What are SNAP benefits? SNAP stands for Supplemental Nutrition Assistance Program and is considered a needs-based government benefit. SNAP is more commonly referred to as food stamps. Preserving the client’s eligibility to receive SNAP benefits is not always possible after a client receives a settlement.
SNAP Benefits for a Client Who Will Receive a Settlement
The federal government promulgates asset and income guidelines for SNAP eligibility. The states have the ability to raise or eliminate the asset test for SNAP benefits.
Thirty-four states and the District of Columbia have decided to waive those asset limits and allow people to continue to enjoy SNAP benefits regardless of the amount of liquid assets. In those locations, SNAP is based solely on the applicant’s income.
The remaining states either follow the federal asset limits or have a modified asset limit In these states, a client’s settlement may increase their assets so that the client can no longer receive food stamps. If a client is receiving SNAP benefits, the client is also likely receiving Supplemental Security Income (SSI), Medicaid, or other needs-based government benefits.
The most common situation is that, for individuals with low income, they often receive both Medicaid and SNAP benefits. In the case where the client has a disability and has a low income, then they may have a mix of all these different benefits.
While special needs trust can help preserve Medicaid and SSI for disabled individuals, in most states a special needs trust will not preserve eligibility for SNAP benefits.
Most clients are much more emotionally tied to their Medicaid and SSI benefits than they are to their SNAP benefits (because the value of those benefits is much higher than the value of SNAP). Thus, in the states with SNAP asset limits, the clients may be able to preserve their Medicaid and SSI benefits by using a special needs trust, but they will likely lose their eligibility for SNAP benefits.
It is important to keep in mind that clients who are receiving SNAP benefits or food stamps are probably also receiving government needs-based benefits like SSI or Medicaid. While protecting SNAP benefits depends mainly on the rules of the state where the client resides careful planning can be done to help ensure ongoing eligibility for clients other, more vital benefits like SSI and Medicaid.