New Food Stamp Rules Help California’s Low-Income Families

California families struggling to put food on the table during a period of record-high unemployment (the unemployment rate was 11.5 percent as of May) received a boost from a new state policy that took effect last week. Under new rules issued by the Department of Social Services (DSS) that reflect a change in state law (Beall, Chapter 625 of 2008), California families with children that receive nutritional benefits through the Food Stamp Program no longer have to meet the “asset test,” which limits most households to just $2,000 in savings and other assets (with some exceptions) in order to qualify for benefits.

Now, families coping with a layoff and a significant loss of income won’t have to “spend down” their savings in order to qualify for food stamp benefits. In addition, some families that would have forgone food stamp benefits in order to preserve more of their hard-won savings are now more likely to participate in the program. Finally, families that currently receive food stamps won’t have to curtail their efforts to save for the future in order to stay under the artificial $2,000 threshold. (However, families still must continue to meet other requirements, including a stringent income test.) This policy change took effect on July 1 for current food stamp recipients with children, and counties are required to eliminate the asset test for new food stamp applicants with children by January 1, 2010. However, DSS decided not to change the rules for some households: Unlike families with children, single adults or adults who live together without kids must continue to meet the asset test to qualify for food stamp benefits.

Helping more low-income California families qualify for and retain food stamp benefits will help boost the state’s ailing economy by circulating more federal dollars through local economies. Food stamp benefits are 100 percent federally funded, and the economic recovery bill signed by President Obama in February temporarily increased benefits by 13.6 percent. This increase will raise the average household benefit in California from about $300 to $341 per month. As the Wall Street Journal noted yesterday, “the food-stamp boost [to the economy] is almost immediate,” with families redeeming nearly all benefits within a month of receipt. “The quick influx of cash into the economy reflects the often desperate situation faced by millions of households struggling to put enough food on the table.”

— Scott Graves

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