oversight

Food Stamp Program: Alternative Definitions of a Household for Food Stamp Eligibility

Published by the Government Accountability Office on 1990-08-23.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                   .
                        Cnited   States   General   Accounting   Office
                        Report to Congressional Requesters
GAO

August   1990
                        FOOD STAMP
                        PROGRAM
                         Alternative Definitions
                         of a Household for      ’
                         Food Stamp Eligibility




                   RESTRICTED--      Not to be released outside the
                   General Accounting OfTice unless specitically
                   approved by the CKfke of Congressional
                   Relations.


 GAO/RCED-90-137
Resources, Community, and
Economic Development Division

B-239562

August 23,199O

The Honorable Patrick J. Leahy, Chairman
The Honorable Richard Lugar, Ranking Minority Member
Committee on Agriculture, Nutrition, and Forestry
United States Senate

The Honorable Tom Harkin, Chairman
Subcommittee on Nutrition and Investigations
Committee on Agriculture, Nutrition, and Forestry
United States Senate

The Honorable Charles Hatcher, Chairman
Committee on Domestic Marketing, Consumer Relations
  and Nutrition
Committee on Agriculture
House of Representatives

In response to your requests, this report (1) describes how the household definition evolved
into its current complex form, (2) discusses whether the current household definition
contributes to homelessness in America, and (3) provides a range of alternative definitions
and discusses their potential effects on participation and benefit payments, homelessness,
and program simplicity.

As arranged with your offices, unless you publicly announce its contents earlier, we plan no
further distribution of this report until 7 days after the date of this letter. At that time, we
will send copies of this report to the appropriate House and Senate committees and
subcommittees; interested members of the Congress, the Secretary of Agriculture; the
Director, Office of Management and Budget; and other interested parties.

If you have any questions regarding this report, please contact me at (202) 275-5138. Major
contributors to this report are listed in appendix IV.




John W. Harman
Director, Food and
  Agriculture Issues
Executive Summ~


                   The Food Stamp Program is the nation’s largest food assistance pro-
Purpose            gram, costing the federal government about $13 billion and serving 7.2
                   million households (an average of 18.8 million people per month) in
                   fiscal year 1989. Food stamp benefits are provided to households rather
                   than to individuals; thus, a key factor in determining applicants’ eligi-
                   bility and benefits is how the household is defined.

                   At the request of the Chairmen of a congressional committee and two
                   subcommittees and a Ranking Minority Member of a committee, this
                   report (1) describes how the definition of “household” evolved into its
                   current complex form; (2) discusses whether the current definition con-
                   tributes to homelessness in America; and (3) provides a range of alterna-
                   tive definitions and discusses their potential effects on participation and
                   benefit payments, homelessness, and program simplicity.


                   The Food Stamp Program’s benefits are allocated according to the size
Background         and economic resources of a household. According to the Food Stamp
                   Act, a household is defined generally as persons living together who cus-
                   tomarily purchase and prepare their food together. However, spouses,
                   parents and their children, and siblings who live together are considered
                   to be a household whether they purchase and prepare their food
                   together or not. The household definition is complicated by exceptions
                   to this general definition that allow groups such as the elderly, disabled,
                   and adults and their minor children who live with parents or siblings to
                   form separate households.

                   Identifying the composition of a household is important because it estab-
                   lishes whose income and assets are counted when determining the
                   household’s eligibility and benefits. It is usually advantageous for per-
                   sons to apply separately for food stamps because the household income
                   and asset limits and benefit levels favor single-person households over
                   group households.


                   Since 1964, the Food Stamp Program’s definition of a household has
Results in Brief   been changed many times by the courts and the Congress. These changes
                   have resulted in a definition that is complex. Although the current defi-
                   nition of a household could provide a disincentive to share housing by
                   requiring certain individuals to apply for food stamps together, experts
                   on homelessness told GAO that they were unaware of any cases in which
                   the current definition caused homelessness.

                                        .

                   Page 2                   GAO/RCED9@137   Food Stamp Household   Definition   Alternatives
                        Executive   Summary




                        GAO  developed a range of alternative definitions by adding, deleting, or
                        replacing a limited number of provisions from the current definition.
                        Used in various combinations, these provisions would either restrict or
                        expand participation in the Food Stamp Program. Although some alter-
                        natives appear to simplify the definition, they could complicate benefit
                        calculations or application procedures and/or increase costs. Other alter-
                        natives increase eligibility for some groups while reducing it for others
                        andfor remove disincentives for siblings or adult children and their par-
                        ents to share housing. Removing these disincentives by allowing individ-
                        uals to form separate food stamp households would reduce the
                        possibility that the definition of a household contributes to homeless-
                        ness. However, none of our alternatives simplify program administra-
                        tion without reducing participation or increasing benefit costs. Two
                        alternatives simplify program administration and only slightly increase
                        participation and benefit costs.



Principal Findings

Evolution of the        Since 1964, when the program began, the definition of a household has
                        changed several times and has become more complex. In 1971, the Con-
Household Definition    gress defined the food stamp household on the basis of the household
                        members’ sharing their resources and living together. Between 1971 and
                        1977, the definition was changed largely due to court suits.

                        The Food Stamp Act of 1977 changed the focus of the household from
                        one based on members’ sharing resources to that of individuals who pur-
                        chased food and prepared meals together. Changes to the household def-
                        inition enacted in 1981 and 1982 as cost-saving measures prevented
                        some people from participating in the program. To help combat the
                        problem of homelessness, the definition was broadened in 1987 to
                        permit, for example, adults who have minor children and live with their
                        parents to form separate households if they purchase food and prepare
                        meals separately. These changes have resulted in a definition that is
                        increasingly complex. (See ch. 2.)


Impact of the Current   The current definition of a food stamp household contains a disincentive
Definition on           for siblings to live together or adult children to live with their parents
                        because it requires them to form one household, regardless of their food
Homelessness            purchasing and preparation habits. Although homelessness experts


                         Page 3                GAO/RCED90-137   Food Stamp Household   Definition   Altematives
                      Executive   Summary




                      interviewed by GAO were unaware of any cases in which this occurred,
                      they said the requirement could discourage people from sharing housing
                      because the resulting household might become ineligible or receive
                      reduced benefits. While these experts indicated that they were unaware
                      of the definition’s directly causing homelessness, some argue that any
                      economic disincentive for peopk to share housing, however small, con-
                      tributes to homelessness. (See ch. 3.)


Alternatives to the   After reviewing the historical evolution of the current household defini-
                      tion and talking with researchers, homelessness advocates, and program
Current Definition    officials, GAO developed 11 alternatives to the current household defini-
                      tion. While GAO did not formulate dollar estimates and the number of
                      participants affected for each alternative, GAO did determine the relative
                      effect of these alternatives on participation and benefit costs.

                      Six alternatives group people together on the basis of familial relation-
                      ships and five on the economic relationships that may exist among
                      people who live together. Although all of the alternatives would sim-
                      plify the household definition, some would complicate the eligibility
                      determination process. On the other hand, most of the alternatives that
                      are simpler and do not complicate program administration would
                      expand eligibility and increase benefit payments. Two alternatives sim-
                      plify the definition and program administration and marginally increase
                      program participation while slightly increasing benefit costs. (See table
                      4.1.)

                       Generally, the alternatives that group more people together restrict eli-
                       gibility and reduce benefits while those allowing more separate house-
                       holds expand eligibility and increase benefit payments. Those that
                       require people who live together to be part of the same household
                       assume an economic relationship and cooperation that may not exist. On
                       the other hand, allowing people to form separate households on the
                       basis of their declaration that they purchase food and prepare meals
                       separately could cause people to misrepresent their living arrangements
                       in order to maximize their benefits and places the administrative burden
                       of verifying such arrangements on the government. (See ch. 4 and app.
                       I.>


                       GAO    is making no recommendations.
Recommendations


                       Page 4                  GAO/RCED-90-137   Food Stamp Household   Definition   Alternatives
                  Executive   Summary




                  The US. Department of Agriculture’s Food and Nutrition Service stated
Agency Comments   that it has no major problems with the report. It suggested several tech-
                  nical changes to the report. These have been incorporated where appro-
                  priate. It has also cautioned that any change to the definition be made
                  only after very careful consideration of the potential for introducing
                  error into an area that it believes to be generally understood. (See app.
                  III for the Service’s comments.)




                  Page 6                GAO/RCED-90-137   Food Stamp Household   Definition   Alternatives
Contents


Executive Summary
Chapter 1                                                                                                        8
Introduction               Food Stamp Program Administration
                           How Eligibility Is Determined
                                                                                                                 8
                                                                                                                 8
                           Advantages of Forming Separate Households                                             9
                           Current Definition of a Household                                                    10
                           Objectives, Scope, and Methodology                                                   11

Chapter 2                                                                                                       15
Evolution of the           The Congress’ Standardized Criteria for Household
                                Eligibility
                                                                                                                15
Household Definition       District and Supreme Court Cases Resulted in Further                                 16
                                Changes
                           The Food Stamp Act of 1977 as Amended Reflects                                       17
                                Greater Congressional Control and Allowed More
                                People to Participate
                           The Omnibus Budget Reconciliation Acts and Other                                      18
                                Changes Restricted Participation and Targeted
                                Specific Groups

Chapter 3                                                                                                       20
Current Household          Causes of Homelessness                                                               20
                           Experts State That Food Stamp Household Definition                                   21
Definition’s Effect on         Provisions May Discourage Shared Housing
Homelessness
Chapter 4                                                                                                        23
Alternative    Household   Changing Provisions of the Household Definition                                       23
                           Alternative Definitions of a Household                                                24
Definitions                Impact of Alternatives on Participation                                               26
                           Impact of Alternatives on Program Benefit Costs                                       32
                           Impact of Simplifying the Definition                                                  32
                           Conclusions                                                                           34
                           Agency Comments                                                                       34

Appendixes                 Appendix I: Alternative Household Definitions With                                    36
                               Analysis
                           Appendix II: Organizations Contacted During This Review                               56



                           Page 6                GAO/RCEIM@137   Food Stamp Household   Definition   Alt..ernatives
         Content.9




         Appendix III: Comments From the U.S. Department of                                      58
             Agriculture’s Food and Nutrition Service
         Appendix IV: Major Contributors to This Report                                          59

Tables   Table 4.1: Impact of Alternatives on Participation, the                                 26
             Near-Homeless, Benefit Costs, and Program
             Simplicity Ranked by Relative Benefit Costs
         Table 4.2: Potential Effect of Alternatives on Eligibility                              28
             and/or Benefit Levels for Categories of Participants




          Abbreviations

          AFDC       Aid to Families With Dependent Children
          CElO       Congressional Budget Office
          GAO        General Accounting Office
          RCED       Resources, Community, and Economic Development Division


          Page 7                 GAO/RCED-90-137   Food Stamp Household   Definition   Alternatives
Introduction


                     The Food Stamp Program is the largest food assistance program in the
                     United States. In fiscal year 1989, the U.S. Department of Agriculture’s
                     Food and Nutrition Service provided about $1 billion for administrative
                     costs and about $12 billion in benefits to a monthly average of 18.8 mil-
                     lion people in 7.2 million households. How a household is defined is a
                     key factor in determining program eligibility and benefits because Food
                     Stamp benefits are based on the size, income, and assets of the house-
                     hold. For Food Stamp purposes, a household is composed of individuals
                     who live, purchase food, and prepare meals together. Since siblings
                     living together and parents living with their children are considered to
                     purchase food and prepare meals together, they are automatically con-
                     sidered to be a household. Exceptions to this rule allow certain groups to
                      form separate households.


                     The Food Stamp Act authorizes the Secretary of Agriculture to establish
Food Stamp Program   uniform national eligibility standards for participation in the Food
Administration       Stamp Program. Applicants meeting all eligibility standards are entitled
                     to specified benefits on the basis of their economic circumstances. These
                     benefits are delivered as food coupons, which participants can redeem
                     for food at authorized stores.

                     The Department’s Food and Nutrition Service administers the Food
                     Stamp Program by establishing national policies and overseeing state
                     management of the program. States (1) delegate some management
                     authority to counties and cities and (2) provide service to applicants and
                     participants in local offices, These local offices are responsible for deter-
                     mining applicant eligibility and benefit amounts.


                     Food stamp eligibility is determined by a household’s size, income, and
How Eligibility Is   assets. The household’s composition governs whose income and assets
Determined           are counted in making eligibility and benefit determinations. Generally,
                     a household’s gross and net income cannot exceed 130 percent and 100
                     percent, respectively, of the poverty level and its assets cannot exceed
                     $2,000.’ Food Stamp caseworkers apply the net income test after
                     deducting certain expenses- including shelter and dependent care-
                     from gross income.



                     ‘The poverty level for a family of four in 1989 was $12,100. Assets as defined for this calculation
                     exclude possessions such as a person’s home or the first $4,500 of an automobile’s value.



                     Page 8                         GAO/RCED-90-137      Food Stamp Household      Definition   Alternatives
                   Chapter 1
                   Introduction




                   Some households are subject to more generous income and asset eligi-
                   bility standards. For example, households that include a member who is
                   60 or older or a member who is disabled are exempt from the gross
                   income test. Individuals who are both elderly and disabled and unable to
                   prepare meals are allowed to form separate households, although the
                   gross income of those with whom they live cannot exceed 165 percent of
                   the poverty level. Households with an elderly member are also allowed
                   $3,000 in assets.

