	Introduction

After over two years of deliberations, spanning the 112 th and 113 th Congresses, the Agricultural Act of 2014 (the "2014 farm bill") was enacted on February 7, 2014. While the reauthorization maintained the vast majority of prior law eligibility and benefit calculation policies, the new law does change the impact of the Low Income Home Energy Assistance Program (LIHEAP) in the calculation of SNAP monthly benefit amounts. Under the 2014 farm bill, LIHEAP can only impact a household's benefit if a household receives more than $20 a year. This policy contained in the farm bill conference agreement follows similar changes in the Senate- and House-passed bills, with the Senate passing a $10 threshold and the House passing a $20 threshold. The Congressional Budget Office (CBO) estimated that this LIHEAP-related change included in the 2014 farm bill would reduce SNAP spending by approximately $8.6 billion over the 10-year budget window of FY2014-FY2023. Detractors argue that ending the so-called "Heat and Eat" practice reduces benefits for those in need. 113-79): Summary and Side-by-Side , coordinated by [author name scrubbed]
CRS Report R43332, Reauthorization of SNAP and Other Nutrition Programs in the Next Farm Bill: Issues for the 113 th Congress , by [author name scrubbed]
CRS Report R42353, Domestic Food Assistance: Summary of Programs
CRS Report R42505, Supplemental Nutrition Assistance Program (SNAP): A Primer on Eligibility and Benefits

		SNAP Benefit Calculation, Prior Law, and the 2014 Farm Bill

			Brief Overview of SNAP Benefit Calculation8

SNAP benefits are a function of a household's size, its net (counted) monthly income, and inflation-indexed maximum monthly benefit levels (in some cases, adjusted for geographic location). LIHEAP's Role in SNAP Deductions and Benefit Calculation

