‘Huge relief’: SNAP policy change will help tens of thousands of additional Hawai‘i families

A policy change by the state prompted by a new analysis by the University of Hawai‘i Economic Research Organization will help feed tens of thousands of additional struggling households in the islands.

Hawai‘i will eliminate the “net income limit” for the Supplemental Nutrition Assistance Program, or SNAP, commonly called food stamps, which could extend benefits to 13,000 to 14,000 more households throughout the state by next year.

Gov. Josh Green’s office said Monday that those households would be eligible for an average of $3,200 a year in SNAP benefits.

The rule shift is estimated to bring in up to an extra $45 million in federal funds annually to the state for the program.

“This is going to provide a huge relief for our working class families who are struggling with Hawai‘i’s highest-in-the-nation cost of living,” said Green. “In identifying a critical opportunity for our SNAP program, [the University of Hawai‘i Economic Research Organization’s] research team is enabling us to make much-needed changes to our social welfare system so that families living from paycheck to paycheck can afford to put more food on their tables.”

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

Hawaiʻi now 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 University of Hawai‘i Economic Research Organization 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 earning, at the most, an income of $69,000 a year.

“Hawaiʻi has an opportunity to leverage federal funds to significantly improve the lives of thousands of families by adjusting our SNAP eligibility rules,” said report co-author and University of Hawai‘i Economic Research Organization assistant professor Dylan Moore. “Hawaiʻi could remove this benefit cliff by modifying its broad-based categorical eligibility program to make a change that has already been implemented by 28 other states.”

Nate Hix of the Hawaiʻi Institute of Public Health was the study’s other co-author.

SNAP is one of the largest welfare programs available to low-income families in the islands.

A family of four can receive as much as $1,759 a month in SNAP benefits, and in a typical month, the total value of SNAP benefits in Hawai‘i exceeds $60 million.

The program’s eligibility criteria were controlled for decades by the federal government.

Following changes in 2000, states were given more flexibility to adjust their eligibility rules by establishing a program of “broad-based categorical eligibility.”

Through this new eligibility standard, states were able to eliminate asset limits, preventing households with high savings from receiving SNAP benefits.

Broad-based categorical eligibility also allows states to raise limits on the amount of income households can receive and still qualify for SNAP.

Before this policy change, households needed to have a net income below the federal poverty line to qualify for SNAP benefits.

Removing the net income limit does not require legislative action and can be enacted by the Hawai‘i Department of Human Services.

The proposed change will also come at minimal cost to the state, which will only need to cover half of the additional administrative expenses.

In 2019, Hawai‘i’s share of SNAP administrative costs was only about 5.6% of the amount of benefits the state paid out to families.

The University of Hawai‘i Economic Research Organization estimates that for every dollar spent on administration, the state can secure nearly $18 in federal benefits for its residents.

Moore said the decision to eliminate the net income limit has far-reaching implications, including further increasing benefit payments by making it easier for households to understand whether they are eligible.

“By removing the net income test, Hawaiʻi would provide a huge benefit to families in need with minimal cost to the state,” Moore wrote. “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.

“Most policy decisions are hard. This one is not.”