                   A household’s food stamp benefit is based on its size, income, and nutri-
                   tional needs as determined by the Thrifty Food Plan2 The plan considers
                   households with more than one member to be able to take advantage of
                   the economies of scale by purchasing food in larger quantities than a
                   household with only one individual. According to the plan, an individual
                   forming a separate household must spend more for food each month, on
                   a per capita basis, than a member of a group household. Thus, the
                   household receives greater benefits for the first member than the second
                   and each successive member, and the average per capita food stamp
                   benefit for a one-person household is larger than the average per capita
                   benefit for a household of two or more people.


                    The income and asset limits, the standard household deduction,‘J and the
Advantages of       economies of scale in the Thrifty Food Plan give food stamp applicants
Forming Separate    incentives to form separate households. Gross and net income rules and
Households          the standard deduction favor single-person households over large house-
                    holds because income limits allow higher per-person income for single-
                    person households than for multi-person households. Thus, two separate
                    one-person households may be eligible for benefits despite having
                    greater combined income than an ineligible two-person household.

                    Individuals living together, except for spouses, siblings, and children
                    living with their parents, can form separate food stamp households and
                    exclude people with significant income or assets from their household if
                    they purchase food and prepare meals separately. Forming such sepa-
                    rate food stamp households also allows people to have greater assets
                    than they could as a single household. Since each household is allowed

                    ‘The Thrifty Food Plan, the basis for food stamp benefits, was designed by the Human Nutrition
                    Information Service to reflect the typical food choices of low-income households and to provide most
                    or all of the National Academy of Science’s Recommended Dietary Allowance for energy, proteins.
                    several vitamins, and minerals.

                    “All households are entitled to an inflation-indexed standard deduction, set at %112 per month, effec-
                    tive October 1, 1989.



                    Page 9                         GAO/RCED-90-137      Food Stamp Household     Definition   Alternatives
                          Chapter 1
                          Introduction




                          maximum assets of $2,000, two individuals forming separate house-
                          holds, under one roof, can hold assets of up to $4,000, rather than
                          $2,000, if they apply together.

                          The principle behind the Thrifty Food Plan also favors individuals
                          forming separate households because they can receive higher combined
                          food stamp benefits than two people living together as one household.
                          The Thrifty Food Plan considers economies of scale in purchasing food;
                          therefore, additional household members receive a decreasing additional
                          benefit. For example, two people living together as separate households
                          and receiving the maximum monthly benefit of $90 each would receive a
                          total benefit of $180. However, the maximum monthly benefit for a two-
                          person household is $165.


                          Under current Food Stamp Program rules, a household consists of per-
Current Definition of a   sons living together who customarily purchase food and prepare meals
Household                 together. The program requires some people to be household members,
                          allows some to choose to be household members, and excludes others
                          from household membership. According to the Food Stamp Act, parents
                          and their children and siblings who live together are considered to be a
                          household whether they purchase food and prepare their meals together
                          or not. A household also can consist of an individual living alone, a
                          group of unrelated individuals, or an individual living with others but
                          purchasing food and preparing meals separately.


Exceptions                 The household definition is complicated by several exceptions to the
                           general rules that allow individuals to form households separate from
                           those of their relatives. Under the Food Stamp Act, elderly and perma-
                           nently disabled persons can be considered as separate households if
                           they purchase food and prepare their meals separately from those with
                           whom they live. Similarly, the McKinney Act, enacted in 1987 to help
                           relieve the plight of the homeless, allows adults who have minor chil-
                           dren and live with parents or siblings to form a separate household if
                           they do not purchase food and prepare their meals with these relatives.

                           In addition, individuals living with but not related to others in their
                           home, such as boarders, roomers, and live-in attendants, are considered
                           nonhousehold members unless they elect to become part of another food
                           stamp household. However, neither the income nor the assets of these
                           nonhousehold members are counted toward determining the household’s
                           eligibility. If they are considered nonhousehold members, the money


                           Page 10               GAO/RCRD90-137   Food Stamp Household   Definition   Alternatives
                        Chapter 1
                        Introduction




                        that boarders and roomers pay to the household is included as part of
                        the household’s income. According to Service rules, boarders-those
                        whose shelter payment includes money for meals-wishing to apply for
                        food stamps must do so as part of the household supplying the meals.
                        However, roomers-those who pay for a room only and provide their
                        own meals-and live-in attendants may be considered as separate
                        households from those with whom they live if they purchase and pre-
                        pare food separately.


Exclusions              Some people are not allowed to participate in the Food Stamp Program.
                        For example, ineligible aliens (illegal aliens and aliens who are tempo-
                        rary residents), intentional program violators, and those persons not
                        complying with employment or training requirements are barred from
                        participation. However, their income and assets may be counted, in
                        whole or in part, toward the household’s eligibility. Supplemental
                        Security Income recipients who receive cash assistance for food and
                        some students over the age of 18 are also barred from participating in
                        the program. However, their income is not used in determining
                        eligibility.


                        Concerned that the current definition of a household in the Food Stamp
Objectives, Scope,and   Program has become too complex and a source of caseworker errors, the
Methodology             Chairman and the Ranking Minority Member, Senate Committee on Agri-
                        culture, Nutrition, and Forestry, in an October 27, 1988, letter, as modi-
                        fied through subsequent discussions with their offices, asked us to
                        review the evolution of the current definition of a household and to
                        develop several alternatives to the current definition. Also, we were
                        asked to compare each alternative with the others and with the current
                        definition in terms of relative potential cost of participant benefits and
                        in terms of program simplicity when possible. In addition, in a December
                        6, 1988, letter, the Chairmen of the Subcommittee on Nutrition and
                        Investigations, Senate Committee on Agriculture, Nutrition and Forestry
                        and the Subcommittee on Domestic Marketing, Consumer Relations and
                        Nutrition, House Committee on Agriculture asked that we determine
                        whether the current household definition causes household members to
                        refuse to share housing with their relatives because this might lower
                        their food stamp benefits, thereby contributing to the homelessness
                        problem.

                         To determine how the household definition evolved into its current
                         form, we reviewed the legislative changes to the Food Stamp Program
                                               l




                         Page 11               GAO/RCED-90-137   Food Stamp Household   Definition   Alternatives
Chapter 1
introduction




that affected the household definition since 1964 and the published rea-
sons for those changes. We reviewed the Food Stamp Acts of 1964 and
1977 as well as the subsequent amendments to those acts. To determine
the reasons for the changes in the definition, we reviewed House and
Senate conference reports issued in conjunction with the relevant laws.
We also researched decisions in court cases that may have helped shape
the definition of a household for the Food Stamp Program.

In determining the current household definition’s impact on the home-
less, we reviewed the definition and literature on homelessness issues.
We also asked homeless shelter administrators, homeless people, aca-
demic researchers, welfare rights advocates, caseworkers, state public
assistance officials, and Service officials for their opinions on how much
the definition contributed to the homelessness problem. The discussions
were conducted in Sacramento, San Diego, and San Francisco, California;
Minneapolis and Saint Paul, Minnesota; Waterbury, Vermont; Madison,
Wisconsin; and Washington, D.C. These discussions provide the basis for
our chapter on homelessness. (See ch. 3.)

In chapter 4, we present the results of our analysis of the potential
impact of 11 alternatives to the current household definition on program
participation, benefit payments, and their ability to simplify the defini-
tion. In formulating these alternative household definitions, we
researched the legislative history of the Food Stamp Program’s house-
hold definition, obtained information on the court cases affecting the
definition from the Food and Nutrition Service, and solicited views of
experts on food assistance at the Congressional Research Service and
the Congressional Budget Office (CBO) in Washington, DC.; the Food and
Nutrition Service headquarters in Alexandria, Virginia; and people
familiar with food assistance programs, poverty issues, food stamp pro-
gram administration (including caseworkers at the state and local
levels), and homelessness, who identified complex or inequitable aspects
of the household definition and suggested how these might be improved.
State agencies also suggested some specific alternative definitions, and
 we based two alternatives on household concepts used by other federal
 agencies. Using the information we gathered, we developed the 11 alter-
 natives to the current household definition but retained the existing
 administrative procedures, e.g., income and asset tests for determining
 eligibility as well as existing criteria or punitive measures used to
 enforce compliance with program regulations. For example, we retained,
 as part of each alternative, the treatment of ineligible aliens and inten-
 tional program violators as outlined in the current program. (See app. II
 for a list of agencies 2nd associations that we contacted.)


 Page 12               GAO/RCEDSO-137   Food Stamp Household   Deftition   Alternatives
    Chapter 1
    Introduction




    After identifying the alternatives, we evaluated each alternative’s rela-
    tive simplicity and cost compared with the current definition and dis-
    cussed our results with state agency and Service officials.4 To determine
    the relative benefit costs of the alternatives, we analyzed the effect that
    changes from the current definition would have on various participating
    groups. We compared each alternative with the current definition, pro-
    gram regulations regarding income and deductions, and special eligi-
    bility rules for various groups. On the basis of this comparison, we
    determined whether each alternative would increase, decrease, or have
    no effect on eligibility or benefits for each group. We then ranked the
    alternatives according to the cumulative effects that each alternative
    would have on the eligibility and benefits of the various participating
    groups.

    Our evaluation was based on several assumptions.

l   The participation rate (the percentage of eligible people who participate
    in the program) by potentially eligible members of specific groups would
    be the same under each alternative.
l   All provisions of the current Food Stamp Program would remain in
    effect unless specifically changed by an alternative.
l   Those eligible to form separate households and maximize their benefits
    would choose to do so to the same extent under each alternative.
l   People would not misrepresent their food purchasing and preparation
    habits under one alternative any more or less than they do under the
    current definition.
l   People would not change their place of residence to form separate
    households to either become eligible or increase their benefits.

     Data were not available or were inadequate for us to formulate reliable
     dollar estimates of the impact of each alternative. We also did not deter-
     mine the extent to which the alternatives would affect program admin-
     istrative costs because, according to CBO and Food and Nutrition Service
     staff, most of the alternatives would not cause a measurable increase or
     decrease in administrative costs, by increasing or decreasing the number
     of caseworkers needed, for e?ample. However, according to a Service
     official, the individualized benefit alternative would drastically increase
     the administrative burden and costs. Appendix I describes each alterna-
     tive in detail.


     “Simplicity refers to the effect that the alternatives would have on the administration of the Food
     Stamp Program in terms of impact on the caseworker’s tasks.



     Page 13                        GAO/RCED-9@137       Food Stamp Household     Deftition   Alternatives
Chapter 1
Introduction




We conducted our review between January 1989 and February 1990 in
accordance with generally accepted government auditing standards.




 Page 14             GAO/RCEDBO-137   Food Stamp Household   Deftition   Altematives
Chapter 2

Evolution of the Household Definition


                        Since 1964, the Food Stamp Program’s definition of a household has
                        undergone many changes. Court challenges and amendments to the 1964
                        Food Stamp Act resulted in the definition’s being modified in a piece-
                        meal way until the Congress passed the 1977 Food Stamp Act, which
                        completely redefined the household. In 1981 and 1982, the Omnibus
                        Budget Reconciliation Acts changed the household definition to obtain
                        budgetary savings. More changes have been made since then, many of
                        which were aimed at restoring benefits to groups that became ineligible
                        as a result of the 1981 and 1982 legislation,


                        When the Food Stamp Act of 1964 was first implemented, each state
The Congress’           participating in the Food Stamp Program was required to establish eligi-
Standardized Criteria   bility standards for households whose income was a limiting factor to
for Household           obtaining a nutritionally adequate diet. As originally defined by the act,
                        a household was an economic unit consisting of a group of related or
Eligibility             nonrelated individuals who lived together, shared common cooking facil-
                        ities, and customarily purchased food together. An individual who had
                        access to cooking facilities and purchased and prepared food for home
                        consumption was also considered a household. Thus, in order to estab-
                        lish a food stamp household, applicants had to have access to a cooking
                        facility and purchase and prepare food individually or as a group.

                        In 1971, the Congress amended the Food Stamp Act to ensure that food
                        stamps went to truly needy households. The amendments made the Sec-
                        retary of Agriculture responsible for establishing uniform national eligi-
                        bility standards for participation by households in the program. Eligible
                        households were to receive enough assistance to provide a nutritionally
                        adequate diet rather than merely supplementing the food budget of
                        needy people. Households receiving public assistance, such as Aid to
                        Families with Dependent Children, were made categorically eligible,
                        while others had to meet specific eligibility criteria. Benefits were also
                        provided to the working poor, but households containing adult family
                        members who were unemployed and did not register for and accept
                        employment were made ineligible.

                        The Congress also acted to deny benefits to communal groups. It pre-
                        cluded groups of unrelated people who lived together from receiving
                        benefits’ by defining the household as a group of related individuals


                        ‘The Congress made an exception for groups of unrelated people aged 60 and over. These people
                        continued to receive benefits regardless of the relatedness provision.



                        Page 15                      GAO/RCEIMO-137      Food Stamp Household     Definition   Alternatives
                       Chapter 2
                       Evolution of the Household   Definition




                       who live together as one economic unit, sharing common cooking facili-
                       ties, and customarily purchasing food together. Finally, dependents over
                       the age of 18 were declared ineligible for separate program benefits
                       until a year after they had last been claimed as dependents for federal
                       income tax purposes.

                       Between 1972 and 1974, the Congress further modified the household
                       definition to provide benefits for residents of some institutions and to
                       prevent duplication of assistance provided under the Supplemental
                       Security Income Program. Residents of federally subsidized housing for
                       the elderly and approved narcotics or alcohol treatment facilities
                       became qualified for food stamps by these changes. On the other hand,
                       recipients of Supplemental Security Income Program benefits were, and
                       still are, ineligible to receive food stamps if their benefits have been spe-
                       cifically increased to include the value of their food stamp allotment.


