For more business and finance explainers, check out our Yahoo U page.
In 1964, President Lyndon B. Johnson signed the Food Stamp Act into law, which created a permanent program to improve nutrition among America’s lowest-income and impoverished households.
Although the program is now called the "Supplemental Nutrition Assistance Program” (SNAP), its mission remains the same: helping millions of Americans stave off hunger as they look for jobs or work existing ones.
SNAP is currently operated at the national level by the U.S. Department of Agriculture, with individual states doing the on-the-ground work of distributing the program.
Who is eligible for SNAP?
Eligibility for SNAP varies state-to-state. But broadly speaking, an applicant must clear three tests evaluating a household’s income, resources, and work status.
The first test is monthly income: broadly speaking, a household cant have gross monthly income above 130% the federal poverty level.
The poverty line of comparison will vary depending on how many people are in the household. Larger families, for example, are benchmarked against a higher poverty line than smaller families.
The second test is a count of a household’s "resources." These would be assets that aren't a home or, in most cases, a car. Money held at the bank or cash on hand, for example, would be counted as resources. As of 2021, the threshold for resources is $2,250.
The third is a work requirement. Those without a job can be eligible for SNAP if they are registering for work and did not voluntarily quit a previous job. However, those without jobs will only be entitled to receive SNAP benefits for more than three months in a three-year period.
To be eligible for SNAP benefits beyond the three-month limit, able-bodied adults without dependents have to work for at least 20 hours a week. States have some flexibility with the limit and can suspend it in areas with high and sustained unemployment.
The amount in SNAP benefits allocated to a household will depend on that household’s net income and household size.
How is SNAP used?
SNAP used to be administered via physical bills printed by the U.S. Treasury. But the government began phasing out the “stamps” in favor of debit-like electronic benefit transfer (EBT) cards. By July 2004, the entire country had transitioned to EBT for sending out SNAP benefits.
Users can use EBT cards at SNAP retailers like supermarkets or grocery stores. But EBT cards can only be used for certain types of purchases.
For example, EBT funds cannot be used for alcohol, tobacco, or hygiene items. The USDA also prohibits the use of SNAP for hot foods, medicines, pet foods, or cleaning supplies.
How many Americans use SNAP?
As of 2019, almost 36 million Americans participated in the SNAP program in 2019 — nearly 11% of the entire U.S. population.
The count of SNAP participants tend to track very closely with the amount of Americans in poverty.
For example, out of the Great Financial Crisis, the amount of people on SNAP grew faster than the amount of people in poverty. By 2015, the amount of people in poverty and the amount of people on SNAP were about the same: 46 million.
This dynamic makes SNAP countercyclical. By design, the program is supposed to cover more people during economic downturns, when people may have lost their jobs but still have families to feed.
Read and watch more of Yahoo U here
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.