TANF-ACF-PA-1997-03 (States' Option to Issue Food Stamp Benefits to Certain Individuals Made Ineligible by Welfare Reform)
State Agencies Administering Approved Public Assistance Plans And Other Interested Parties
States' Option to Issue Food Stamp Benefits to Certain Individuals Made Ineligible by Welfare Reform
Section 6(o)(2) (as amended by section 824 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) (Pub. L. 104-193)) and section 7 (as amended by the 1997 Emergency Supplemental Appropriations Act, title VII (Pub. L. 105-18)) of the Food Stamp Act of 1977 (7 U.S.C. 2015, 2016), sections 402 and 403 of PRWORA (8 U.S.C. 1612 or 1613)
A number of States have inquired about the use of State funds or Federal TANF funds to pay the costs of an optional food stamp program. Specifically, States asked: (1) whether State funds spent to provide food assistance under the State's optional food stamp program count toward the State's TANF maintenance of effort (MOE) requirement; or, (2) whether a State may use Federal TANF funds to purchase food stamps for the State's optional food stamp program. This policy announcement responds to these issues.
The 1997 Emergency Supplemental Appropriations Act (Pub. L. 105-18), enacted on June 12, 1997, amended section 7 of the Food Stamp Act of 1977 (7 U.S.C. 2016) to give States the authority to purchase food stamps from the Federal government for use in a State-funded food assistance program to assist qualified aliens and certain able-bodied adults. The Supplemental Appropriations Act specifically provides that "a State agency may, with the approval of the Secretary (of the Department of Agriculture (U.S.D.A)), issue benefits under this Act (Food Stamp Act) to an individual who is ineligible to participate in the Federal food stamp program solely as a result of section 6(o)(2) of this Act or section 402 or 403 of the PRWORA of 1996 (8 U.S.C. 1612 or 1613)."
Participating State agencies must pay the Secretary of U.S.D.A. an amount that is equal to the value of the food stamp benefits, as well as the costs of printing, shipping, and redeeming coupons, and other Federal costs, incurred in providing the benefits to the State, as determined by U.S.D.A. Participating States are not eligible for Federal reimbursement under the Food Stamp Act of administrative and other costs incurred in issuing a benefit under this State-funded program. Basically, participating States must bear the full costs of operating this program.
Use of State Funds. State funds may be used to provide food stamp benefits to members of eligible families for purposes of PRWORA. State funds used in a separate State program or segregated TANF program and spent to provide food assistance to an individual who is ineligible to participate in the Federally-funded food stamp program solely as a result of the time limits in section 6(o)(2) of the Food Stamp Act as amended by section 824 of PRWORA or to a qualified alien who is ineligible solely as a result of sections 402 and 403 of PRWORA meet the standard provided in section 404(a)(1) of the Social Security Act (Act). Such assistance is reasonably calculated to accomplish the purpose of title IV-A of the Act. Individuals made ineligible solely by sections 402 and 403 consist of certain qualified aliens, while those made ineligible solely as a result of time limits in section 6(o)(2) of the Food Stamp Act consist of able-bodied adults, ages 18 through 50, who do not have responsibility for a child (as defined by the State) living in the household. Such individuals are known as able-bodied adults without dependent children (ABAWDs).
However, only that part of the State's total expenditures used to provide State-funded food stamp benefits to members of eligible families counts toward the State's TANF MOE requirement. At minimum, an eligible family consists of at least one child living with his/her parent or other adult caretaker relative (or a pregnant individual), and the family's income and resources must be within the eligibility criteria established by the State under its TANF plan. Beyond this, States may determine who else is included as a member of an eligible family. Thus, an eligible family may very well include a qualified alien, a noncustodial parent or other adult relative living in the home (possible ABAWDS).
Therefore, not all participants in the State-funded food stamp program will be members of eligible families. Expenditures to provide food stamp benefits to individuals who are not members of eligible families do not count toward the State's TANF MOE. Accordingly, States electing to provide State-funded food stamp benefits must ensure that only those expenditures to assist eligible families under the State's TANF criteria have been allocated toward meeting the TANF MOE requirement. Administrative costs of such food assistance may be included, so long as the total amount of administrative costs for all activities described under section 409(a)(7)(B)(i)(I) of the Act does not exceed 15 percent of the total amount of qualified expenditures for the fiscal year.
Further, it is important to note that none of the funds expended for or on behalf of eligible families to provide food stamp benefits count if the money originated from Federal funds; was also used to support claims for Federal matching funds; or, was also used as an expenditure which the State made as a condition of receiving Federal funds under other programs.
Finally, when State funds are co-mingled with Federal funds, they are treated as Federal funds and are subject to the rules, which follow regarding use of Federal TANF funds.
Use of Federal TANF Funds. Subject to the limitations in the Food Stamp Act, discussed below, a State may use its Federal TANF funds to provide food assistance to qualified aliens or certain ABAWDs who are already receiving TANF but who are ineligible to receive Food Stamps because of PRWORA. Such assistance is reasonably calculated to accomplish the purpose of title IV-A of the Act.
Because of the interaction between the 60-month limitation on the receipt of Federally-funded TANF benefits and section 8(b) of the Food Stamp Act, States may not use Federal TANF funds to provide food assistance to qualified aliens or certain ABAWDs who are eligible to receive but who are not receiving TANF. When Federal TANF funds are used to purchase such food assistance, then the food assistance also becomes TANF assistance and the recipients of the food stamps are subject to all of the TANF requirements, including the 60-month limitation on the receipt of Federally-funded TANF benefits.
Such food assistance would also be considered a benefit provided under the Food Stamp Act. Section 8(b) of that Act prohibits any participating State or political subdivision from decreasing "any assistance otherwise provided to an individual or individuals because of the receipt of benefits" under the Food Stamp Act. Should a family receive only food assistance benefits, paid for with Federal TANF funds, then the length of time the family receives these benefits will have the effect of "decreasing" the other forms of TANF assistance the family could receive due to the 60-month cumulative time limit on the receipt of Federally-funded TANF benefits. For example, if a family received six months of food assistance, purchased with Federal TANF funds, and then two years later needed TANF cash assistance, the family would be eligible only for 4 1/2 years of TANF assistance. This violates section 8(b) of the Food Stamp Act. Therefore, such benefits may be purchased with TANF funds only for families who receive some other form of TANF assistance.
Finally, none of the Federal TANF funds used to purchase the Food Stamps counts toward meeting the TANF MOE requirement. Also, none of the Federal TANF funds may be used to establish a separate State Food Stamp Program.
Inquiries should be addressed to the appropriate Administration for Children and Families Regional Administrator.
Office of Family Assistance