                       The results of several court cases caused further changes in the house-
District and Supreme   hold definition in 1973. These cases successfully challenged both the
Court CasesResulted    Food and Nutrition Service’s interpretation of the Food Stamp Act and
in Further Changes     some of the amendments made to the act in 1971. As a result, the Ser-
                       vice changed its regulations, and the law was amended to comply with
                       the court rulings.

                       In May 1973, the Federal District Court for the Northern District of Cali-
                       fornia ruled in Knowles vs. Butz that the Food and Nutrition Service
                       regulation requiring everyone living together to be an economic unit,
                       and thus a household, violated the 1964 Food Stamp statute. The Court
                       stated that the Food Stamp Act defined a household as a group of indi-
                       viduals who functioned as an economic unit and not necessarily as eve-
                       ryone sharing living quarters. It said that interpreting the economic unit
                       as everyone living under one roof could result in denial of food stamp
                       benefits when one resident’s ineligibility disqualified the entire house-
                       hold from the program, even though this individual’s resources were not
                       shared with other members of the household. In response, the Service
                       rewrote its regulations to recognize eligible separate households in
                       which people living together purchased and stored their food sepa-
                       rately, or in which common living costs were not met from income avail-
                       able to all members.

                        In June 1973, Supreme Court decisions-in the Moreno and Murry
                        cases-further   changed the household definition. In USDA vs. Moreno,
                        the Court ruled that the 1971 Food Stamp Act provision that excluded


                        Page 16                       GAO/RCED-90-137   Food Stamp Household   Definition   Alternatives
                        chapter 2
                        Evolution of the Household   Definition




                        any household containing unrelated individuals from participating in
                        the program violated the equal protection component of the clause of
                        the fifth amendment pertaining to due process. In USDA vs. Murry, it
                        struck down the provision that made a household ineligible for food
                        stamps because it contained a person 18 or older who had been claimed
                        as a dependent for federal income tax purposes by a taxpayer who is
                        not a member of an eligible household. The Court declared that the rule
                        violated the clause of the Constitution pertaining to due process because
                        the deduction taken for the benefit of the parent in a prior year is not a
                        rational measure of the need of another household in which the child of
                        the tax-deducting parent lives.


                        The Congress passed the Food Stamp Act of 1977 to simplify the pro-
The Food Stamp Act      gram, make eligibility requirements more precise, and reduce the
of 1977 as Amended      number of judicial challenges to the Service’s Food Stamp Program regu-
Reflected Greater       lations. As part of the new legislation, the Congress replaced the eco-
                        nomic unit with a new household definition based on those who shared
Congressional Control   their income and assets to acquire food. Thus, the new definition
and Allowed More        described the household as persons living together who purchased food
                        and prepared meals together.
People to Participate
                        According to the legislative history of the act, by setting specific stan-
                        dards and definitions, the Congress wanted to clarify the goals and pro-
                        cedures of the Food Stamp Program. The clarification was intended to
                        (1) prevent continuing judicial invalidation of the Service’s regulations
                        arising from concerns about the program’s vague goals and (2) address
                        the judicial perception that the program’s goals and the Service’s regula-
                        tions were inconsistent. In accomplishing these objectives, the act pre-
                        empted some of the Secretary of Agriculture’s discretion in establishing
                        specific food stamp eligibility procedures.

                         The 1977 act defined a household as an individual living alone or with
                         others who purchased food and prepared meals separately, or a group
                         of individuals who purchased food and prepared meals together. The
                         manner in which living expenses and cooking facilities were shared was
                         not a factor in determining the members of a household.

                         In addition to the conceptual changes, the Congress revised many spe-
                         cific aspects of the household definition. For example, the Congress
                         modified the work requirements and eligibility of those who voluntarily
                         quit a job and made illegal and temporary aliens ineligible for food
                         stamps. The Congress also added provisions to the act that further


                         Page 17                        GAO/RCED9@137   Food Stamp Household   Definition   Alternatives
                          Chapter 2
                          Evolution of the Household   Definition




                          restricted participation by college students. For example, it required
                          that students participate in a work study program or work at least 20
                          hours per week in order to be eligible for food stamps.

                          In 1979 and 1980, the Congress amended the 1977 act’s household defi-
                          nition by allowing the following individuals and groups to qualify as
                          households:

                      l the disabled and blind living in certain group living arrangements;
                      . households containing individuals involved in labor disputes (subject to
                        specific income, asset, and work registration requirements);”
                      l residents in shelters for battered women and children; and
                      l students enrolled in a work incentive plan under Title IV of the Social
                        Security Act.


                          The 1977 act’s efforts to expand participation were followed by efforts
The Omnibus Budget        to reduce federal spending. The Congress amended the household defini-
Reconciliation Acts       tion as part of the cost-cutting initiatives in the Omnibus Budget Recon-
and Other Changes         ciliation Acts of 1981 and 1982. Whereas the 1977 Food Stamp Act had
                          increased program eligibility and benefit payments, the 1981 and 1982
Restricted                acts restricted eligibility, thereby reducing benefit payments. However,
Participation and         the Congress also made exceptions to its new restrictions. These excep-
                          tions protected the existing benefits of specific groups.
Targeted Specific
Groups                    The 1981 Omnibus Budget Reconciliation Act restricted parents living
                          with adult children, and boarders from qualifying as separate house-
                          holds. Under the act, parents and their children who live together were
                          considered as one household regardless of whether they purchased and
                          prepared their meals together. (Under the 1977 household definition
                          parents and their children could apply as separate households if they
                          purchased food and prepared meals separately.) The 1981 act intended
                          to prevent families claiming to purchase and prepare food separately
                          from forming separate households to attain larger food stamp benefits.
                          The 1981 act also sought to reduce program abuse by prohibiting indi-
                          viduals who lived with others and: paid for their meals (boarders) from
                          being considered separate households.

                          In another budget-cutting initiative, the Omnibus Budget Reconciliation
                          Act of 1982 restricted the eligibility of siblings living together and of

                          “Households containing strikers were later disqualified from participation unless they were eligible
                          for food stamp benefits before the strike.



                          Page 18                        GAO/RCEIMO-137       Food Stamp Household      Deftition   Alternatives
Chapter 2
Evolution of the Household    Definition




students. Siblings living together were required to form one household
regardless of whether they purchased and prepared their meals
together.” As in the case of the 1981 provision affecting parents and
children, this change attempted to curtail program abuse; it prevented
siblings from creating artificial households by claiming to purchase and
prepare meals separately. The Congress also wanted to remove from the
Food Stamp Program college and postsecondary students who volunta-
rily placed themselves in need by foregoing regular employment and
going to school. To that end, the Congress restricted student eligibility
by prohibiting participation of those students who did not (1) receive
Aid to Families with Dependent Children, (2) have parental responsi-
bility either for a dependent under the age of 5, or (3) have a dependent
under the age of 12 for whom adequate child care was not available.

When the Congress instituted these changes in the definition of house-
hold, it did not want to harm the elderly or the disabled. Thus, the 1981
act provided that elderly parents could form a separate household from
their children if they purchased food and prepared meals separately and
if one parent was 60 years of age or older. Similarly, the Agriculture and
Food Act of 1981 targeted the disabled by allowing disabled parents to
form separate households from their children if they purchased food
and prepared meals separately. An exception to the requirement that
those who purchase and prepare meals together be considered a house-
hold allowed separate household status for those individuals aged 60
and over, and their spouses, who lived with others and were unable to
purchase and prepare their own meals due to a certified permanent dis-
ability. These people were allowed to apply for benefits as separate
 households if the income of those with whom they lived did not exceed
 165 percent of the poverty line.

 Finally, the Congress changed the household definition to help combat
 the problems of the homeless. In 1987, the Congress passed the Stewart
 B. McKinney Homeless Assistance Act, which amended the food stamp
 household definition to permit parents with minor children living with
 another sibling or parent to apply as a separate household if they pur-
 chased food and prepared their meals separately.




 3An exception to this general rule allowed siblings to form   separa&households   if at least one was
 elderly or disabled.



 Page 19                         GAO/lKXlM@137       Food Stamp Household      Definition   Alternatives
Chapter 3

Current Household Deftition’s Effect
on Homelessness

               As we have previously reported, experts have stated that a major cause
               of homelessness is the decline in availability of low-cost housing. Food
               Stamp Program and homelessness experts that we interviewed stated
               that they were aware of no instances in which the current food stamp
               household definition caused someone to become or remain homeless.’
               However, the definition may, under some circumstances, contribute to
               the problem of homelessness because it contains provisions which could
               discourage parents and their adult children or siblings from living
               together. They said, therefore, that changing the current definitions to
               give parents and their adult children or siblings who live together the
               opportunity of applying for food stamps separately would remove these
               potential disincentives to sharing housing.


                People become homeless for a variety of reasons. As we have previously
Causesof        reported, experts have stated that the primary causes of homelessness
Homelessness    include: the decline in low-income housing supply, release of mentally ill
                people from mental institutions, unemployment, alcohol/drug abuse
                problems, personal crises, and cuts in public assistance programs.?
                Among these factors, the shortage of affordable housing has a large
                impact on homelessness.

                Caseworkers, welfare rights advocates, and homeless shelter adminis-
                trators that we talked to in four states and the District of Columbia told
                us that as far as they knew, the current definition did not cause home-
                lessness. None of the people we interviewed were able to give us an
                actual instance in which the household definition caused someone to
                become or remain homeless. Shelter administrators told us that the
                homeless themselves do not identify the eligibility requirements of the
                Food Stamp Program as a reason for their homelessness.




                ‘According to Food Stamp Program regulations, the homeless are generally those who have no fixed
                dwelling other than temporary shelters.

                ‘Homelessness: Implementation of Food and Shelter Programs Under the McKinney Act (GAO/
                      8843, Dec. 8, 1987).




                Page 20                       GAO/RCJXMO-137     Food Stamp Household     Definition   Alternatives
                            Chapter 3
                            Current Household    Definition’s       J!Xect
                            on Homelessness




                            The household definition assumes that close relatives who live together
Experts State That          also purchase food and prepare meals together. Caseworkers, food
Food Stamp Household        stamp administrators, and advocates told us that this assumption could
Definition Provisions       make some needy individuals ineligible for food stamps benefits. For
                            example, parents and children who live together generally must apply
May Discourage              for food stamps together (as a household), and siblings who live
Shared Housing              together must also apply for benefits together? Caseworkers and income
                            rights advocates pointed out that the household definition assumes a
                            financial relationship between related people who live together that
                            may not exist. For example, parents and adult children or siblings may
                            share a dwelling to save on rent but may not share food or other
                            resources. Because of the economies of scale which are built into food
                            stamp benefit tables, smaller households receive larger per capita bene-
                            fits than larger households. Since caseworkers must count the income
                            and assets of all members of the household to determine food stamp eli-
                            gibility and benefits, requiring people to apply for food stamps together
                            (if they do not share their resources) may make them ineligible to
                             receive food stamps because their combined resources may exceed the
                             maximum resources allowed. This may make a shared housing arrange-
                             ment more difficult to maintain. Additionally, if any member refuses to
                             supply information needed to process the food stamp application, the
                             claim will be denied and needy members of the household will be ineli-
                             gible for food stamp benefits.

                            According to caseworkers, advocates, and state officials that we inter-
                            viewed, provisions requiring adult children to apply for food stamps
                            together with their parents and siblings with whom they live could dis-
                            courage these people from sharing housing in several ways:

                        l Relatives may refuse to take in a homeless or near-homeless” individual
                          because that person’s income may decrease their food stamp allotment.
                        . The homeless or near-homeless who are currently eligible for food
                          stamps may not want to live with their relatives because their relatives’
                          income would make them ineligible.
                        . The homeless or near-homeless may not want to live with their relatives
                          because they would lose control of their food stamp allotment since all


                             “Exceptions to these general rules exist for the elderly, permanently disabled persons, and adults
                             with minor children who live with their parents or siblings. These exceptions are discussed in detail
                             in chap. 1.

                             “The near-homeless are those individuals who could be evicted for nonpayment of rent or utilities,
                             face foreclosure, pay an excessive portion of their income on housing, or are doubled up with others
                             because of their financial situation.
                                                                .

                             Page 21                            GAO/RCED9@137    Food Stamp Household      Deftition   Alternatives
    Chapter 3
    Current Household   Defhition’s        Effect
    on Homelessnesa




    food stamp benefits are delivered to the head of the food stamp
    household.
l   Individuals may leave their relatives’ homes in order to qualify for food
    stamps if others in the household have income that makes the household
    ineligible or if a household member refuses to supply information for the
    food stamp application.




                                      .


     Page 22                              GAO/iKED9&137   Food Stamp Household   Deilnition   Alternativea
Chapter 4

Alternative Household Definitions


                                  By changing existing provisions of the current household definition, we
                                  developed 11 alternative definitions. The alternatives differ in terms of
                                  program simplification, the extent to which they affect the eligibility of
                                  different groups-such as the elderly or the near-homeless-and their
                                  impacts on overall program participation (and benefit costs). The alter-
                                  natives, which are summarized in this chapter, are discussed in detail in
                                  appendix 1.


                                  We changed 6 provisions of the current definition to develop the 11
Changing Provisions               alternative definitions of a household for the Food Stamp Program.
of the Household                  People knowledgeable of and/or involved in the Food Stamp Program
Definition                        said that changing these provisions could make the definition simpler to
                                  administer while ensuring its fairness to food stamp recipients.
                                  Changing any of these provisions would affect participation and benefit
                                  costs.

