In May 2022, consumer prices were about 8.6% higher than last year. Food and beverage prices increased by a larger amount, 9.7%, for the same time period. This was the highest monthly increase in food and beverage prices since March 1981.
The Supplemental Nutrition Assistance Program (SNAP) attempts to address malnutrition in the US by providing extra funding to low-income households with the purpose of encouraging healthier diets. However, as food prices increase, SNAP benefits lose their purchasing power. If the benefits don’t go as far, it can lead families to make concessions regarding their diets.
SNAP benefits differ depending on the number of people in the household and their income. There is a maximum benefit set by household size. The maximum benefit for a family of four is set at the cost of a market basket for a family of that size according to the Thrifty Food Plan. The benefit amount is adjusted up or down based on the number of people in the household.
The Thrifty Food Plan is a Department of Agriculture estimate of how much it costs to provide nutritious, low-cost meals for a household. Households eligible for SNAP receive the maximum benefit for their household size minus 30% of their net income. Families without income can receive the maximum benefit.
For example, in fiscal year 2022, the maximum monthly benefit for a family of four is $835. If 30% of a family’s monthly net income is $235, then they will receive $600 in monthly SNAP benefits.
In 2021, the average monthly benefit per person was $217.83, an all-time high. The average was up about 34% from 2020, when the average benefit was $162.42. This was partially due to increases in the benefits as part of pandemic aid provided in 2021.
SNAP benefit payments for the US, including territories such as Guam and the Virgin Islands, also reached an all-time high in 2021. Total benefit payments reached $108.6 billion, a 40% increase from the year before. The total cost of the program was around $113.8 billion, incorporating administrative, education, and staffing costs.
From 2013 to 2019, total yearly SNAP benefit payments decreased at an average rate of 6.5% a year. Benefits increased 32% from 2019 to 2020. This was partially due to increases in the benefits as part of pandemic aid provided in 2020 and increases in enrollment in the program.
The maximum benefit by family size is calculated from the Thrifty Food Plan once a year every June to account for changes in the cost of living. Adjustments to the maximum benefit, income eligibility, and other requirements go into effect on the first day of the fiscal year, or Oct. 1 every year.
Benefits for fiscal year 2022 were calculated in June 2021, when overall consumer prices were 5.3% higher than 2020. They do not reflect the 3.3 percentage point increase in prices from June 2021 to May 2022.
According to the current framework, the Thrifty Food Plan will be revised in June 2022 and will go into effect on Oct. 1, 2022.
During the COVID-19 pandemic, SNAP benefits were adjusted in multiple ways to help struggling families. The Families First Coronavirus Response Act, the CARES Act and the American Rescue Plan all increased SNAP funding in some way.
From January to September 2021, the maximum monthly benefit increased by 15% for every family due to a provision in a 2020 budget bill and the American Rescue Plan.
After the passage of the Families First Coronavirus Response Act, all SNAP households received the maximum benefit amount for their household size, without the usual income deductions. Households already receiving the maximum benefit did not get additional funds.
Maximum benefit SNAP households that didn’t receive additional funds through the Families First Coronavirus Response Act got an additional $95 a month after the USDA changed its interpretation of the law in April 2021.
For the other SNAP households, if their benefits increased by less than $95 a month under the Families First Coronavirus Response Act, their benefits increased up to that amount in the American Rescue Plan. This policy measure is meant to last until the end of the pandemic public health emergency.
The SNAP program also underwent changes to how benefits were calculated with the passage of the 2018 Farm bill. The Department of Agriculture was ordered to re-evaluate how it calculated foods costs through the Thrifty Food Plan. The result of the new analysis was an increase in SNAP benefits for all recipients, starting in fiscal year 2022. These changes are permanent and are not tied to the pandemic.
To learn more about inflation, household spending, and saving, visit the COVID-19 Impact and Recovery Hub.
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