Does Having Savings Affect Food Stamps?

The food stamp program, now called the Supplemental Nutrition Assistance Program (SNAP), provides low-income individuals and households with electronic benefits they can use to buy food. The federal government provides eligibility guidelines and limits that each state must follow in determining who receives SNAP benefits. These guidelines include a resource test which limits the value of cash, savings and other assets.

Federal Guidelines

The federal government has set the cap on assets for general eligibility for food stamps at $2,000 for most households. Households with a person age 60 or older are allowed up to $3,000 in assets. The assets considered include savings and investment accounts, stocks, bonds and other possessions of value. If applicants meet the income requirement but do not pass the asset test, they are not eligible for food stamps. They would need to dispose of their assets before they could receive benefits. The asset test does not apply to people who receive Supplemental Security Income (SSI) or to people who receive Temporary Assistance for Needy Families (TANF).

Categorical Eligibility

States have the option of implementing categorical eligibility and removing the asset test to expand access to food stamp benefits. Broad-based categorical eligibility makes most households eligible for SNAP if they receive non-cash benefits or services from TANF or Maintenance of Effort such as a pamphlet or an 800 number. As of June 2010, 30 states had enacted categorical eligibility to eliminate the asset test for some or all households. Texas raised the limit to $10,000 and Minnesota to $7,000. Idaho temporarily dropped the asset test for one year, which may be extended. Colorado and North Carolina were both in the process of enacting categorical eligibility. California, Maine, Maryland, New Hampshire and Washington limit the households that qualify for the asset exemption.

Savings Accounts

Savings and investment accounts are considered assets, or resources that count toward the total allowed for food stamp eligibility. The $2,000 limit, or $3,000 for seniors or disabled people, is the household limit. Therefore, it applies to all savings and investment accounts owned by people in the household as well as cash on hand and other countable assets. Under this rule, a child's savings account would be considered a countable resource.

Retirement Plans

Most retirement plans recognized by the Internal Revenue Service are not considered as countable resources for SNAP eligibility. IRA, Roth IRA, KEOGH and Simplified Employee Pension Plans (SEPs) are exempted from the asset test. Traditional defined benefit plans, employee stock ownership plans, money purchased pension plans, the Federal Thrift Savings Plan and 501(c)18 plans offered by unions are also excluded from countable resources.

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