                                  The alternatives were constructed by changing one or more of the provi-
                                  sions in the following manner:

                      . Eliminating the “purchase and prepare” provision without replacing it
                        with another method of grouping people together could, depending on
                        other changes, allow individuals to choose whether to form separate
                        households regardless of their food purchasing and preparation habits.
                      l Dropping the requirement that adult children living with their parents
                        and siblings living together must form a single food stamp household
                        would allow them to form separate households if they purchase food
                        and prepare meals separately.
                      l Reversing the McKinney Act provisions would require adults who have
                        minor children and live with their parents or siblings to form single
                        households regardless of whether they purchase food and prepare meals
                        separately.
                        Disallowing separate household status for the elderly or disabled living
                          l


                        with their adult children or siblings would require them to form a single
                        household regardless of whether they purchase food and prepare meals
                        separately.
                        Preventing unrelated individuals who live together from establishing
                          l


                        separate households when they purchase food and prepare meals sepa-
                        rately would require them to form one household for food stamp
                        purposes.
                        Removing special income and asset rules for households containing eld-
                              l


                        erly or disabled members would result in some of these households
                        becoming ineligible to receive food stamps.


                                   Page 23               GAO/RCED9@137   Food Stamp Household   Definition   Alternatives
                   Chapter 4
                   Alternative   Household   Deftitions




                   The following list provides a brief description of the 11 alternatives that
Alternative        we developed by manipulating the above provisions. Some alternative
Definitions of a   definitions provide extreme changes from the current definition, e.g.,
Household          one alternative combines all individuals who live together into one food
                   stamp household and another alternative allows each individual who
                   meets eligibility standards to form a separate household. Other alterna-
                   tives only slightly change the current definition. The names of the alter-
                   natives were selected to describe the salient features and to help
                   differentiate between definitions that, in some cases, are very similar.
                   (Detailed descriptions of each alternative and analyses of the effect
                   each would have on participation, benefit costs, homelessness, and pro-
                   gram simplicity are included in app. I.)

                   Single Dwelling: This definition requires all individuals living in one
                   dwelling to form a single food stamp household.

                   Modified Economic Unit: This definition requires individuals living
                   together to form a household if they share resources to purchase food
                   and share common cooking facilities. Individuals could form separate
                   households only if they purchase food separately and have separate
                   cooking facilities.

                    Modified Single Dwelling: This definition requires all individuals living
                    in one dwelling to form one food stamp household but allows exclusions
                    from income and deductions for households with elderly or disabled
                    members.

                    Extended Family: This definition requires individuals living together
                    who are related by blood or marriage to form one household, regardless
                    of age or disability. Unrelated individuals could form separate house-
                    holds only if they purchased food and prepared meals separately.

                    Financial Dependency: This definition requires individuals living
                    together to form one food stamp household unless they document that
                    they provide more than 50 percent of their own financial support.

                    Standard: This definition requires spouses, parents and their minor chil-
                    dren, and unrelated individuals who live together and purchase food
                    and prepare meals together to form a single household. The elderly
                    could form separate households only if they are disabled and unable to
                    prepare their own food and the gross income of the family they are
                    living with is, or is less than, 130 percent of the poverty level.



                    Page 24                           GAO/RCED9@137   Food Stamp Household   Definition   Alternatives
Chapter 4
Alternative   Household   DetInitions




Nuclear Family: This definition requires spouses, siblings, and parents
or guardians with children who live together to form a household. The
elderly, the disabled, adults living with their parents with minor chil-
dren of their own, and all others could form households together or sep-
arately because they would no longer be subject to the purchase and
prepare requirement.

Modified 1977 Food Stamp Act: This definition requires spouses and
parents with their minor children who live together to form a food
stamp household. Others could form separate households only if they
purchase food and prepare meals separately.

Legal Responsibility: This definition requires those who live together
and are legally responsible for each other (such as spouses or parents
and their minor children) to form a food stamp household. Almost all
others could form households either separately or together.

Aid to Families With Dependent Children (AFDC): For those receiving
AFJX assistance, the food stamp household would be the same as the
AFDCassistance unit’ (household). For AFDC recipients living with non-
AFDCrecipients and those not receiving AFDC, the household would be
defined under the Legal Responsibility alternative.

Individualized Benefits: Each eligible person would receive food stamp
benefits on the basis of income, assets, and expenses. For parents living
with their minor children, income and expenses would be prorated
equally among parents and their children to determine eligibility and
benefits for each family member.

Table 4.1 summarizes the impacts of the 11 alternative household defi-
nitions on participation, the near-homeless, benefit costs, and program
simplicity.




 ‘An AFDC assistance unit consists of parents and their natural, adopted, or step children under the
 age of 18 or a group of individuals consisting of children and their guardian or another responsible
 adult.



 Page 25                          GAO/RCED-90-137    Food Stamp Household     Definition   Alternatives
                                                   Chapter 4
                                                   Alternative      Household     Definitions




Table 4.1: Impact of Alternatives on Participation, the Near-Homeless, Benefit Costs, and Program Simplicity Ranked by Relative
Benefit Costs
                            Eligibility 81
Alternatives’               participationb             Near- homeless?         Benefit costs*            Program simplicityd
Single Dwelling                   Decrease                       Decrease                          Decrease                      Simpler
Modified    Economic       Unit   Decrease                       Not determined                    Decreasee                     More complex
Modified    Srnale Dwellina       Decrease                       Decrease                          Decreasee                     Simpler
Extended      Familv              Decrease                       Decrease                          Decrease                      More complex
Financial    Dependency           Not determined                 Not determined                    Not determined                More complex
Standard                          Not determined                 Increase                          Not determined                Simpler
Nuclear     Famrlv                Increase                       Increase                          Increase’                     Simpler
Modified     1977 Act             Increase                       Increase                          Increase’                     Simpler
Leoal Responstbilrty              Increase                       Increase                          Increases                     Simpler
AFDC                              Increase                       Increase                          increases                     Simpler
lndivtdualtzed       Benefits     Increase                       Increase                          Increase                      More comolex

                                                   aThe alternattves are listed according to therr relative benefit costs (compared to those under the cur
                                                   rent system), from the least to the most costly. Thts rankrng was derived by companng the effects of
                                                   each alternatrve on the benefits of the groups listed In table 4 2.

                                                   bAlternatives‘    Impact on elrgrbrlrty and partrcipatron was derived from the impact on groups noted In
                                                   table 4 2

                                                   CThts column shows the accumulated effect on parttcrpatton of near-homeless groups, rncludrng parents
                                                   wrth minor children, adult chrldren living with parents, siblings livrng together, and unrelated rndrvrduals
                                                    dProgram srmplicrty refers to the effect that the alternatives would have on Food Stamp Program admrn-
                                                    stration In terms of the caseworker’s tasks.

                                                    eOur analysts did not make a drstrnction between the relative potential costs of the Modrfied Economtc
                                                    Unrt and the Modrfied Single Dwellrng alternatrves

                                                    ‘Our analysrs drd not make a drstrnction between the relative potential costs of the Nuclear Family and
                                                    the Modtfied 1977 Act alternatives

                                                    sour analysis did not make a drstrnction between the relative potential costs of the Legal Responsrbrlrty
                                                    and AFDC alternatives.



                                                    The effects of these 11 alternatives on specific segments of the popula-
Impact of Alternatives                              tion would vary according to the combination of elements used to con-
on Participation                                    struct the alternatives.

                                                    Five alternatives would increase Food Stamp Program participation by
                                                    removing provisions of the current definition that prevent people from
                                                    forming more separate households. The Legal Responsibility, AFDC, and
                                                    Individualized Benefits alternatives would allow almost all categories of
                                                    participants to form separate households. The Modified 1977 Act alter-
                                                    native would increase participation only among adult children living
                                                    with their parents and siblings living together. The Nuclear Family


                                                    Page 26                                GAO/RCED-96-137     Food Stamp Household   Deftition   Alternatives
Chapter 4
Alternative   Household   Definitions




alternative, by removing the requirement that people form a household
if they purchase and prepare their food together, would increase partici-
pation somewhat among all categories except adult children living with
their parents and siblings living together.

Four alternatives would reduce participation by preventing people from
forming separate households, and two others would have varying
effects on different categories of participants. The Single Dwelling, Mod-
ified Single Dwelling, Modified Economic Unit, and Extended Family
alternatives would prevent some people from forming separate house-
holds for food stamp purposes. Thus, some of these people would
become ineligible as their income and assets are combined with others in
their home. We did not determine whether the Financial Dependency
and Standard alternatives would increase or decrease overall participa-
tion because the data available on the various categories of participants
were insufficient for us to determine whether an increase in one cate-
 gory would offset a decrease in another.

 Table 4.2 shows the effect that each alternative would have on eligi-
 bility and benefits for different program participants.




  Page 27                           GAO/RCED-W137   Food Stamp Household   Definition   Alternatives
                                              Chapter 4
                                              Alternative   Household   Definitions




Table 4.2: Potential Effect of Alternatives on Eligibility and/or Benefit Levels for Categories of Participants’
                                                     Elderly 81      Parents with      Adult children Siblings who                    Unrelated
Alternatives      Elderlv           Disabled         disabled        minor children with parents        live toaether                 individuals
Sinale Dwellina      Decrease     Decrease          Decrease             Decrease            No effect           No effect            Decrease
Modified             Decrease     Decrease          Decrease             Decrease            Increase            increase             Decrease
Economic      Untt
Modified Single      Decrease     Decrease          Decrease             Decrease            No effect           No effect             Decrease
Dwellinab
Extended             Decrease     Decrease          Decrease             Decrease            No effect           No effect             No effect
Family
Financial            Decrease     Decrease           Decrease            Decrease            Increase            Increase             Not
Dependency                                                                                                                            determined”
Standard             Decrease     Decrease           Decrease            No effect           Increase            Increase              No effect
Nuclear     Family   Increase     Increase           No effect           Increase            No effect           No effect             Increase
yqtdified    1977    No effect    No effect          No effect           No effect           Increase            Increase              No effect

Legal                Increase      Increase          No effect           Increase            Increase            Increase              Increase
Responsibility
AFDC                 Increase      Increase          No effect           Increase            Increase            Increase              Increase
Individualized       Increase      Increase          Increase            Increase            Increase            Increase              Increase
Benefits

                                               aWe performed thus analysrs by comparing each alternabve wrth the current household definrtron, pro-
                                               gram regulations regardtng Income and deductions, and special eligibrlity rules for various groups On
                                               the bass of thus comparrson, we projected whether each alternative would increase, decrease, or have
                                               no effect on elrgtbiltty and benefits for each group An increase means that the alternatrve would make tt
                                               more likely that persons In that group would become elrgible, recetve more food stamps, or both. A
                                               decrease means that the alternative makes it more likely that persons In that group would be ineligible
                                               or receive fewer food stamps than they would under the current defrnttron. This analysis uses the cur-
                                               rent food stamp benefit structure, based upon the Thrifty Food Plan. Some alternatrves would require
                                               changing that structure

                                               bThe Modified Single Dwellrng alternative excludes some Income counted toward the gross Income lrmtt
                                               and spectal deductions for the elderly or disabled. Thus, more people in these groups would be eligtble
                                               than under the Srngle Dwellrng alternatrve

                                               ‘We could not determrne effects in these areas because adequate data were not available




Impact of Alternatives on                      Our alternatives could affect the homeless and near-homeless and other
Special Groups                                 special groups, namely, migrant farm workers, Native Americans, and
                                               refugees. The more restrictive alternatives could prevent participa-
                                               tion-allowed     under the current definition-by  some people whose eco-
                                               nomic circumstances or cultural traditions require them to share their
                                               dwellings. These people could receive reduced benefits or be found ineli-
                                               gible under the alternatives that are based upon shared living space or
                                               cooking facilities because these alternatives prevent people from
                                               applying for food stamps separately. The current definition allows




                                               Page 28                          GAO/RCED-90137      Food Stamp Household       Definition   Alternatives
                         Chapter 4
                         Alternative   Household   Definitions




                         applicants to form separate households from unrelated people and dis-
                         tant relatives if they purchase and prepare their food separately.

The Homeless and Near-   None of the alternatives would harm the homeless because none would
Homeless                 change the provisions of the current definition that allow the homeless
                         to qualify for food stamps. In fact, some of the alternatives would
                         remove some of the barriers that could prevent the homeless from
                         entering into shared housing arrangements. However, all of our alterna-
                         tives could affect the near-homeless either negatively or positively, by
                         decreasing or increasing their participation in the Food Stamp Program.

                         Six alternatives would increase participation of the near-homeless and
                         prevent the homeless from losing benefits if they shared housing with
                         parents or siblings because the alternatives remove either some or all of
                         the provisions of the current definition that prevent people from
                         forming separate households. The Legal Responsibility, AFDC,and Indi-
                         vidualized Benefits alternatives eliminate almost all restrictions to
                         people forming separate households from those with whom they live.
                         The Modified 1977 Act and the Standard alternatives would allow
                         adults living with their parents and siblings living together to’form sep-
                         arate households if they purchased and prepared their food separately.
                         The Nuclear Family alternative would allow more adults with minor
                         children living with their parents and unrelated individuals to form sep-
                         arate households because it drops the requirement that they purchase
                         and prepare their food together. However, the Nuclear Family alterna-
                         tive would not allow adult children living with their parents or siblings
                         living together to form separate households.

