Dive Brief:

• The United States Department of Food and Agriculture (USDA) has proposed a rule to close a "loophole" that allows eligibility for some households whose gross income exceeds program limits to participate in the Supplemental Nutrition Assistance Program (SNAP), according to a press release. 
• In forty states including Washington, D.C., people receiving minimal Temporary Assistance for Needy Families benefits automatically qualify for SNAP, but the USDA wants to change that so that only families receiving ongoing assistance would be eligible for SNAP.
• The USDA argues that the rule allows states to misuse the program and bypass important eligibility guidelines. The proposal could save an estimated $2.5 billion, the agency estimates. Opponents of the measure argue that many families whose gross income exceeds SNAP limits but that also have high living expenses and need help purchasing food would be unnecessarily kicked off the program. The public has 60 days to provide comment on the proposed rule.

Dive Insight:

Under the proposed change, about 3 million people, or 8% of SNAP recipients, would lose eligibility, according to a USDA fact sheet. This is seen as a positive move from the USDA’s perspective, with U.S. Secretary of Agriculture Sonny Perdue saying in a statement that the change will prevent abuse of a critical safety net system.

But other stakeholders and members of Congress see the new rule as a way to take much-needed benefits away from families who may have only recently reached a certain income threshold. It could also limit school meal assistance for children and reduce nutrition benefits for seniors. 

Outside of the political debate, a cut in SNAP benefits could impact retailers including supercenters, dollar stores and traditional grocers that serve customers using SNAP. A drop of 3 million customers wouldn't be detrimental, but the ongoing attempt from the federal government to limit SNAP could require some adjustments. 

More retailers are working to expand their acceptance of SNAP benefits to make it easier for all shoppers to purchase food both in-store and online. Walmart now accepts SNAP at all pickup locations, and Amazon, Walmart and ShopRite are participating in a USDA pilot program to accept SNAP benefits for online grocery orders.

The Trump Administration tried to include another proposal to reduce SNAP eligibility in last year’s Farm Bill, but Congress did not approve that version. President Trump signed the Farm Bill in December without the SNAP changes.