Insurance Settlements: Snap Income Impact

Whether an insurance settlement is considered income for SNAP benefits depends on the type of benefits being received. If the benefits are need-based, a financial windfall could adversely affect eligibility. For instance, in the United States, SNAP benefits are considered need-based, and a large insurance settlement could lead to a suspension or termination of these benefits. However, if the benefits are based on age or disability and funded through work history, an insurance settlement typically won't impact eligibility.

SNAP income limits

To be eligible for SNAP benefits, your household must meet certain requirements, including resource and income limits. The SNAP income eligibility limits are as follows:

• Gross monthly income (130% of poverty)
• Net monthly income (100% of poverty)
• Each additional member

The specific income limits depend on the size of your household and are higher in Alaska and Hawaii. For a household of one person, the gross monthly income limit is $1,287, and the net monthly income limit is $990. For a household of two people, the gross monthly income limit is $1,736, and the net monthly income limit is $1,335. For a household of three people, the gross monthly income limit is $2,184, and the net monthly income limit is $1,680. For a household of four people, the gross monthly income limit is $2,633, and the net monthly income limit is $2,025. For a household of five people, the gross monthly income limit is $3,081, and the net monthly income limit is $2,370. For a household of six people, the gross monthly income limit is $3,530, and the net monthly income limit is $2,715. For a household of seven people, the gross monthly income limit is $3,980, and the net monthly income limit is $3,061. For a household of eight people, the gross monthly income limit is $4,430, and the net monthly income limit is $3,407. For each additional member, add $451 to the gross monthly income limit and $347 to the net monthly income limit.

It's important to note that households with an elderly or disabled member only have to meet the net income limit. Additionally, certain resources are not counted when determining eligibility for SNAP, such as resources of individuals who receive Supplemental Security Income (SSI) or Temporary Assistance for Needy Families (TANF).

SNAP resource limits

SNAP, or the Supplemental Nutrition Assistance Program, is a federal program that provides food benefits to qualifying individuals and families. To be eligible for SNAP benefits, your household must meet certain requirements, including resource and income limits. These limits are updated annually and vary depending on the state in which you live and the composition of your household. Here is an overview of the SNAP resource limits:

Resource Limits for SNAP:

As of October 1, 2023, through September 30, 2024, the resource limits for SNAP are as follows:

• Households without a member aged 60 or older or with a disability: $2,750
• Households with at least one member aged 60 or older or with a disability: $4,250

These amounts are considered "countable resources," which generally include cash or money in a bank account. However, certain resources are not counted when determining eligibility for SNAP:

• Resources of individuals receiving Supplemental Security Income (SSI)
• Resources of individuals receiving Temporary Assistance for Needy Families (TANF), also known as welfare
• Most retirement and pension plans (withdrawals may count as income or resources, depending on frequency)

Additionally, vehicles are considered a resource for SNAP purposes, but there are specific exemptions. Licensed vehicles are not counted if they meet certain criteria, such as being used for income-producing purposes, being needed for long-distance travel for work, or if the sale of the vehicle would result in less than $1,500. The fair market value and equity of licensed vehicles are also considered when determining their value as a resource.

State Variations and Additional Considerations:

It's important to note that SNAP resource limits can vary by state, and some states have adopted broader categorical eligibility, allowing for higher income and resource limits. Therefore, it's essential to check the specific guidelines for your state.

Furthermore, while insurance settlements are generally not considered income for SNAP purposes, a large personal injury settlement or insurance settlement may impact your eligibility for need-based government benefits, including SNAP. If the settlement results in exceeding the income and resource limits, it could lead to a temporary lapse or termination of benefits.

SNAP work requirements

General Work Requirements

If you are aged 16-59 and able to work, you will need to meet the general work requirements to receive SNAP benefits. These include:

• Registering for work
• Participating in SNAP Employment and Training (E&T) or workfare if assigned by your state SNAP agency
• Taking a suitable job if offered
• Not voluntarily quitting a job or reducing your work hours below 30 hours a week without a good reason

You are exempt from the general work requirements if any of the following apply:

• You are already working at least 30 hours a week or earning a wage equal to 30 hours multiplied by the federal minimum wage
• You meet the work requirements for another program (e.g. TANF or unemployment compensation)
• You are caring for a child under 6 or an incapacitated person
• You are unable to work due to a physical or mental limitation
• You are regularly participating in an alcohol or drug treatment program
• You are studying at least half-time (college students are subject to other eligibility rules)

Able-Bodied Adults Without Dependents (ABAWD) Work Requirements

If you are aged 18-52, able to work, and have no dependents, you will need to meet the ABAWD work requirements to get SNAP for more than 3 months in a 3-year period. To meet these requirements, you must do one of the following:

• Work at least 80 hours a month (this can be paid work, unpaid work, volunteering, or work in exchange for goods or services)
• Participate in a work program for at least 80 hours a month (this could be SNAP Employment and Training or another federal, state, or local work program)
• Participate in a combination of work and a work program for a total of at least 80 hours a month
• Participate in workfare for the number of hours assigned to you each month (this depends on the amount of your SNAP benefit)

From October 1, 2024, these rules will apply to people aged 18-54.