                         Three alternatives would harm the near-homeless by requiring them to
                         form a household with those they live with. Currently, parents with
                         minor children living with close relatives and unrelated individuals
                         living together can form households that are separate from those with
                         whom they live if they purchase and prepare their food separately. The
                         Single Dwelling and Modified Single Dwelling alternatives would require
                         these people to form a food stamp household with others in their home.
                         Thus, people who must share housing with others would either become
                         ineligible or receive reduced benefits when their income and assets were
                         combined with those of the other household members. The Extended
                         Family alternative would also hurt parents with minor children who
                         must live with their parents or siblings because they could no longer
                         establish separate households.




                          Page 29                          GAO/RCED-99-137   Food Stamp Household   Definition   Alternatives
                       Chapter 4
                       Alternative   Household   Definitiona




                       Two alternatives would hurt some near-homeless people and increase
                       participation of others. Currently, unrelated people and adults with
                       minor children who live with their parents or siblings may form sepa-
                       rate households if they purchase and prepare their meals separately but
                       adults (with no minor children) living with their parents and siblings
                       living together may not. The Modified Economic Unit could cause par-
                       ents with minor children and unrelated individuals who must share
                       housing to become ineligible because they could no longer form separate
                       food stamp households. However, some adults living with their parents
                       and siblings living together could become eligible for benefits because
                       they could form separate food stamp households under the Modified
                       Economic Unit alternative if they had their own cooking facilities. The
                       Financial Dependency alternative would decrease participation by some
                       parents with minor children who would be unable to prove that they are
                       not dependent upon support from others in their home. However, partic-
                        ipation would increase for some adults living with their parents and sib-
                        lings living together who could prove their independence of support
                        from others in their home.

Other Special Groups   Some alternatives may affect participation by groups that must share
                       housing with unrelated people or distant relatives. The alternatives that
                       require everyone living together to form a single household would
                       decrease participation, while the alternatives that allow more separate
                       households by dropping the purchase and prepare requirement would
                       increase participation. Migrant farm workers and refugees may share
                       their living space with others but may not necessarily share their
                       resources to purchase and prepare their food together. Native Ameri-
                       cans we interviewed told us that their traditions often require them to
                       share their homes with their relatives.

                        Migrant Farm Workers: The alternatives that require everyone living in
                        one dwelling or using common cooking facilities such as the Single
                        Dwelling or the Modified Economic Unit alternatives could decrease par-
                        ticipation by migrant farm workers. According to a state program offi-
                        cial, migrant farm workers could lose eligibility if they are required to
                        apply for food stamps with people who live with them. A state official
                        said migrant farm workers traveling with their families must often
                        share dwellings with one or more other families. This threat to eligibility
                        is not a current problem because unrelated families who do not purchase
                        food and prepare meals together may apply separately. However. the
                        official warned that requiring everyone living together to be one food
                        stamp household would cause many migrant farm workers to become
                        ineligible. On the other hand, alternatives that drop the purchase and


                        Page 30                           GAO/RCED90-137   Food Stamp Household   Defdtion   Alternatives
Chapter 4
Alternative   Household   Lkfinitions




prepare requirement, such as the Legal Responsibility alternative, could
increase migrant farm workers’ participation by allowing them to form
more separate households.

Native Americans: Native Americans would probably not lose benefits
under the alternatives that require everyone living in one dwelling to
form a single food stamp household. According to Native Americans we
interviewed, members of the same family may share a dwelling for
periods varying from 1 week to several months. During that time, the
family members would customarily expect to share their food as well as
their shelter. Therefore, Native Americans would not be adversely
affected by a definition such as the Single Dwelling alternative because
they cannot form separate households under the current definition.
However, Native Americans also said that because they purchase and
prepare meals together, they receive lower benefits than other food
stamp recipients. Under an alternative that dropped the purchase and
prepare requirement, such as the AFIXZ or Legal Responsibility alterna-
tives, Native Americans could form separate households and receive
greater benefits.

Refugees: The alternatives requiring everyone living together to form
one food stamp household would not cause most refugees to become
ineligible or receive fewer benefits than they receive under the current
definition. For example, refugee assistance groups we contacted such as
the Indo-Chinese Mutual Assistance Association told us that most refu-
gees from Southeast Asia maintain group-living arrangements with rela-
tives. They said refugee families typically purchase food and prepare
meals together and would, therefore, be a household under the current
definition. Thus, adopting a more restrictive definition of a household,
such as the Single Dwelling alternative, would not adversely affect refu-
gees from Southeast Asia because when they share housing they usually
share their food as well. However, one group said that requiring certain
family members, such as adults and their parents, to apply together is
unfair. Alternatives such as the Legal Responsibility or AFDCalterna-
tives would increase participation as more refugees became eligible by
 forming households that are separate from those with whom they live.




 Page 31                           GAO/RCED-90-137   Food Stamp Household   Definition   Alternatives
                         Chapter 4
                         Alternative   Household   Definitions




Impact of Alternatives   tives would increase the Food Stamp Program’s benefit costs. The Single
on Program Benefit       Dwelling, Modified Economic Unit, Modified Single Dwelling, and
costs                    Extended Family alternatives would create fewer and larger households,
                         provide fewer benefits, and therefore cost less than the Food Stamp Pro-
                         gram does under the current definition. The Nuclear Family, Modified
                         1977 Act, Legal Responsibility, AFDC, and Individualized Benefits alter-
                         natives would create more separate households, provide higher benefits,
                         and cost more than the Food Stamp Program does under the current def-
                         inition We could not determine whether the Standard and Financial
                         Dependency alternatives would increase or decrease benefit costs
                         overall because these alternatives would cause benefits to increase for
                         some categories of food stamp participants and to decrease for others.

                         Table 4.1, shown above, summarizes the potential relative benefit costs
                         of the 11 alternatives. Because no data that would permit precise calcu-
                         lation of the costs of each alternative was available, the alternatives’
                         benefit costs are based on estimates of the impact of each alternative on
                         program participation by household and represents an arrangement of
                         the alternatives from least to most costly.


                          The complexities of the current definition stem from the numerous
Impact of Simplifying     exceptions made to the basic rule that people who purchase food and
the Definition            prepare meals together constitute a food stamp household. This com-
                          plexity, according to a program official in one state, may be the cause of
                          many caseworker errors.? Some Service and state officials agreed that
                          the current definition is too complex.

                          Identifying household members is only part of a complex eligibility pro-
                          cess. Regardless of changes, caseworkers said it will always be difficult
                          to determine the permanent household members because some food
                          stamp recipients tend to be transient. Determining how expenses are to
                          be prorated between household members and nonhousehold members is
                          responsible for part of the complexity encountered by caseworkers. Cur-
                          rently, expenses are based on the actual contributions made by each
                          person residing in the house, but there are special provisions for some
                          nonhousehold members, such as those barred from participation due to


                          “We concluded that the current household definition does not significantly contribute to caseworker
                          errors in Food Stamp Program: The Household Definition Is Not a Major Source of Caseworker Errors,
                          (GAO/Rm-90-183,      July 26, 1990).



                           Page 32                          GAO/RCEDW137    Food Stamp Household     Definition   Alternatives
Chapter 4
Alternative   Household   Definitions




intentional program violations. None of our alternatives would affect
these special provisions.

The impact of our alternatives on program simplicity are summarized in
table 4.1. We determined that 7 of our 11 alternatives are simpler than
the current definition. The Single Dwelling and Modified Single Dwelling
alternatives would be simpler because they make household members
easier to identify and limit the extent of proration necessary as
caseworkers determine eligibility and benefits. The Modified 1977 Act
alternative would be simpler because it does not require caseworkers to
determine the relationship of applicants to others in their homes, i.e.,
adults living with their parents and siblings living together. The Nuclear
Family, Legal Responsibility, and AFDCalternatives would simplify the
definition because they remove the purchase and prepare provision,
which, according to caseworkers, is difficult to verify. In addition, the
Legal Responsibility, AFDC, and Standard alternatives remove some of
the special exceptions that make the current definition complex. Also,
 according to Service and state program officials and caseworkers, since
the Modified 1977 Act, Legal Responsibility, and AFDCalternatives move
the household definition closer to the definition used in the AFDCpro-
 gram, they make the caseworker’s job less complex.

Some alternatives that seem simpler than the current definition could
become more complex when they are implemented. For example, using
the Modified Economic Unit as a definition of a food stamp household
would be simple because neither caseworkers nor applicants would have
to make any judgmental decisions regarding the relationships of house-
hold members. However, program officials in one state told us that
caseworkers would have to make home visits, which are not required by
the current Food Stamp Program, to verify that separate cooking facili-
ties were available before approving an application for separate house-
hold status.

 On the one hand, the Individualized Benefit alternative, which requires
 every person living together to be a separate household for food stamp
 purposes, would seemingly make caseworkers’ jobs easier because the
 household concept would be eliminated. However, it would make the eli-
 gibility determination process more complex because household
 expenses would have to be divided among a group of individuals living
 together. For parents with minor children, income and expenses would
 have to be prorated among family members to determine the eligibility
 and benefits of individuals. Thus, for a family of four, a caseworker
 would be required to perform four separate eligibility determinations


 Page 33                           GAO/RCED@O-137   Food Stamp Household   Definition   Alternatives
                  Chapter 4
                  Alternative   Household   De!lnitions




                  instead of the single determination required by the current household
                  definition.


                  In summary, we developed 11 alternative household definitions that
Conclusions       differ in their levels of program simplification, in the extent to which
                  they affect the eligibility of different groups, and in their impact on ben-
                  efit costs and overall participation, including that of the near-homeless.
                  -4lthough none of the alternative definitions would meet the objectives
                  of simplifying program administration without reducing participation or
                  increasing current benefit costs, two of the alternatives-Nuclear
                  Family and Modified 1977 Act-would         come close to meeting these
                  objectives. Both would simplify program administration while only
                  slightly increasing participation and benefit costs. In addition, the Modi-
                   fied 1977 Act alternative would allow adults living with their parents
                   and siblings living together to form a separate food stamp household if
                  they purchase and prepare meals separately. This provision would
                   remove a disincentive to sharing housing, which could help some near-
                   homeless obtain food stamp benefits.


                   The Food and Nutrition Service stated that it has no major problems
Agency Comments    with the report. It suggested several technical changes to the report,
                   which have been incorporated where appropriate.

                   The Service pointed out that the definition of a household is a key com-
                   ponent of the Food Stamp Program and has been shaped by the Con-
                   gress to assist America’s poor and avoid program abuse. It mentioned
                   that our companion report (GAO/RCED-90-183, July 26, 1990) pointed out
                   that the current definition is not as problematic for caseworkers as had
                   been suspected when the Congress asked for the study. Therefore, it
                   cautioned that any change to the definition be made only after very
                   careful consideration of the potential for introducing error into an area
                   which it believes to be generally understood.




                   Page 34                           GAO/RCED-ml37   Food Stamp Household   Definition   Alternatives
Page 35   GAO/RCED-@t&137   Food Sbmp Iiawbld   Ddlnition   Altematives
Appendix I

Alternative Household Definitions
With Analysis

                               The following is a discussion of 11 alternatives to the current definition
                               of a food stamp household. We derived these alternatives by manipu-
                               lating the existing provisions of the current definition. Each alternative
                               is discussed in terms of its impacts on program participation and direct
                               benefit costs, homelessness, and program simplicity.


                               A household is composed of
Single-Dwelling
Alternative                l   a group sharing living quarters or
                           l   an individual living alone.


How the Alternative            This alternative
Changesthe Current Rules .   discards the “customarily purchase and prepare meals together” con-
                             cept by grouping all individuals who live together into one food stamp
                             household,
                             reverses the McKinney Act provisions that allow parents of minor chil-
                             dren who share a dwelling with relatives to form a separate household,
                             prevents elderly or disabled individuals from forming separate food
                             stamp households,
                             applies the gross income test to households containing elderly or dis-
                             abled members and limits all households to $2,000 in assets,
                             eliminates the gross income limit test (165 percent of poverty level) for
                             determining whether a household with a disabled elderly member who is
                             unable to prepare his or her own meals can claim separate household
                             status, and
                           . prevents individuals who are not related to others in their living
                             quarters and who purchase and prepare meals separately from forming
                             separate households.


Impact on Participation        According to state and Service program officials, some current food
and Direct Benefit Costs       stamp recipients may lose eligibility under this alternative. Food stamp
                               applicants would no longer be able to state that individuals with signifi-
                               cant income living at the same address purchase and prepare meals sep-
                               arately; thus these individuals would be excluded from their
                               applications. Individuals living with other, unrelated individuals could
                               receive reduced food stamp allotments as they are combined with other
                               food stamp households. In addition, some elderly or disabled recipients
                               who qualified under the current income rules would no longer qualify
                               for food stamps.


                               Page 36                GAO/RCED%I-137   Food Stamp Household   Definition   Alternatives
                             Appendix I
                             Alternative   Household   Definitions
                             With Analysis




                             By grouping more recipients in a dwelling together, this alternative
                             would reduce benefit costs by lowering per-person benefits because of
                             assumed economies of scale and by causing more persons to be ineligible
                             for the program.


Impact on Homelessness       This alternative has no effect on the eligibility or benefits of those who
                             are already homeless. However, it could hurt some of the near-homeless
                             because it removes the Mckinney Act provisions, which were meant to
                             prevent homelessness. For example, parents with minor children who
                             formed households separate from those of their relatives under the
                             McKinney Act-households       that, therefore, excluded a relative with sig-
                             nificant income-may no longer be eligible for food stamps or may
                             receive reduced benefits. Officials in one state said this alternative could
                             discourage low-income people from sharing housing.


