Benefit Programs

The household income threshold for FNS benefits is 130% of the federal poverty guidelines for most households and 200% for those categorically eligible. Since most recipients are not categorically eligible, we use the 200% threshold.

FNS beneficiaries receive benefits proportional to their monthly net income. To calculate net income, we start with gross income and take the following deductions, which are outlined in the benefits level manual. All citations below are to the benefits level manual.

• Excess shelter deduction is shelter and utility expenses exceeding 50% of monthly income after other deductions have been subtracted, with a maximum of $597, 360.01(F);
  • Utility expenses are based on the table in 360.01(A);
  • Rent for all families is estimated at $600, which represents the 25th percentile rental value in Forsyth County;
• Standard deduction based on the table in 360.01(B);
• Earned income deduction of 20%, 285.04(E)(12);
• Dependent care deduction of $200 per child per month, 360.01(E).

We can determine the benefit amount once net income is calculated. In general, households are expected to spend 30% of their own net income on food, 360.04(E)(27), with FNS covering the rest. So, we take the maximum monthly income allotment as specified in 360.02(B) and subtract 30% of net income from this amount to arrive at the value of the benefit.

One and two-person households must receive benefits of at least $20 to receive anything, 285.04(E)(28).

More information on calculating FNS benefits, called SNAP federally, can be found in this review by the Center on Budget and Priorities.

Initial eligibility:

• 0 to 5-year-olds: household income less than 200% of the federal poverty guidelines
• 6 to 12-year-olds: household income less than 133% of the federal poverty guidelines

Continued eligibility:

• All ages: household income less than 85% of the state median income

Since our focus is on when families lose benefits, we use the continued eligibility threshold when simulating the Benefits Cliff. An overview of the eligibility requirements for subsidies is on the state’s website. The administrative regulations are also available, which were used when conducting our analysis.

The market value of NC Child Care subsidies is based on the 2022 subsidized NC market rate for 4-star child care centers in Forsyth County.

Subsidy recipients must pay 10% of their gross income as a copay. Therefore, to calculate the market value of the benefit, we subtract 10% of household income from the 2022 NC market rate of the subsidy.

We did not incorporate other child care programs such as NC PreK because children in programs such as these are only in the program for a year.  As a result, families cannot phase out due to passing an income threshold.  Instead, they phase out of the program when their year expires.

The initial eligibility threshold is 50% of an area’s median income, but households continue receiving benefits once they qualify. There is no cliff.  Since families must pay 30% of their income in rent, they ease themselves off the program when their share of rent equals their actual rent payments.

The market value of the benefit is the market value of the rental unit minus the voucher recipient’s share of the rent. Fair market rental rates for reimbursement are capped by HUD. Since we know no rental rates are above these amounts, we assume that rental rates are 80% of the fair market rental.

Calculating the recipient’s share of rent first requires calculating the recipient’s total tenant payment. Information on the total tenant payment and the recipient’s share comes from the HUD manual.

Total tenant payment is the greater of (HUD manual, pg. 5-67):

• 30% of monthly adjusted income,
• 10% of monthly gross income, or
• $25.

We make the following deductions and assumptions in calculating monthly adjusted income:

• Dependent deduction: $480 year ($40 / month) for each child under 18 (HUD manual, pg. 5-41);
• Child Care Deduction: $4000 per year / per child ($333.33 per month), but 10 year old in three person home will not have any child care costs;
  • The value comes from the example on page 5-43.

We subtract the utility allowance from the total tenant payment (HUD manual, pg. 5-67) to calculate tenant rent. The average Forsyth County utility allowance in 2021 was $174, so all families were assumed to receive this allowance.

Now we can calculate the fair market value of the benefit, which is the rental rate minus the tenant rent.

Income eligibility thresholds for all programs were retrieved from the 2022 Basic Medicaid Eligibility chart.

The market value of all insurance programs was assumed to equal the equivalent price of a 2023 silver plan in Forsyth County on the ACA marketplace. We pulled plan prices from the Kaiser Family Foundation’s health insurance marketplace calculator.

In calculating the value of the silver plan, all adults were assumed to be 30 years old and non-tobacco users. Children’s ages depend on family size and break down as follows:

• 1 child: 2 years old,
• 2 children: 2 and four years old,
• 3 children: 2, 4, and 10 years old.

Mothers and children up to 5 can receive WIC benefits if their household income is less than 185% of the federal poverty guidelines. The ages of children are assumed as follows:

• 1 child: 2 years old,
• 2 children: 2 and four years old,
• 3 children: 2, 4, and 10 years old.

Therefore, one child gets benefits in one child households and two children receive benefits in two and three child households.

Average monthly food benefits per person in 2023 for North Carolina were $38.91. To verify, go to the USDA’s WIC data site, scroll down to “Monthly Data – State Level Participation by Category and Program Costs: FY 2023 (preliminary),” and then open the dataset labeled “Average Monthly Food Cost Per Person.” We assume all eligible family members receive WIC benefits in this amount.

Only families with children 17 or younger are eligible for Work First Financial Assistance, State Plan pg. 12. We assume all children are 17 or younger.

The benefit’s market value is the payment amount. This amount is 50% of the difference between total countable income and the need standard listed on pg. 18 of the State Plan. But, payments must be at least $25.