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USDA aims to close food stamps loophole exposed by MN man

The department will tighten requirements after a Minnesota man claimed SNAP benefits despite being a millionaire.

The U.S. Department of Agriculture proposed a rule Tuesday that would close a food stamps loophole that allowed a Minnesota man to receive the benefits despite being a millionaire.

According to a press release from the USDA, the proposed change would end automatic eligibility for the Supplemental Nutrition Assistance Program (SNAP) for individuals already receiving minimal government assistance from other programs.

The USDA claims this would close a loophole that allows individuals with sufficient income and assets to enroll in the program.

“The American people expect their government to be fair, efficient, and to have integrity – just as they do in their own homes, businesses, and communities. That is why we are changing the rules, preventing abuse of a critical safety net system, so those who need food assistance the most are the only ones who receive it,” said U.S. Secretary of Agriculture Sonny Perdue in a statement.

This loophole was brought to national attention after Minnesota man Rob Undersander, a self-described millionaire, said he was able to claim SNAP benefits for 19 months.

Despite taking money from a Roth IRA, which is not included in income eligibility standards because it's drawn tax-free in retirement, Undersander enrolled in the program to prove a point to a Minnesota House committee in 2018.

The display received significant backlash from lawmakers, while others called for reform of the state’s SNAP eligibility requirements.

What will change?

Currently applicants must have an income of less than 165 percent the federal poverty limit to be approved for SNAP.

The USDA’s proposal establishes guidelines for how long a household must receive other government assistance and how much assistance they must receive before being automatically eligible for food stamps.

In order to qualify for SNAP, a household must have received Temporary Assistance for Needy Families (TANF) cash or non-cash benefits valued at a minimum of $50 per month for at least 6 months. 

According to the USDA, some states allow individuals who receive minimal benefits, which could include something as simple as receiving an information brochure, to enroll in SNAP without regard to certain sources of income or assets.

The proposed change by the USDA would remove 3 million people from SNAP eligibility.

Per the Washington Post, Sen. Debbie Stabenow (D.-Mich), ranking Democrat on the Senate Agriculture Committee, pushed back against the proposed changes.

“This proposal is yet another attempt by this Administration to circumvent Congress and make harmful changes to nutrition assistance that have been repeatedly rejected on a bipartisan basis,” Stabenow said in a statement. "This rule would take food away from families, prevent children from getting school meals, and make it harder for states to administer food assistance.'

According to the Center on Budget and Policy Priorities, 8 percent of Minnesotans used SNAP in Fiscal Year 2017. Of those individuals, 35 percent had an income at or below 50 percent of the poverty level, 42 percent had an income of between 51 and 100 percent of the poverty level, and 23 percent had an income above 100 percent of the poverty level. 

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