Impact on Program            Service and program officials in one state agreed that this alternative
Simplicity                   would greatly simplify the caseworker’s job because it allows fewer per-
                             sons to form separate households. Thus, with only one food assistance
                             unit per address, caseworkers would no longer be required to determine
                             (1) relationships within the home, (2) who purchases and prepares
                             meals together, or (3) how to prorate household expenses between
                             household members and nonmembers.

                             According to some state officials, this alternative may not simplify the
                             caseworkers’ tasks in cases where it is difficult to define a dwelling.
                             This alternative would require that a precise definition of “living
                             quarters” be developed so that caseworkers could decide which individ-
                             uals in the applicant’s dwelling should be included in the household.


                             A food stamp household is composed of
Modified Economic
Unit Alternative         l spouses living together;
                         l parent(s) living with their natural, adopted, or step children under the
                           age of 18;
                         l a group of individuals living together who customarily share their
                           resources to purchase food and who share common cooking facilities;
                         l an individual living with others who does not customarily share
                           resources to obtain food supplies and share common cooking facilities;
                           or
                         . an individual living alone.
                                                   *

                              Page 37                          GAO/RCEDw)-137   Food Stamp Household   Definition   Alternatives
                               Appendix I
                               Alternative   Household   Definitions
                               With Analysis




How the Alternative            This alternative changes the current rules in the following ways:
Changesthe Current Rules   l It removes provisions that require siblings living together or adults
                             living with their parents to be one food stamp household. Individuals in
                             these living arrangements could apply separately if they do not share
                             resources to obtain food and share common cooking facilities.
                           l It modifies the McKinney Act provisions that allow parents of minor
                             children to form food stamp households separate from those of their rel-
                             atives by allowing them to apply separately if they purchase food sepa-
                             rately and do not share common cooking facilities.
                           . It replaces the purchase and prepare concept with a household concept
                             based on whether individuals “customarily share their resources
                             together to purchase food and share common cooking facilities.”


Impact on Participation        According to state program officials, this alternative would restrict food
and Direct Benefit Costs       stamp eligibility. Although adults living with their parents and siblings
                               living together would be allowed to form separate households if they
                               purchase food separately and do not share cooking facilities with others
                               in the dwelling, most low-income housing units do not have more than
                               one cooking facility. Thus, elderly or disabled individuals or parents of
                               minor children who formed separate households under the current defi-
                               nition would not be able to do so under this alternative if they did not
                               have separate cooking facilities.

                                Food stamp benefit costs would decrease under this definition. State
                                officials said overall eligibility would be restricted, and individuals who
                                previously formed separate households could become part of larger
                                group households because they do not have separate cooking facilities.


Impact on Homelessness          This alternative has no effect on the eligibility or benefits of those who
                                are already homeless. However, it could have a negative impact on some
                                of the near-homeless because disincentives remain that could discourage
                                some low-income people from sharing housing. It also creates a new bar-
                                rier to establishing a separate food stamp household under one roof. For
                                example, people who wish to form separate households would find it
                                easier to purchase and prepare meals separately than to obtain access to
                                separate cooking facilities. By defining a household as being composed
                                of those who share resources to buy food and who share cooking facili-
                                ties, the definition gives low-income people and families incentives to
                                live apart from each other in order to increase their food stamp benefits.



                                Page 38                           GAO/RCED-30-137   Food Stamp Household   Definition   Alternatives
                                   Appendix 1
                                   Alternati~    Household   Deflnitiona
                                   with Analysis




Impact on Program                  According to state program officials, this definition does not simplify
                                   program administration. In addition, caseworkers must also establish
Simplicity                         those in the household who share income or assets to obtain food and
                                   those who share cooking facilities.

                                   State officials said this alternative may also require developing addi-
                                   tional regulations to define “customarily sharing income or assets to
                                   purchase food and sharing cooking facilities” because this is different
                                   from the current purchase and prepare concept. They also said that
                                   caseworkers would have to visit applicants’ homes to verify that clients
                                   had separate cooking facilities in their home.


                                   A food stamp household is composed of
Modified Single-
Dwelling Alternative   l            a group of individuals sharing living quarters or
                       l            an individual living alone.

                                    This alternative is the same as the Single Dwelling Alternative except
                                    that rather than allowing elderly or disabled and disabled elderly indi-
                                    viduals to form separate food stamp households, it allows them to
                                    exclude some of their income counted toward income limits and have
                                    additional income deductions in determining eligibility and coupon
                                    allotment.


How the Alternative                 This alternative
Changesthe Current Rules   l        eliminates the “customarily purchase and prepare meals together”
                                    requirement,
                           l        prevents elderly or disabled individuals from forming separate food
                                    stamp households,
                           l        applies the gross income test to households containing elderly or dis-
                                    abled members and limits all households to $2,000 in assets,
                           l        lowers the gross income limit test from 165 percent to 130 percent of the
                                    poverty level for determining eligibility of a household with a disabled
                                    elderly member who is unable to prepare his or her own meals,
                               l    reverses the McKinney Act provisions that allow parents of minor chil-
                                    dren who share a dwelling with relatives to form a separate household,
                               l    prevents individuals who are not related to others in their dwelling and
                                    who purchase and prepare meals separately from forming separate
                                    households, and



                                     Page 39                          GAO/RCEDW137   Food Stamp Household   Definition   Akematives
                               Appendix I
                               A.ltemative   Household   Definitions
                               With Analysis




                           l   allows additional income deductions for households with elderly or dis-
                               abled members.


Impact on Participation        According to Service and some state program officials, some current
                               food stamp recipients would no longer be able to state that individuals
and Direct Benefit Costs       with significant income living at the same address purchase and prepare
                               meals separately; thus such individuals would be excluded from their
                               household.

                               In addition, they said that some elderly or disabled recipients who quali-
                               fied under the current income rules would no longer qualify for food
                               stamps under this alternative. Currently, households with elderly or dis-
                               abled members are not subject to the gross income test. However, this
                               alternative would require that households containing elderly or disabled
                               individuals, or disabled elderly individuals, meet the gross income eligi-
                               bility standards. Although persons who are elderly or disabled or both
                               elderly and disabled would not be allowed to form households separate
                               from those of the others in their dwelling, they would be allowed addi-
                               tional income deductions. Service officials said that such individuals
                               could be disqualified if the income deduction is too small to offset the
                               gross income test.

                               Service and state program officials said that some parents with minor
                               children who formed households separate from those of their relatives
                               under the McKinney Act-households       that, therefore, excluded a rela-
                               tive with significant income from the eligibility or benefit calculation-
                               would become ineligible for food stamps because this alternative
                               reverses McKinney Act provisions. Individuals living with other, unre-
                               lated individuals who were formerly considered separate households
                               would see their food stamp allotments reduced as they are combined
                               with other food stamp households.

                               According to Service and state program officials, direct benefit costs
                               would decrease if this alternative were implemented because caseload
                               and the number of participants would likely decrease. This alternative
                               would probably produce fewer single person households because indi-
                               viduals and groups who purchase and prepare meals separately from
                               others in their living quarters would not be allowed to form separate
                               households. Because individuals in single-person households generally
                               receive higher food stamp benefits than members of group households,
                               this definition would also result in lower average per-person benefit
                               costs.
                                                       .

                                Page 40                          GAO/RCJD-XL137   Food Stamp Household   Definition   Alternatives
                         Appendix I
                         Alternative   Household   Definitions
                         With Analysis




Impact on Homelessness   This alternative has no effect on the eligibility and benefits of those
                         people who are already homeless. However, it could harm some of the
                         near-homeless because it removes McKinney Act provisions which were
                         meant to prevent homelessness. Some low-income parents and their
                         minor children could lose food stamp benefits under this alternative,
                         according to Service officials. They said that if the income of others
                         living in the home exceeded eligibility rules, or if they failed to comply
                         with income and assets disclosure requirements, the entire household
                         would not qualify for food stamps. Service officials also said that some
                         parents and their minor children may choose to live apart from others in
                         order to qualify for or increase their food stamp benefits. Thus, this
                         alternative may provide a disincentive for people to share housing.


Impact on Program        Some state officials said this alternative could greatly simplify the
                         caseworker’s job because it allows fewer people to form separate house-
Simplicity               holds. Thus, officials in one state explained, with only one food assis-
                         tance unit per address, caseworkers would no longer have to prorate
                         household expenses between household members and nonmembers as
                         they do currently, except in cases in which an individual living with an
                         applicant is automatically not eligible for food stamps. On the other
                         hand, Service officials said this alternative may create other complexi-
                         ties because, although it simplifies the household definition, it would
                         create a complex eligibility determination process.

                          In contrast with the current definition, this alternative would not
                          require caseworkers to define a household by determining relationships
                          in the home such as familial relationships or those in the dwelling who
                          purchase and prepare meals together. Rather, a household would simply
                          be defined as everyone who shares a dwelling. On the other hand, Ser-
                          vice officials thought that a complex system of deductions from income
                          would be just as bad or worse to administer than is the current house-
                          hold definition.

                          Other state officials said this alternative may not simplify the
                          caseworker’s tasks in cases in which the living arrangement is difficult
                          to determine. Caseworkers and supervisors said this alternative would
                          require precise regulatory definitions of “dwelling” if it were to be suc-
                          cessfully implemented.




                          Page 41                           GAO/lK2D9ll-137   Food Stamp Household   Definition   Alternatives
                                Appendix I
                                Alternative   Household   Deffnitlo~
                                with Analysis




                                 A food stamp household is composed of
Extended Family
Alternative                l a group of individuals sharing living quarters who are related to one
                             another by blood or marriage (in other words, parents and their chil-
                             dren, spouses, siblings, grandchildren, nieces and nephews);
                           l a group of individuals sharing living quarters who are not related to
                             each other but who customarily purchase and prepare meals together;
                           l an individual living alone; or
                           . an individual sharing living quarters with others to whom he or she is
                             not related and who customarily purchases and prepares meals sepa-
                             rately from the others.


How the Alternative              This alternative
Changesthe Current Rules.        reverses the McKinney Act provisions that allow parents of minor chil-
                                 dren sharing a dwelling with relatives to form a separate household;
                               . prevents elderly or disabled individuals from forming food stamp house-
                                 holds separate from those of their relatives, even if they purchase and
                                 prepare meals separately;
                               . prevents disabled elderly individuals who are unable to prepare their
                                 own meals from claiming separate household status even if their rela-
                                 tives have a gross income of less than 165 percent of the poverty level;
                                 and
                               . applies the gross income test to households containing elderly or dis-
                                 abled members and limits all households to $2,000 in assets.


Impact on Participation          Some currently eligible food stamp recipients could lose eligibility for
and Direct Benefit Costs         food stamps under this alternative. Some elderly or disabled recipients
                                 who qualified under the current income rules may no longer qualify for
                                 food stamps because they could not form separate households and their
                                 maximum allowable income would be restricted. Disabled elderly recipi-
                                 ents who are unable to prepare their own meals would also be held to
                                 the income standard (130 percent of poverty level) that currently
                                 applies to other households.

                                 Direct benefit costs would decrease somewhat if this alternative were
                                 implemented because it restricts the number of eligible participants.
                                 This definition could produce fewer single-person households because
                                 elderly or disabled individuals would not be allowed to form separate
                                 households from relatives with whom they live. Because individuals



                                  Page 42                          GAO/ECE&S@127   Food Stamp Household   Definition   Alternatives
                             Appendix I
                             Alternative   Household   Deflnitions
                             With Analysis




                             living in group households generally receive lower benefits than individ-
                             uals living alone, this definition would, most likely, result in lower
                             average per-person costs and lower total benefit costs.


Impact on Homelessness       This alternative has no effect on the eligibility or benefits of those who
                             are already homeless. However, it could harm some of the near-homeless
                             because it removes the McKinney Act provisions meant to prevent
                             homelessness. According to food stamp officials in one state, this alter-
                             native would discourage people from sharing housing with their rela-
                             tives and encourage them to live alone or with persons whom they have
                             no obligation to financially support. Further, this alternative retains the
                             current provisions that require adults living with their parents and sib-
                             lings living together to be part of the same food stamp household. This
                             provision could provide a disincentive for sharing housing, according to
                             welfare advocates.


Impact on Program            Although this alternative applies the same income criteria to all cases, it
Simplicity                   actually makes program administration more complex. Service and state
                             program officials agreed that this alternative requires more extensive
                             verification than the current definition. Food stamp applicants must
                             currently verify the identity of everyone in the food stamp household
                             by providing birth certificates and other documents. Under this alterna-
                             tive, applicants could be required to verify the identity of all individuals
                             in their residence to prove how they are or are not related to each other.
                             For example, in some cases, applicants might be required to provide
                             their parents’ birth certificates to prove or disprove a sibling or aunt/
                             nephew relationship. State and Service officials said that this would
                             make household composition difficult to determine and would also be
                             burdensome to applicants.


                              A food stamp household is composed of
Financial Dependency
Alternative              l    an individual living alone;
                         l    spouses sharing living quarters;
                         l    parent(s) and their natural, step, or adopted children under 18 years of
                              age who share living quarters;
                         l    individuals living together in a group consisting of a head of household
                              (the applicant) and his/her dependents; or
                         l    individuals living with others who do not receive 50 percent or more of
                              their financial support from another person in the dwelling.


