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Neighborhood Legal Services, Inc. |
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Neighborhood Legal Services, Inc. |
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Gifts or Loans to Public Assistance
or Food Stamp Recipients
© 1999 by Neighborhood Legal Services, Inc.
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I would like to give a gift or a loan to someone who is receiving Public Assistance and/ or Food Stamps. Will my gift or loan affect their benefits?
It depends on several factors such as the form of the gift, the type of benefits program, and/or the person giving the gift or loan. Each program has very different rules. Check each category below to see how your contribution may affect benefits.
What about cash? If I give someone money will this affect their benefits?
For Public Assistance:
As a general rule, cash will be counted as income and therefore will affect benefits. If money is given by a non-legally responsible person for a particular reason and purpose that was not designed to be covered by the public assistance grant, a person may be able to establish that it was not income. However, it is always best to make a payment directly to a creditor on a recipient's behalf instead of giving cash. See public assistance and in-kind payments below.
For Food Stamps:
Cash donations based on need received from private non-profit charitable organizations do not count as income as long as the payments do not exceed a total of $300.00 in a federal fiscal year quarter. A federal fiscal year begins in October. Cash donations for all other persons or organizations are counted as income.
What about loans? Can I loan someone money instead of giving it to them?
For Public Assistance:
It depends if someone is receiving Family Assistance (FA) or if s/he is receiving Safety Net Assistance (SNA). In most cases, families with dependent children are family assistance recipients and childless couples and single people are safety net assistance recipients. The rules are very different for each program. For all loans, DSS requires a written agreement with a promise to repay within a specified time or with specific collateral or anticipated income.
For Family Assistance:
If someone is receiving Family Assistance (or federally funded non-cash SNA) and gets a loan from a non-legally responsible person, the loan will not count as income and will not count against the resource limit. Loans from legally responsible persons will be counted as income.
For Safety Net Assistance:
In almost all instances, if someone receives assistance in the SNA category (except recipients who receive federally funded non-cash SNA), any loan will be counted as income.
For both FA and SNA, student loans do not fall into this category and are disregarded as income and resources.
*In certain instances, microenterprise loans may not count as income for SNA recipients. Call this office if you have questions concerning these loans.
For Food Stamps:
Other than certain educational loans, loans are not counted as income, including loans from private individuals and commercial institutions.
What about in-kind contributions instead of cash? Will vendor payments or in-kind contributions affect benefit levels?
For Public Assistance:
A payment made by a non-legally responsible person directly to a vendor, on a recipient's behalf, for a specific purpose that is not provided for under the public assistance grant should not count as income. If a direct payment is made to cover an expense that the public assistance grant covers (e.g., utilities, clothing and rent up to the shelter allowance maximum), this will count as income in the month received. If a direct payment is made to cover an expense that is not already covered by the public assistance grant (e.g., vehicles, rent above the shelter allowance maximum) this will not be counted as income.
Erie County uses a two prong test:
Contributions will not count as income if:
(1) The contribution is made on someone's behalf by a non-legally responsible relative and it is not for a basic need that the public assistance grant was designed to cover, and
(2) The contribution is paid directly to the vendor.
Example #1
Excess rent above the shelter allowance: A recipient who gets a shelter allowance of $155.00 per month in her grant actually pays $205.00 each month. Since DSS does not provide for the extra $50.00 under the grant, a non-legally responsible person may pay $50.00 directly to the landlord on her behalf and this will not count as income and therefore will not affect her benefits.
Example #2
Vehicles: If someone gives a public assistance recipient a vehicle (that is below the resource limit of $4650.00), the vehicle would not count as income because it is not provided for in the basic public assistance grant. On the other hand, payments made to a utility company would count as income since utility payments are provided for under the public assistance grant.
If possible, it is always best to provide written verification that the money was earmarked for a specific purpose and that the money was not available to the recipient as cash.
For Food Stamps:
Any non-monetary gain or benefit received by the household, or vendor payment made on its behalf, regardless of the source, even if received in place of cash will not count as income.
*If however, HUD or other housing authorities pay rent or mortgage payments directly to the landlord, although excluded from income, they will not be allowed as a Food Stamp shelter cost.
*Excess shelter costs made by PA are not excludable.
