Promoting Savings at Tax Time: SNAP Outreach Edition

Last week, the National Community Tax Coalition, Community Tax Aid, and D.C. Hunger Solutions hosted a webinar about the role of Supplemental Nutrition Assistance Program (SNAP/formerly food stamps) outreach at Volunteer Income Tax Assistance (VITA) sites as an asset building strategy. Many low-income workers who are eligible for SNAP are not receiving benefits, and there is a significant overlap between this population and those seeking free tax preparation assistance. Consequently, VITA sites are ideal locations for conducting SNAP outreach. The presentation provided yet another example of the importance and efficiency of integrating services and coordinating programs targeted at households with similar characteristics. Volunteers at D.C. tax prep sites are able to both prescreen clients for eligibility and provide assistance with applications in a short time frame, which reflects the benefits of D.C.’s recent moves to streamline its SNAP eligibility determinations.  

Every year, the USDA releases two sets of SNAP participation figures: a percentage for the entire eligible population, and a percentage for the eligible “working poor.” In 2009, the participation rate among the general population was around 72%, compared to a mere 60% among the working poor. This trend is consistent with previous years, and in some states the disparity is much greater. In D.C., for example, while 86% of the general eligible population receives SNAP, only 41% of eligible working families are getting benefits.

As explained in the webinar, there are a number of reasons why SNAP participation is lower among working people. First, one of the common myths about SNAP eligibility is that the program is reserved for people who are unemployed; in fact, 41% of SNAP households receive income from a job. Second, in some states, the application process poses barriers to potential applicants who can’t take time off of work to come into the food stamp office. Although many states have now lifted or temporarily waived the in-person interview requirement, many would-be applicants may not be aware that they have the option to interview over the phone.

Low SNAP participation among eligible working households has significant implications for those households’ savings and financial security. As D.C. Hunger Solutions’ Jessica Luna explained during the webinar, families struggling to make ends meet often cut back spending on food when rent or utility bills are looming. One of the benefits of SNAP is that it ensures that families still have sufficient money to buy groceries while freeing up income to go toward other non-negotiable expenses. Yet ten to fifteen percent of VITA clients indicate that purchasing food will be a primary use of their tax refund. If these families were receiving SNAP, their tax refund could instead form the basis for an emergency fund or go toward saving for college, retirement, or some other long-term purpose. Moreover, low-income families that access both SNAP and tax credits can significantly boost their income; for example, a mother of three working full-time for minimum wage can increase her income from $14,500 to $27,378 by participating in SNAP and claiming the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC).

So it’s clear that promoting SNAP participation among low-income workers makes sense – but how does it work? With the D.C. Hunger Solutions model, trained volunteers provide prescreenings and application assistance to VITA clients while they are waiting to get to meet with their tax preparer. Because the clients are prepared to fill out their tax forms, they already have documentation of their income on-hand. As noted during the webinar, the only information essential to determining if a family in D.C. is eligible for SNAP is the household size and income. The relative simplicity of the eligibility criteria makes it possible for a volunteer outreach worker to both determine if a client is likely eligible for SNAP and assist them with completing the application, all during the time they’re waiting to meet with a VITA volunteer.

This efficiency speaks to the success of simplified and streamlined eligibility determinations. By contrast, if D.C. still had an asset test in place for its SNAP applicants, the process of assessing eligibility would likely be far more time-consuming and error prone. Furthermore, VITA clients don’t typically arrive to their appointments with car titles, bank statements and insurance policies – all information that may be required to determine if an applicant is asset-eligible for benefits. I’ve previously written about how eliminating asset tests reduces red tape and increases the efficiency of health and human services agencies. The partnership between SNAP outreach and VITA sites provides an example of a secondary benefit of this policy change, as the simplification of the application process enables volunteers to conduct effective, efficient outreach and connect more eligible families to benefits.

D.C. Hunger Solutions and Community Tax Aid are doing great work here in D.C. to connect and encourage savings at tax time, which is a priority of the Asset Building Program. To coordinate a partnership between a VITA site and SNAP outreach in your area, check out these directories of anti-hunger organizations and free tax preparation sites near you.