Rule Three: Capping the Standard Utility Allowance

To calculate eligibility for SNAP and the amount of benefits a household receives, the USDA estimates how much money that household has to spend by subtracting its monthly costs (like rent, medical equipment, and child care) from its total income to get a sense of how much money the family has left for food. To simplify these calculations, states have developed some “standard” costs rather than relying on individually reported costs from every SNAP applicant.

One of those standard costs is known as the Standard Utility Allowance, which is an average utility estimate for a household. Across states, the Standard Utility Allowance can range from $278 to $826 depending on household size and other factors. In general, the higher the Standard Utility Allowance, the less money a state estimates a household has left over for groceries after paying for utilities, and the more money they will receive in SNAP benefits.

In October 2019, the USDA announced a regulatory change that would standardize the formula for those calculations across every state and use a USDA-determined cap (at the 80th percentile of estimated costs to low-income households in the state) to decide how much in utility costs families can ultimately deduct from their incomes. This “small” technical change, however, has far-ranging impacts on the people who rely on SNAP. It would cut the program by $4.5 billion over five years and leave 7 million people with even fewer benefits than before.

This proposed rule has yet to be finalized or implemented, but advocates are pushing for emergency coronavirus response legislation to suspend all harmful rulemaking from USDA, including changes to the Standard Utility Allowance.