that represent costs such as dependent care expenses or high non-food living expenses, are deducted from the gross income. For households without an elderly or disabled member, net monthly income equals gross monthly income minus the following deductions, if applicable: Standard deduction: A "standard" monthly deduction that varies by household size and is indexed for inflation. Every applicant household gets this deduction; Earned income deduction: 20% of any earned income, in recognition of taxes and work expenses; Child support deduction: Any amounts paid out as legally obligated child support; Dependent care deduction: Out-of-pocket dependent care expenses, when related to work or training; and Excess shelter deduction: The amount of shelter expenses (including utility costs, which states may standardize with a "standard utility allowance" (SUA) figure representing average state costs) that exceed 50% of net income after all other deductions. This deduction is capped for households that do not contain an elderly or disabled member. 2014 FARM BILL NOTE: Under prior law, households that receive LIHEAP could automatically qualify for a higher SUA, no matter the amount of LIHEAP received . The higher SUA is based on the assumption that households incur expenses for heating and cooling. Under the 2014 farm bill, without receipt of LIHEAP over $20 per year, households must document heating/cooling expenses another way or risk a reduction from what their benefit amount had been. For households with an elderly or disabled member, net monthly income equals gross monthly income minus: The same standard , child support , earned income , and dependent care deductions noted above; Any out-of-pocket medical expenses (other than those for special diets) that are incurred by an elderly or disabled household member, to the extent they exceed a threshold of $35 a month; and An uncapped excess shelter deduction , to the extent such expenses exceed 50% of counted income after all other deductions; 2014 FARM BILL NOTE: Because the excess shelter deduction is uncapped for households with elderly or disabled members, the change to LIHEAP in SNAP benefit calculation has the potential to make a larger difference for these households. In understanding the role of LIHEAP in benefit calculation, it is key to note that a standard utility allowance (SUA) is not something tangible; instead, it is a number that states use in place of gathering all of an applicant's utility cost and usage information. The methodology and the amounts of an SUA vary by state, and many states have several different utility allowances based upon whether a household incurs heating/cooling costs or not. An SUA often "tips the scale" toward enabling an applicant household to qualify for an excess shelter deduction, which in many cases will result in an increased monthly benefit. LIHEAP is a formula grant program under which the federal government gives annual grants to states, tribes, and territories (collectively referred to in this report as "states") to operate home energy assistance programs for low-income households. States may use funds to help eligible households pay for heating and cooling costs, for crisis assistance, and to weatherize their homes. Both renters and homeowners are eligible for LIHEAP. Federal LIHEAP requirements are minimal and leave most important program decisions to the states, including eligibility guidelines, types of assistance provided, and benefit levels. Regarding eligibility , states may set maximum LIHEAP eligibility for households up to 150% of the federal poverty income guidelines (or, if greater, 60% of the state median income), but they may not go below 110% of the poverty guidelines. States may also choose to make eligible for LIHEAP assistance any household of which at least one member is a recipient of Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), benefits through the Supplemental Nutrition Assistance Program (SNAP) , or certain needs-tested veterans' programs. In terms of benefits , states decide the types of assistance that households receive and the amount.