Cap on Food Stamp Shelter Deduction:
Summary of Current law

• In order to allow food stamp allotments to more accurately reflect actual household need, the Food Stamp Program takes into account a household's shelter expenses when determining the household's food stamp allotment. The Program does this by allowing households to deduct shelter costs from their income. Current food stamp rules, however, cap the amount of shelter costs non-elderly, non-disabled households may deduct.

• In 1993, Congress enacted a phased-in elimination of the shelter deduction cap, scheduled for full implementation by January 1, 1997. The 1996 welfare reform act repealed this provision, maintaining a cap on the shelter deduction for most households with children. Legislation enacted in late 2000 raised the cap to its current level.

• Congress set the cap on the shelter deduction at $340 in March 2001. It is adjusted periodically for inflation with the current FY 2006 cap set at $400.¹

• The shelter deduction cap impacts families with high shelter costs, whose food stamp allotments do not accurately reflect their actual need. Such families are often forced to choose between paying rent and feeding their children.

• Roughly 1.3 million households receive lower food stamp benefits because of the shelter deduction cap; over 1 million of these are households with children.²

• Poor families often face high shelter costs and must divert resources from food and other household needs. In 1999, more than half (52 percent) of households with incomes low enough to qualify for food stamps (130% of poverty) incurred shelter costs that exceeded half of their income. Three quarters (75 percent) of households with incomes low enough to qualify for food stamps paid over 30 percent of their income on housing costs. Seventy-three percent of households with children that have incomes low enough to qualify for food stamps paid over 30 percent of their income for shelter.³

²USDA-FNS Office of Analysis, Nutrition and Evaluation, “Characteristics of Food Stamp Households, Fiscal Year 2004,” September 2005. For more information see Report Summary and Entire Report.

³Center on Budget and Policy Priorities, “The Food Stamp Shelter Deduction: Helping Households with High Housing Burdens Meet Their Food Needs,” June 2002 (data from The American Housing Survey for the United States in 1999, U.S. Bureau of the Census and U.S. Department of Housing and Urban Development).

Printer friendly version