                              Page 43                          GAO/RCEIMO-137   Food Stamp Household   Definition   Alternatives
                                       Appendix I
                                       Altematlve    Houaehold   De!Inltlons
                                       with Analysis




                                       The head of the household living with others must claim a person as a
                                       dependent if he or she provides over 50 percent of the person’s total
                                       support. This support would include in-kind support such as rent-free
                                       shelter in the provider’s home, food, and clothing. Dependents can be
                                       any of the following:

                           l           descendants (children and grandchildren),
                           l           ancestors (parents, step-parents, and grandparents),
                           .           siblings and step-siblings,
                           l           nieces and nephews,
                           .           aunts and uncles,
                           .           any of the above in an in-law relationship with the head of the house-
                                       hold, or
                           .           others who have their principal place of abode in the home of the head
                                       of household.

                                       Individuals who demonstrate that they provide more than 50 percent of
                                       their own support can apply as separate food stamp households.


How the Alternative      The financial dependency                              alternative changes the current rules in the
Changesthe Current Rules followingways’
                               l     It discards the concept of whether individuals who live together custom-
                                     arily purchase and prepare their meals together in favor of a household
                                     based on financial support.
                               l     It prevents elderly or disabled individuals from forming separate food
                                     stamp households unless they can document that they provide more
                                     than 50 percent of their total support.
                               l     It reverses the McKinney Act provisions that allow parents of minor
                                     children who share a dwelling with others to establish separate house-
                                     hold status, unless they can document that they provide more than 50
                                     percent of their total support.
                                   l It applies the gross income test to households containing elderly or dis-
                                     abled individuals and limits all households to $2,000 in assets.
                                   . It allows adults living with their parents and siblings living together to
                                     apply separately for food stamps if they meet the financial indepen-
                                      dence test.


Impact on Participation                 Service and state program officials said that participation would prob-
and Direct Benefit Costs                ably be restricted under this alternative because it would be difficult for
                                        participants to document their financial independence. Siblings living


                                        Page 44                           GAO/RCEB9O-137   Food Stamp Household   Deftition   Alternatives
                         Appendix I
                         AItemative    Household   Definitions
                         With Analysis




                         together and adults living with parents could apply separately for food
                         stamps if they could demonstrate their financial independence. How-
                         ever, low-income people living with others who provide their shelter
                         could become ineligible to form separate households because the value
                         of the in-kind shelter cost could exceed their total support.

                         According to Service officials, benefit costs which depend on overall
                         caseload and the number of individuals forming single-person house-
                         holds could increase or decrease under this alternative. If a significant
                         number of recipients qualified as single-person households, benefit costs
                         would increase because individuals forming separate households usually
                         receive higher benefits than they would receive as members of a group
                         household. On the other hand, they said benefit costs could also
                         decrease because some people would be forced to apply for benefits as
                         one household.


Impact on Homelessness   This alternative has no effect on the eligibility or benefits of those who
                         are already homeless. Although it does not require adults, their parents,
                         and siblings who live together to apply for food stamps together, it
                         could create disincentives to low-income people sharing housing. For
                         example, some individuals could become ineligible for food stamps if
                         they share housing with another who pays most or all of the housing
                         costs. This alternative would, in some cases, reverse the McKinney Act
                         provisions which allow parents of minor children to become a food
                         stamp household separate from their parents or siblings with whom
                         they share housing.


Impact on Program        According to Service and state program officials, this alternative would
Simplicity               complicate the application process for potential participants and slow
                         caseworkers’ eligibility determinations. They said it would require the
                         caseworker to obtain considerably more documentation from applicants
                         than the current definition requires. For example, state program offi-
                         cials said caseworkers would have to obtain documentation of the
                         income and support provided by each household member in order to
                         verify financial independence. They also said that food stamp appli-
                         cants could be found ineligible merely because a nonparticipating
                         member would not cooperate with the applicant.




                          Page 46                          GAO/RCRIMO-137   Food Stamp Household   Definition   Alternatives
                                   Appendix I
                                   AIt.emative Household   DefInItIons
                                   With Analysis




                                   A household is composed of:
Standard Alternative
                           . spouses living together;
                           l parent(s) living with their natural, step, or adopted children under the
                             age of 18;
                           . a group of individuals living together who customarily purchase and
                             prepare meals together;
                           l an individual living with others who purchases and prepares meals
                             separately;
                           . an individual living alone; or
                           l a disabled, elderly individual who lives with others and is unable to
                             purchase and prepare meals separately.


How the Alternative                This alternative
Changesthe Current Rules .         drops the requirement that parents and adult children and siblings
                                   living together form a single food stamp household;
                               l   lowers the gross income limit test from 165 percent to 130 percent of the
                                   poverty level for determining whether a household with a disabled eld-
                                   erly member, who is unable to prepare his or her own meals, can claim
                                   separate household status; and
                               l   applies the gross income test to households containing elderly or dis-
                                   abled members and limits all households to $2,000 in assets.


Impact on Participation            This alternative expands eligibility for some food stamp participants
and Direct Benefit Costs           and restricts it for others. Adult children living with their parents and
                                   siblings living together could apply as separate households if they pur-
                                   chased and prepared food separately. The elderly or disabled could still
                                   apply as separate households, but they would be subject to the same
                                   gross income test as other households. However, those elderly who are
                                    disabled and unable to prepare their own meals could still form a sepa-
                                    rate household, but the household with whom they lived would be sub-
                                   ject to the gross income test.

                                    Benefit costs for this alternative definition are difficult to estimate
                                    because participation could either increase or decrease slightly. Some
                                    elderly and disabled participants would no longer be eligible because
                                    they would not pass the gross income test. This decrease in participation
                                    would be offset by the increase in households formed by adults living
                                    with their parents and siblings forming separate households.



                                    Page 46                        GAO/RcEDw)-137   Food Stamp Household   Definition   Alternatives
                             Appendix I
                             Alt.emative   Household   Definitions
                             with Analysis




Impact on Homelessness       This alternative has no effect on the eligibility or benefits of those who
                             are already homeless. However, according to state program and Service
                             officials, this alternative would remove any disincentives for low-
                             income-homeless or near-homeless-people to share housing because
                             it allows adults living with parents and siblings living together to form
                             separate households if they purchase and prepare food separately.


Impact on Program            State program and Service officials said this alternative has fewer
                             exceptions and special cases than the current definition and, therefore,
Simplicity                   is somewhat simpler. However, many of the current exceptions to the
                             basic household rules remain because the alternative allows for many
                             variations of a household that depend upon who purchases and
                             prepares meals together. For example, elderly and/or disabled parents
                             with minor children, adult children, and siblings could all establish sepa-
                             rate households if they purchase and prepare their food separately.
                             Because this alternative would allow more than one food stamp house-
                             hold in a dwelling, state officials said that caseworkers would have to
                             prorate expenses between household members and nonmembers in some
                             cases.


                              A food stamp household is composed of
Nuclear Family
Alternative              . an individual living alone,
                         . spouses who live together,
                         . parents and their natural, adopted, or step children who live together
                           unless (1) at least one parent is elderly or disabled or (2) an adult child
                           is the parent of minor children,
                         l adults living with children under the age of 18 under their parental
                           control,
                         l siblings who live together unless (1) one sibling is elderly or disabled or
                           (2) one sibling is the parent of minor children,
                         l an elderly or disabled person and spouse, or
                         l a group of individuals who live together and wish to apply for food
                           stamps as a single household.


How the Alternative           This alternative changes the current rules in the following ways:
Changesthe Current Rules .    It discards the purchase and prepare concept. Certain relatives are
                              required to apply for food stamps together, and others may apply
                              together if they choose,


                              Page 47                           GAO/RCEB9@137   Food Stamp Household   Definition   Alternatives
                               Appendix I
                               Alternative   Household   Definitions
                               With Analysis




                           l   It separates the food stamp program from the Thrifty Food Plan. By
                               allowing all unrelated or not closely related individuals to apply sepa-
                               rately for food stamps, this definition disregards whether individuals
                               are able to take advantage of economies by preparing food together.


Impact on Participation        According to Service and state program officials, food stamp participa-
                               tion would increase somewhat under this alternative because it slightly
and Direct Benefit Costs       liberalizes the household concept. Those related individuals required to
                               apply together under the current definition would also be required to
                               apply together under this alternative. However, the current definition
                               requires that individuals living with others state that they purchase and
                               prepare meals separately in order to qualify as a separate household.
                               According to state officials and county caseworkers, applicants gener-
                               ally say that they purchase and prepare meals separately even if this is
                               not the case if separate household status is to their advantage. This
                               alternative allows individuals to choose to apply separately or together
                               without raising the purchase and prepare issue. Service officials said
                               they would expect some unrelated individuals to apply separately if
                               they would receive a higher food stamp allotment as a separate
                               household.

                               According to Service and state program officials, the direct benefit cost
                               would increase somewhat as unrelated individuals form separate
                               households.


Impact on Homelessness          This alternative has no effect on the eligibility or benefits of those who
                                are already homeless. However, by allowing parents of minor children to
                                become food stamp households separate from their parents and siblings
                                with whom they share housing, this alternative retains the McKinney
                                Act provisions meant to prevent homelessness. Also, adults would still
                                be required to apply with their parents, and siblings would be required
                                to apply together. Welfare advocates said that this provision provides a
                                disincentive to share housing and, therefore, may hurt both the home-
                                less and the near-homeless.


Impact on Program               According to state program officials and caseworkers, this alternative is
Simplicity                      simpler than the current definition because it does not require them to
                                determine those in the home who purchase and prepares meals together.
                                Because this alternative discards the purchase and prepare criteria,
                                recipients would no longer have an incentive to misrepresent their


                                Page 43                          GAO/RCED-90-137   Food Stamp Household   Definition   Alternatives
                               Appendix I
                               Alternative   Household   Definitions
                               With Analysis




                               eating customs in order to receive higher food stamp benefits.
                               Caseworkers said that the current definition penalizes participants who
                               are honest about their eating arrangements because they get fewer food
                               stamps as part of a group household if they purchase and prepare meals
                               together.


                               A food stamp household is composed of
Modified 1977 Food
Stamp Act Alternative.       spouses living together;
                           . parent(s) living with natural, adopted, or step children under the age of
                             18;
                           . a group of individuals living together who customarily purchase and
                             prepare meals together;
                           . an individual living with others who customarily purchases and
                             prepares meals separately; or
                           . an individual living alone.



How the Alternative            The Modified 1977 Act alternative removes provisions requiring that
Changesthe Current Rules       siblings living together or adults living with their parents form one food
                               stamp household. Individuals in these living arrangements could apply
                               separately if they purchase and prepare meals separately.


Impact on Participation        According to Service and state program officials, this alternative liberal-
and Direct Benefit Costs       izes the food stamp household definition by making some individuals eli-
                               gible who are currently ineligible for food stamps as a separate
                               household. Adults living with their parents and siblings living together
                               but purchasing and preparing meals separately would be allowed to
                               form separate households, regardless of whether they are parents them-
                               selves. Because these individuals are allowed to form separate house-
                               holds, they could exclude from the eligibility calculation their parents’
                               or siblings’ income and assets, which could have made them ineligible
                               under the current definition. This alternative would not change eligi-
                               bility for elderly or disabled individuals. And parents of minor children
                               who were allowed to form separate households under the McKinney Act
                               would also be allowed to do so under this alternative if they purchased
                               and prepared meals separately.

                               According to Service and state program officials, food stamp benefit
                               costs would increase slightly under this alternative because adults living
                               with their parents and siblings would form separate households and


                               Page 49                           GAO/RCED9@137   Food Stamp Household   Definition   Alternatives
                             Appendix I
                             Alternative   Household   Definitions
                             With Analysis




                             receive a larger benefit than they received as part of a group household.
                             Service officials said they did not expect costs to increase very much
                             under this alternative because they do not think that a very large popu-
                             lation would be affected.


Impact on Homelessness       This alternative has no effect on the eligibility or benefits of those who
                             are already homeless. It retains the McKinney Act changes, which allow
                             parents of minor children to form food stamp households separate from
                             parents or siblings with whom they share housing. Adults living with
                             their parents and siblings living together could form separate food
                             stamp households if they purchased and prepared meals separately.
                             Thus, this alternative removes sections of the current household defini-
                             tion that welfare advocates said are a disincentive to sharing housing.
                             Service officials said this alternative might make adults living with their
                             parents and siblings more likely to share housing.


Impact on Program            According to Service and state program officials, this alternative would
                             simplify the Food Stamp Program. Officials in one state said
Simplicity                   caseworkers would still be required to establish those who purchase and
                             prepare meals together, and officials in another state pointed out that
                             caseworkers must prorate expenses between household members and
                             nonmembers. However, Service officials said this alternative is closer to
                             the AFDC assistance unit definition and could remove a source of confu-
                             sion and caseworker errors.


                              A household is composed of
Legal Responsibility
Alternative              . spouses living together;
                         l parent(s) living with their natural, adopted, or step children under the
                           age of 18;
                         l adults living with children under the age of 18 under their parental
                           control;
                         . an individual living alone or with others; or
                         . a group of individuals living together who have no legal responsibility to
                           financially support each other but choose to form a food assistance unit
                           together.

                              Legal responsibility would be defined in the Food Stamp Act rather than
                              by state law.
                                                    .


                              Page 60                           GAO/RCED90-137   Food Stamp Household   Definition   Altematives
                                   Appendix I
                                   Alternative   Houaehold   Definitions
                                   with Analysis




How the Alternative                This alternative changes the current rules in the following ways:
Changesthe Current Rules   l       It eliminates the purchase and prepare concept. All individuals who are
                                   legally responsible for each other would constitute a food stamp house-
                                   hold, regardless of whether they purchase and prepare meals together.
                                   Individuals living together but not legally responsible for each other
                                   each would be allowed to form a separate household.
                           l       It separates the food stamp program from the Thrifty Food Plan. By
                                   allowing all individuals who are not members of legal units to apply sep-
                                   arately for food stamps, this definition disregards whether individuals
                                   are able to take advantage of economies of scale by preparing food
                                   together.
                               l   It removes provisions that siblings living together and adult children
                                   living with parents must form a single food stamp household.