In most states, SNAP programs can use LIHEAP payments as proof that households have incurred heating and cooling costs. Under prior law, if a SNAP household received a LIHEAP payment in any amount , then that household could receive a higher SNAP benefit than if the household had not received LIHEAP (assuming they did not document heating and cooling costs in some other way). The higher SUA is based on the assumption that households incur expenses for heating and cooling. Under the 2014 farm bill, without receipt of LIHEAP over $20 per year, households must document heating/cooling expenses another way or risk a reduction from what their benefit amount had been. For households with an elderly or disabled member, net monthly income equals gross monthly income minus:
The same standard , child support , earned income , and dependent care deductions noted above; Any out-of-pocket medical expenses (other than those for special diets) that are incurred by an elderly or disabled household member, to the extent they exceed a threshold of $35 a month; and An uncapped excess shelter deduction , to the extent such expenses exceed 50% of counted income after all other deductions; 2014 FARM BILL NOTE: Because the excess shelter deduction is uncapped for households with elderly or disabled members, the change to LIHEAP in SNAP benefit calculation has the potential to make a larger difference for these households. An SUA often "tips the scale" toward enabling an applicant household to qualify for an excess shelter deduction, which in many cases will result in an increased monthly benefit. "Heat and Eat" is a phrase that the low-income and hunger advocacy community has used to describe state and program policies that leverage nominal (as low as 10 cents) LIHEAP payments into an increase in households' SNAP benefits that is larger than the initial LIHEAP payment. In June 2012, the U.S. Department of Agriculture's Food and Nutrition Service (USDA-FNS) surveyed states and determined that 16 states (including the District of Columbia) had implemented or would soon implement "Heat and Eat," and one state provided the standard utility allowance based on LIHEAP application (see Text Box , below). Payments to households that are not provided for one of these purposes could be inappropriate. First, this change is expected to affect some households' SNAP benefit amounts, but it will not affect households' eligibility for SNAP benefits. Second, this change is expected to affect states that have implemented "Heat and Eat" policies. When Will States Reduce Affected Households' Benefits? The new law indicates that when a new SNAP household applies for benefits, if that is 30 days after the law's enactment, the benefits will be calculated based on the $20 threshold rule, but for households already receiving SNAP it will be only when they apply to recertify that their benefit calculation will be subject to the $20 rule. This recertification scenario, though, is subject to a state's decision to delay implementation. If a household can document heating or cooling costs in another way, then the higher SUA can continue to be included in the household's excess shelter deduction even if the household does not receive more than $20 of LIHEAP assistance. 3102 . The total number will also depend on whether households are able to document their utility costs in other ways.
The Agricultural Act of 2014 ("the 2014 farm bill") was enacted on February 7, 2014. Included in the law's reauthorization of the Supplemental Nutrition Assistance Program (SNAP) is a change to how Low Income Home Energy Assistance Program (LIHEAP) payments are treated in the calculation of SNAP benefits. This change is expected to reduce some households' monthly benefit amounts, particularly households in states that have adopted the so-called "Heat and Eat" practice, where states leverage a nominal LIHEAP benefit into a larger SNAP benefit. The Congressional Budget Office (CBO) estimated that this change will reduce SNAP spending by approximately $8.6 billion over the 10-year budget window of FY2014-FY2023. Based on CBO's May 2013 baseline, this is approximately a 1% reduction in forecasted program spending over the 10-year period.
SNAP law provides for both eligibility rules and, for eligible households, benefit calculation rules. The SNAP statute allows for certain deductions from income when calculating a household's monthly benefit amount; one of these deductions is the "excess shelter deduction," which incorporates utility costs. If a family incurs heating and/or cooling expenses, this deduction from income can be higher than for households not incurring these expenses, allowing for a higher SNAP benefit for the household. One way households can document heating and cooling expenses is by showing receipt of LIHEAP assistance. Under prior law, any amount of LIHEAP assistance could increase benefit amounts; under the 2014 farm bill change, LIHEAP assistance will have to be greater than $20 per year in order to be included in a household's benefit calculation.
In SNAP benefit calculation, a LIHEAP payment documents that the household has incurred heating and cooling costs. This documentation triggers a standard utility allowance (SUA), a figure intended to represent typical state-specific utility costs, which enters into the SNAP benefit calculation equation. (Most states use an SUA, but some opt not to and use only actual utility costs.) Unless the household is receiving the maximum SNAP benefit already, a household's monthly benefit can increase if the inclusion of an SUA results in an excess shelter deduction. Proof of heating or cooling expenses will trigger a higher SUA than proof of only telephone or water expenses. The higher SUA then gets factored into the calculation of a household's excess shelter deduction. In many cases, the higher the excess shelter deduction, the higher the monthly SNAP benefit will be.
The 2014 farm bill's change is expected to impact the "Heat and Eat" practice. Approximately 16 states provide nominal LIHEAP benefits through a "Heat and Eat" practice. "Heat and Eat" is a phrase that the low-income and anti-hunger advocacy community has used to describe state and program policies that leverage nominal (as little as 10 cents) LIHEAP payments into an increase in households' SNAP benefits that is larger than the initial LIHEAP payment. Also, a 17th state allows SNAP applicants to benefit from an SUA if the household applies for LIHEAP. Thus, the farm bill is expected to change 17 states' administration of SNAP and is expected to reduce some households' benefit amounts.
The 2014 farm bill's change in the law will require more than $20 a year in LIHEAP assistance in order to trigger the potential increase in benefits. The exact implementation timeline, details, and share of households affected will depend upon the U.S. Department of Agriculture Food and Nutrition Service's (USDA-FNS) interpretation and implementation of the policy, the options states choose in their implementation, and the share of households that will be able to document their heating and cooling expenses in other ways.
Congress's final decision to change the law came after the passage of related proposals in both the House and the Senate. The 113th Congress's Senate-passed farm bill (S. 954) would have set a $10 threshold for LIHEAP payments to confer this potential advantage. The House-passed farm bill (H.R. 2642 combined with H.R. 3102) included the $20 threshold.