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March 14, 2013

To: Health and Human Services Committee

From: Aubrey Mancuso, Policy Coordinator

RE:  Support for LB 330 to increase the gross income limit in the SNAP program

Voices for Children supports LB 330 because it takes steps to improve the SNAP program in a way that encourages steps toward longer term financial security. The SNAP program is an important work-support that helps prevent children from going hungry when their parents are struggling financially.  Recent research from the Center on Budget and Policy Priorities found that the vast majority of SNAP participants – 81% — are working or unable to work due to being elderly, disabled or under 18.  Furthermore, non-disabled adults have high work participation rates with 82% of all SNAP households in this group employed within a year on the program.[1]

LB 330 improves the SNAP program by leaving the net income requirement unchanged while increasing the gross income limit.  This change allows families who have a gross income above the current limit but have high expenses to still qualify for food assistance.

Applying the net income standards more stringently than the gross income limit ensures that only families who really need it receive this type assistance.  Eligibility is then determined based on whether or not a family’s net income, the income actually available to purchase food, is less than 100% of the federal poverty level.  For example, a single parent with one child who works 40 hours a week at $9 an hour would not qualify for SNAP under Nebraska’s current gross income limit of 130 percent of poverty.  However, if the state raised the gross income limit, she could qualify for SNAP benefits once her shelter and child care expenses are deducted.

This bill also takes steps to address one of the ongoing problems with the way our current benefit programs are structured. We know that there is a gap between the poverty line and what it takes for a family to meet all of its basic needs.  Attached to my testimony is a visual illustration of what we refer to as the “cliff effect” in public benefit programs, where families lose eligibility for public programs before they are able to make up for the loss with an equivalent increase in income. 

This is problematic because it often forces families to make a choice between accepting a small increase in earnings and not being able to feed their family or sacrificing increased earnings which could lead to greater financial stability in the long run in order to maintain program eligibility.    LB 330 begins to address this issue by allowing for greater flexibility in earnings for families who have high expenses for basic needs like child care and housing.  Other states who have enacted this change found that the majority of newly eligible families were working families with children with a gross income between 130-150% of the federal poverty level.[2]

As this committee is aware, our eligibility for child care assistance remains among the lowest in the nation and child care costs remain high.  To help buffer the impact that out-of-pocket child care expenses can have on family food budgets, Congress in 1980 created a separate deduction in the Food Stamp Program for dependent care expenses.[3]  LB 330 will assist low-income families who have high child care costs by allowing them to still qualify for the SNAP program if they receive a small increase in gross income.  This is a practical programmatic change because it encourages working families to increase their earning potential while ensuring that their children are fed as they make the transition to increased financial stability.

We urge the committee to advance this bill.  Thank you.

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