USDA urges California to end food stamp cash-out

The U.S. Department of Agriculture is encouraging California to consider reversing a policy that prevents some of the state’s poorest and most vulnerable residents from applying for food stamps, even though ending the policy could cost some current recipients their benefits.

The suggestion has raised concern among some advocates for the poor who were hoping that federal authorities would allow the state to open the food stamp program only to recipients of cash assistance for impoverished elderly and disabled people who would not be adversely affected.

“We really do want to make sure that we protect those households with disabled children and low-income seniors that benefit from the current policy,” said George Manalo-LeClair, senior director of legislation for California Food Policy Advocates.

In an Aug. 6 letter to the California Department of Social Services, the USDA said federal law prohibits the state from changing the rules for some Supplemental Security Income recipients and not others.

California is the only state that does not allow its 1.2 million Supplemental Security Income recipients to apply for federal food stamps. When the federal cash assistance program was created in 1974, the state decided to increase its matching grant — known as the State Supplementary Payment — by $10 a month in place of administering food stamps for them.

At the time, many recipients qualified only for the minimum food stamp allotment, then $10. Augmenting cash payments by that amount helped the state reduce its administrative costs and relieved elderly and disabled people from having to apply for food stamps.

However, a recent increase in food stamp benefits and cuts to California’s cash assistance grants have raised concerns that some Supplemental Security Income recipients are being shortchanged by the policy.

According to state officials, Supplemental Security Income recipients who live alone or with another recipient would now be eligible for more benefits if allowed to apply for food stamps. But officials caution that some would suffer if the state reversed the food stamp cash-out policy.

Currently, households that include members who are not receiving Supplemental Security Income may apply for food stamps without the aid recipient’s income counting against the rest of the family’s eligibility or benefit levels. If California allows Supplemental Security Income recipients to apply for food stamps, that could reduce or eliminate their household benefits.

John Wagner, director of the California Department of Social Services, wrote to the USDA’s Food and Nutrition Service in April to ask if California could open the food stamp program only to households that depend solely on Supplemental Security Income.

“While [the agency] is unable to grant your request to partially end cash-out, I encourage you to consider the idea of ending cash-out completely,” Under Secretary for Food, Nutrition and Consumer Services Kevin Concannon responded last week.

Citing a February study by the independent Mathematica Policy Research organization, Concannon said opening the food stamp program to all Supplemental Security Income recipients “would have a lesser impact on mixed households than in prior years.”

When Mathematica estimated the effects in 2002, it found that changing the policy would add more than 52,000 households to the food stamp rolls but reduce the total amount of benefits received in California by 12%. Under current circumstances, an estimated 54,000 households would be added to the rolls and benefits would drop 1%. Participation in the program would be higher if newly eligible households were automatically enrolled, the studies noted.

Jean Daniel, a USDA spokeswoman, said it was up to California to decide how it wants to proceed.

Social Services spokeswoman Lizelda Lopez said state officials remain concerned about the 99,000 households they estimate would lose some or all of their benefits.