UHERO: Simple change could boost SNAP benefits statewide

University of Hawaiʻi at Mānoa

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A policy change by the State of Hawaiʻi could deliver up to $45 million in additional federal food assistance to qualified Hawaiʻi residents, according to a new analysis from the University of Hawaiʻi Economic Research Organization (UHERO).

Co-authored by UHERO Assistant Professor Dylan Moore and Nate Hix of the Hawaiʻi Institute of Public Health, the report suggests that eliminating the "net income limit" for the Supplemental Nutrition Assistance Program (SNAP) could extend benefits to an additional 13,000 to 14,000 households in Hawaiʻi by 2025. This change would bring an estimated $40 million to $45 million in federal funds to the state annually.

Net income in SNAP is defined as total monthly household income after deducting certain non-food household expenses such as rent, utilities, medical costs, childcare costs and others.

Currently, Hawaiʻi imposes a net income limit on SNAP eligibility, creating a significant "benefit cliff" where households can lose thousands of dollars in benefits if their income increases by even a small amount. This cliff is one of the largest in any U.S. welfare program, potentially discouraging work and creating arbitrary differences in support for households with similar economic circumstances. The report estimates for a family of four, "falling off" the cliff will cost more than $10,000 a year in benefits-a large sum for a household that would be earning, at the very most, $69,000/year in income.

"Hawaiʻi has an opportunity to leverage federal funds to significantly improve the lives of thousands of families by adjusting our SNAP eligibility rules," Moore said. "Hawaiʻi could remove this benefit cliff by modifying its broad-based categorical eligibility (BBCE) program to make a change that has already been implemented by 28 other states."

Removing the net income limit would not require legislative action and could be enacted by the state's Department of Human Services. The proposed change would come at minimal cost to the state, which would only need to cover half of the additional administrative expenses. UHERO estimates that for every dollar spent on administration, the state could secure nearly $18 in federal benefits for its residents.

Greater flexibility for states

SNAP, formerly known as food stamps, has traditionally been governed by federal eligibility criteria. However, in 2000, changes to the program introduced greater flexibility for states through the establishment of the BBCE program. This shift allowed states to modify certain eligibility rules, such as eliminating asset limits and raising income thresholds for SNAP qualification.

Since October 2010, Hawaiʻi, like many other states, has implemented a BBCE program. This resulted in the elimination of SNAP asset limits for most Hawaiʻi residents and an increase in the "gross income limit" to twice the federal poverty line. However, unlike many other states, Hawaiʻi maintained the net income limit.

"By removing the net income test, Hawaiʻi would provide a huge benefit to families in need with minimal cost to the state. This change would eliminate arbitrary unfairness from the tax/transfer system, and to ensure that those who want to earn more money will gain rather than lose as a result of their efforts," Moore wrote. "Most policy decisions are hard. This one is not."

Read the entire report on UHERO's website.

UHERO is housed in UH Mānoa's College of Social Sciences.

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