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45. First, calculate household income

Understanding food stamp benefit calculations

Monthly income is figured one of two ways: If there is an “elderly” or “disabled” person in the household, it is done one way. If there are no elderly or disabled people in the household, it is done a different way.

See the various sections under the general topic of Financial Eligibility: What is “Income”? for more specific details about the treatment of different types of income and applicable deductions used for determining net income.

The special utility allowance (SUA), telephone utility allowance (TUA), gross and net income limits, and the maximum food stamp allotments usually change every year. The USDA Food and Nutrition Services (FNS) each fiscal year publishes updated SUA charts. FNS also annually publishes updated tables listing new income eligibility standards and maximum allotments based on federal cost of living adjustments (COLA).

FNS has published a handy-dandy Fact Sheet on Resources, Income, and Benefits that summarizes (if oversimplifies) on a single web page the basic eligibility criteria, current gross and net income limits and allowable deductions. Needless to say, this Guide is a testament that determining and getting food stamps is, well, not that simple. Whatever.

Before beginning the calculations of how much food stamp benefits an individual household will receive, it is important to understand the ideas behind the benefit calculations. This will make it easier to understand why some expenses are taken into account and how changes in income and housing expenses will affect the amount of food stamp benefits.

Overall, the food stamp calculation looks at how much money the household has to spend on food. That figure is compared to the amount of money a household of that size “should” be paying for food. If the amount a household has to spend on food is less than it “should” be spending, the household gets food stamps to make up the difference. Of course, figuring out how much money a household has to spend on food and how much money it “should” spend on food is quite complicated.

To figure out how much money a household has to spend on food, the food stamps rules look at how much income a household has. The rules start by looking at the total earned income and unearned income to the household. They then allow the household to take deductions for money spent on child care, child support, and medical costs. The money left over is what the rules say a household has available to pay for food and shelter. (We’ll call it “food and shelter money” here.)

The rules then figure out how much the household is paying for shelter. The rules add up the shelter costs, utility costs, and telephone costs. That amount is compared to the amount of food and shelter money. The rules expect that a household will use half of their “food and shelter money” to pay for shelter. If the household pays more than half, that is considered “excess shelter” money, or money the household pays for shelter that is in excess of half of their “food and shelter money.” There is a limit on how much excess shelter payment the rules will take into account. This means that in areas with very high housing costs, where household must pay more than half of their net income for shelter, the rules do not take all of those expenses into account. Some of the money these households spend for shelter will be considered by the rules to be available to pay food costs.

After the rules look at how much “food and shelter money” a household has, and how much of that money is going towards shelter, the rest of the money is considered available for food and other expenses. The rules estimate that the household will spend one-third of that money on food. If that amount for food spending is less than the maximum food stamp grant — the amount of money that USDA thinks a household should spend on food — food stamps will be issued to make up the difference.

In short, the rules assume that a household of a certain size should spend a set amount per month on food. That amount is the maximum food stamp grant. When calculating the grant, the rules look at income to the household, minus some approved deductions. They then look at how much the household spends on shelter. The rules estimate that one-third of the remaining money will be spent on food, so if that amount is less than the food stamp grant, food stamps will be issued to make up the difference.

In any event, that is the Food Stamp Program rationale, providing the framework for understanding why calculation of the monthly food stamp allotment is made the way it is.

Doing the actual food stamp calculation

Ready to give it a go? This Guide includes four basic examples illustrating how the calculation is made in four different household situations. After completing the calculations illustrated in the four examples, use net income to determine the monthly allotment. (For related information, see the section about how to use net income to determine the monthly allotment.)

You now (hopefully) have a modest understanding of the mechanics of making a food stamp income calculation. And you also now appreciate why, to ease everyone’s pain, this handy calculator, from the California Association of Food Banks.