Impact on Participation            According to Service and state program officials, this alternative could
and Direct Benefit Costs           allow more individuals to qualify for food stamps as separate house-
                                   holds. Adults living with their parents, siblings living together, and indi-
                                   viduals would apply separately even if they do not purchase and
                                   prepare their meals separately. This would allow some individuals, cur-
                                   rently ineligible, to exclude the income of others with whom they live
                                   from the eligibility determination process and, consequently, become
                                   eligible.

                                   This alternative would allow more people to establish separate house-
                                   holds, and therefore increase benefit costs, according to Service and
                                   state officials. Benefit costs would increase because an individual’s ben-
                                   efits are greater than his or her share of the benefits of a group house-
                                   hold. Current benefit levels are based on the Thrifty Food Plan, which
                                   estimates necessary monthly food expenditures for households of
                                   various sizes. The Thrifty Food Plan assumes that households can take
                                   advantage of economies of scale: a household composed of a single indi-
                                   vidual receives a larger food stamp benefit than the amount that is
                                   added to the benefit when an additional individual joins a group food
                                   stamp household.


Impact on Homelessness              This alternative has no effect on the eligibility or benefits of those who
                                    are already homeless. However, it would remove all the provisions that
                                    require persons not financially responsible for one another to apply
                                    together for food stamps and, therefore, eliminate the disincentives for
                                    low-income people to share housing. By allowing adults living with their


                                    Page 61                           GAO/RCED-90-137   Food Stamp Household   Definition   Alternatives
                               Appendix I
                               Alternative   Household   Definitions
                               With Analysis




                               parents and siblings living together to form separate households, this
                               alternative eliminates the provisions that welfare rights advocates and
                               caseworkers identified as providing a disincentive for relatives to share
                               housing. It also retains the McKinney Act changes, which allow parents
                               of minor children to apply for food stamps separately from their parents
                               or siblings with whom they share housing.


Impact on Program              *4ccording to Service and state program officials, this alternative could
                               simplify program administration if legal responsibility were defined
Simplicity                     nationwide. They said that if it were left to state discretion, the defini-
                               tion could vary from state to state and be subject to judicial interpreta-
                               tion. Service officials said that caseworkers would no longer have to
                               discover who purchased and prepared meals together. However, state
                               officials said they might have to recalculate eligibility and benefits by
                               prorating shelter expenses among people living together to determine if
                               it is to the recipient’s advantage to apply separately. Caseworkers and
                               county caseworkers in one state also said this alternative could simplify
                               their work because it is similar to the AFDC definition.


                               A food stamp household is composed of
AFDC Alternative
                           l   an AFDC assistance unit consisting of parents and their natural, adopted,
                               or step children under the age of 18 or
                           l   an AFDC assistance unit consisting of children and their guardian or an-
                               other responsible adult receiving AFDCbenefits.

                               For groups living together with at least one member not receiving AFDC,
                               this alternative adopts the provisions of the legal responsibility alterna-
                               tive previously discussed.


How the Alternative            The    AFJX   alternative changes the current rules in the following ways:
Changesthe Current Rules   l   It eliminates the purchase and prepare concept.
                           l   It separates the food stamp program from the Thrifty Food Plan. By
                               allowing all individuals who are not members of AFDC or legal units to
                               apply separately for food stamps, this definition disregards whether
                               individuals are able to take advantage of economies of scale by pre-
                               paring food together.




                               Page 62                           GAO/RCED-90-137   Food Stamp Household   Definition   Alternatives
                               Appendix1
                               Alternative   Household   Definitions
                               with Analysis




                           l   It links the food stamp benefit with AFDCincome. Because food stamp
                               benefits would be determined by net AFDCincome, the need for a sepa-
                               rate food stamp calculation would be eliminated.


Impact on Participation        This alternative would increase benefit costs because in addition to
                               defining an AFDC unit as a food stamp household, this alternative fea-
and Direct Benefit Costs       tures the provisions of the legal responsibility definition, which
                               increases benefit costs. Benefits to AFDC households could increase
                               because adults living with their parents and siblings are allowed to
                               apply separately. While this alternative states that AFLX units are food
                               stamp households, it applies the provisions of the legal responsibility
                               alternative to mixed or non-Am households. Because the provisions
                               that apply to AFDC,mixed, and non-Am households all define a house-
                               hold as being composed of adults and children under 18, the definition is
                               consistent for those food stamp recipients who receive AFDC and those
                               who do not.

                               Also, unrelated individuals who currently purchase and prepare meals
                               together could form separate households and receive greater benefits.
                               Current benefit levels are based on the Thrifty Food Plan, which esti-
                               mates necessary monthly food expenditure for households of various
                               sizes. The Thrifty Food Plan assumes that households can take advan-
                               tage of economies of scale: a household composed of a single individual
                               receives a larger food stamp benefit than the amount that is added to
                               the benefit when an additional individual joins a group food stamp
                               household.


Impact on Homelessness          Welfare advocates and caseworkers said provisions of this alternative
                                remove some of the remaining disincentives to low-income people
                                sharing housing because they allow adults living with parents and sib-
                                lings living together to form separate households. This alternative
                                retains the McKinney Act changes designed to help the homeless by
                                allowing parents of minor children to form separate households from
                                their parents or siblings with whom they live.


Impact on Program               Because AFDC households constitute 38 percent of the food stamp house-
Simplicity                      holds in the United States, this alternative could greatly simplify the
                                caseworker’s tasks in determining food stamp eligibility and benefit
                                levels for households receiving AFDC, according to program officials in
                                one state. The caseworker could eliminate the food stamp eligibility


                                Page 53                           GAO/RCED9@137   Food Stamp Household   Definition   Alternatives
                               Appendix I
                               Alternative   Household   IMlnltio~
                               With Analysis




                               determination process and grant stamps on the basis of the information
                               and calculation used to determine AFDC eligibility.

                               Differing state AFDC regulations might make this definition more com-
                               plex than it appears. For example, some states include unemployed par-
                               ents in the AFDC grant, and each state provides a different level of AFDC
                               grant. State program officials said that using the AFDC income figure as a
                               basis for food stamp allotments would remove most of these
                               inconsistencies.


                               A food stamp household is composed of an individual who meets eligi-
Individualized                 bility standards.
Benefits Alternative
                               For those individuals living with others whom they are legally respon-
                               sible to financially support (such as parents with minor children), the
                               income, assets, and expenses of the legal unit shall be divided among its
                               individual members in determining eligibility.


How the Alternative            This alternative changes the current rules in two ways:
Changesthe Current Rules   l   By eliminating the purchase and prepare concept and awarding benefits
                               to individuals rather than groups, it, in effect, drops the entire house-
                               hold concept.
                           l   It separates the food stamp program from the Thrifty Food Plan by sup-
                               plying individuals with food stamps. The Thrifty Food Plan assumes
                               that individuals form group households, prepare meals together, and
                               take advantage of economies of scale in purchasing food.


Impact on Participation        More individuals would be eligible for food stamps under this alterna-
and Direct Benefit Costs       tive because it eliminates any remaining provisions that require certain
                               persons to apply together for food stamps.

                                Service and state program officials agreed that food stamp benefits
                                would increase significantly under this alternative because benefits pro-
                                vided to an individual constituting a household are higher than the ben-
                                efits provided to an individual who is a member of a group household.
                                Current benefit levels are based on the Thrifty Food Plan, which esti-
                               .mates necessary monthly food expenditure for households of various
                                sizes: on a per-person basis, a single-individual household receives a



                               Page 54                               GAO/RCED90-137   Food Stamp Household   Definition   Alternatives
                         Appendix I
                         Alternative   Household   Def¶nitions
                         Wlth Analysis




                         larger food stamp benefit than a group food stamp household. If pro-
                         gram costs are to be kept down, benefits provided to individuals may
                         have to be decreased, officials said.


Impact on Homelessness   This definition removes all disincentives to allowing low-income people
                         to share housing because it allows adults living with parents and sib-
                         lings living together to form separate households. Welfare rights advo-
                         cates and caseworkers said that provisions of the current definition that
                         require parents and adult siblings to apply for food stamps together
                         could provide an incentive for relatives to live apart rather than
                         together. This alternative removes these provisions.


Impact on Program        State program and Service officials said that prorating household
                         expenses across a larger number of food assistance units within one
Simplicity               home would increase administrative complexity if benefit calculations
                         remained the same as the current process. Caseworkers would still have
                         to identify persons legally responsible for each other to enable them to
                         prorate income and expenses appropriately. Although this alternative
                         makes eligibility and benefits calculations much more complex, Service
                         officials said this alternative could simplify the caseworker’s task of
                         determining relationships within the home. In a sense, caseworkers
                         would not have to determine any sort of “household” because benefits
                         would be granted to individuals.




                          Page 66                          GAO/RCEDgOl37   Food Stamp House.hold Def¶nltion   Alternatives
Appendix II

Organizations Contacted During This Review


               Advocacy for Battered Women, Madison, Wis.

               American Public Welfare Association, Washington, D.C.

               Bar Association of San Francisco, Calif.

               Bureau of Indian Affairs, Minneapolis, Minn.

               California Rural Legal Assistance Foundation, Sacramento

               Center for Demography and Ecology, University of Wisconsin, Madison

               Chicano Federation, San Diego, Calif.

               Coalition of California Welfare Rights Organizations, Sacramento

               Congressional Budget Office, Washington, D.C.

               Department of Economic Assistance, Hennepin County, Minneapolis,
               Minn.

               Department of Health and Human Services, Dane County, Madison, Wis.

               Department of Human Services, St. Paul, Minn.

               Department of Social Services, Alameda and San Diego Counties and
               Sacramento, Calif.

               Food and Nutrition Service, U.S. Department of Agriculture, San
               Francisco and Sacramento, Calif. and Alexandria, Va.

               Food Research Action Committee, Washington, D.C.

               General Assistance Application Office, San Francisco County, Calif.

               Hamilton Family Center, San Francisco, Calif.

               Indian Health Center, Minneapolis, Minn.

               Indo-Chinese Mutual Assistance Association, San Diego, Calif.

               Institute for Research on Poverty, University of Wisconsin, Madison



               Page 56                GAO/RCED9@137    Food Stamp Household   Definition   Alternatives
Appendix II
Ckganhatio~   Contacted   During This Review




National Coalition for the Homeless, Washington, DC.

Salvation Army Human Services, Madison, Wis.

San Diego Legal Aid, Calif.

State of California Refugee and Immigrants Program Branch, Sacra-
mento

Tellurian UCan Inc., Madison, Wis.

Transitional Housing Inc., Grace Episcopal Church, Madison, Wis.

Vermont Department of Social Welfare, Waterbury

Wisconsin Department of Health and Social Services, Madison

Wisconsin Office of Management and Budget, Madison

Wisconsin Resettlement Assistance Group, Madison

Young Women’s Christian Association, Madison, Wis.




                              .
Page 57                       GAO/RCED!W137    Food Stamp Household   Definition   Alternatives
Comments From the U.S. Department of
Agriculture’s Food and Nutrition Service


                 United States                     Food and                     3101 Park Center Drive
                 Department of                     Nutrition                    Alexandria, VA 22302
                 Agriculture                       Service




             John W. Harman, Director
             Food and Agriculture    Issues
             U.S. General Accounting     Office
             Washington,  D.C.    20548
             Dear Mr. Harman:
             This letter       provides   comments on. your
                                                        . *     draft  report entitled,  Epoa
             StamD proaram. . AlternativeDeflnltlons               of Household for Food
             -rnD   Eliaibilitv,        RCED-90-137.
             We have reviewed       this report       in conjunction     with the. . draft    report
             entitled:       Food St-       Proaram. . Them                  DefW           16 Not p
             flaior    Source of Caseworker        Errors*     On the whole, we have no
             major problems with this report.               We believe     it is important       to
             point out, however, that the definition                 of the household       is a key
             component of the Food Stamp Program.                 Congress has shaped this
             definition      to assist    America's      poor, and simultaneously         avoid
              abuse of this assistance.            The companion report        on this subject
              found the definition         is not as problematic        as had been suspected
             when Congress asked for information               on this subject.        Therefore,
             we would caution       that any change to the definition               be made only
              after    very careful     consideration      of the potential       for  introducing
              error     into an area which appears to be generally              understood.
             My staff   has informally provided  technical comments   to               yours.       We
             appreciate   your work in this area, and the opportunity                   to review
             your draft   report.
                                               Sincerely,




                    Page 58                    GAO/RCELbO&137   ‘FoodStamp   Household Deflxdtion Altenutives
Appendix IV

Major Contributors to This Report


       k
Resoufces,community     Ned L. Smith, Assignment Manager
and Economic            Jerome T. Moriarty, Deputy Assignment Manager
                        Catherine T. Lojewski, Staff Evaluator    -
Development Division,   Michael E. Schiefelbein, Writer-Editor
Washington, D.C.

                        Frank M. Taliaferro, Evaluator-in-charge
Chicago Regional        Katherine Siggerud, Site-Senior
Office                  Patricia M. Barry, Staff Evaluator
                        Arthur U. Ellis, Staff Evaluator




 (023284)                Page 59               GAO/~W137      Food Stamp Household   Definition   Alternatives