How Millionaires Collect Food Stamps

By Kristina Rasmussen. Ms. Rasmussen is vice president for federal affairs for the Foundation for Government Accountability. Excerpts:

"Consider the food stamp program’s longstanding policy of “broad-based categorical eligibility.” You probably assume that food stamps go to poor people only. But this policy, which the U.S. Department of Agriculture instituted during the Clinton administration, allows state food-stamp programs to grant benefits to anyone who has moderately low wage income, regardless of net worth. A family with a seven-figure bank account can be eligible for food stamps.

That’s how lottery winners—including actual millionaires—wind up getting food stamps. In 2012 Amanda Clayton of Detroit was revealed to be receiving $200 in monthly food aid despite having won $1 million the year before. “I feel that it’s OK because I have no income,” she said, “and I have bills to pay. I have two houses.”

In 2011 Leroy Fick of Bay County, Mich., was found to be receiving food assistance despite having taken home $850,000 in lottery winnings the previous year. To his credit, he had contacted the state food-stamp bureaucracy to ask if he needed to come off public assistance after getting his newfound wealth. He was told he could stay on it.

When these stories went public, the Michigan Legislature and Gov. Rick Snyder instituted a new qualification requirement. Anyone with $5,000 in assets, with some exceptions for cars, became ineligible for food stamps. But more than 30 states continue to have no asset limits. All you need to collect food aid is two things: an income below a multiple of the poverty line, ranging from 130% to 200%; and eligibility for some sort of benefit funded by Temporary Assistance for Needy Families (TANF), the main welfare program for single parents.

And there’s the “one weird trick.” The state spends TANF dollars to print a welfare brochure. The brochure itself is defined as a “benefit,” which everybody is “eligible” to receive, thereby meeting the USDA requirement.

Of the 47 million Americans who received food stamps in 2014, some four million got them under “broad-based categorical eligibility”—most because their wealth would have made them ineligible otherwise. This is an abuse of a taxpayer-funded system that ought to help the truly needy, not lottery winners and others with real assets. Yet these policies persist because states are addicted to the federal funds they bring."