You are exempt from the ABAWD work requirements if any of the following apply:

• You are unable to work due to a physical or mental limitation
• You have someone under 18 in your SNAP household
• You are exempt from the general work requirements (see above)
• You are experiencing homelessness
• You are aged 24 or younger and were in foster care on your 18th birthday

If you fail to meet the ABAWD work requirement, you will lose your benefits after 3 months. To regain SNAP benefits, you must meet the ABAWD work requirement for a 30-day period or become exempt. Otherwise, you will need to wait until the end of your 3-year period to receive another 3 months of benefits.

SNAP eligibility for non-citizens

SNAP eligibility is not limited to US citizens. Non-citizen groups within the US may be eligible for SNAP based on their immigration status as a qualified alien.

Qualified Alien Categories

• Hmong or Highland Laotian tribal members
• American Indians that are part of federally recognized tribes that were born in Canada but reside in the United States
• Iraqi and Afghan immigrants that were granted special status due to their work on behalf of the US in their respective countries
• Victims of trafficking that fall under the protection of the Trafficking Victims Protection Act of 2000
• Refugees recognized by the US
• Cuban or Haitians that qualified under the Refuge Education Assistance Act of 1980
• Battered Non-Citizens, which includes battered spouse, child, parent of battered children, or child or battered parent
• Individuals given conditional entry into the US
• Those granted asylum under the Immigration and Nationality Act (INA)
• Individuals that have had their deportation withheld under the INA
• Those that have been paroled into the US for at least one year
• Lawfully permanent residence, which are non-citizens with green cards

Conditions for Qualified Aliens to be Eligible for SNAP

To be eligible for SNAP, qualified aliens must also meet at least one of the following conditions:

• Have a US military connection
• Be born on or before August 22, 1931
• Have minor children under 18
• Have an LPR with credit for 40 qualifying work quarters
• Receive benefits for being blind or disabled
• Have lived in the US for at least 5 years

Non-Citizen Groups Ineligible for SNAP

While the above categories cover a lot of people, there are non-citizen groups that are ineligible for SNAP due to their citizenship status. Members of these groups are ineligible unless they are able to change their immigration status, which depends entirely on their individual situations.

For example, students and individuals with an H-1B Visa or a U Visa are not eligible. Undocumented non-citizens and people in the country on Temporary Protection Status are also not eligible. Finally, people coming from countries under the Compact of Free Association Agreements do not qualify. This includes people from Palau, Micronesia, and the Marshall Islands.

SNAP deductions

• Earned Income Deduction: You can deduct 20% of your total earned income, including wages, salary, and commissions.
• Standard Deduction: This depends on the size of your household. For a household of one to three members, the deduction amount is $155, while for a household of four, it is $163. The amount varies for larger households.
• Dependent Care Deduction: If you need to pay for personal care for children, elderly, or disabled members of your household so that you can work, you can deduct these costs. Please note that pet care is not an allowable deduction.
• Medical Expense Deduction: Certain medical costs for elderly and disabled household members can be deducted. This includes out-of-pocket expenses exceeding $35 per month that are not covered by insurance, but it typically excludes office co-pays.
• Child Support Payments Deduction: Legally owed child support payments can be deducted, but you must provide copies of court documents verifying this obligation.
• Homeless Shelter Deduction: If you are homeless and living in a shelter, some states allow you to deduct shelter costs. Be sure to note this on your application and check if your state offers this deduction.
• Approved Shelter Costs Deduction: If your shelter costs (including rent, mortgage, utilities, etc.) exceed half of your household's net income after the other deductions, you can deduct the excess amount. However, this deduction is limited to $504 unless you reside in Alaska or Hawaii, where the cost of living is higher.

These deductions are essential in determining your eligibility for SNAP benefits and calculating the amount of benefits you will receive. Remember, the lower your net income after deductions, the more likely you are to qualify for SNAP. Additionally, you can contact your local SNAP office to clarify any specific deductions that may apply to your situation.

Frequently asked questions