USDA Publishes Final Rule to Standardize SNAP Utility Allowances and Recognize Internet as a Basic Utility

The U.S. Department of Agriculture's Food and Nutrition Service has announced a final rule to standardize how states calculate Standard Utility Allowances for the Supplemental Nutrition Assistance Program, known as SNAP. The rule ensures greater consistency and accuracy across the country, while allowing states to retain flexibility to reflect variations in local utility costs.

When determining a household's eligibility for SNAP and their benefit amount, states consider a household's total shelter costs, including the cost of utilities such as electricity and water. To simplify the process and reduce the burden on participants to submit detailed utility bills, many states implement Standard Utility Allowances, or SUAs, which are fixed amounts meant to represent a low-income household's utility costs in the state or local area. The SUA, along with the household's other housing costs, is factored into a household's SNAP eligibility and benefit amount.

Current regulations do not require states to use a particular methodology or data source(s) to set their SUAs. This could result in SUAs based on outdated information as well as inconsistency from state to state. This rule establishes clearer guidelines for states to use in setting their SUAs, including requirements for both how SUAs are calculated and what data is used in the calculations. This will ensure more accurate and consistent SUAs, and thereby more accurate and consistent determinations of SNAP eligibility and benefit amounts, for households with low incomes across the country.

Other key elements of the final rule include:

• Internet as a Basic Utility: Recognizing the importance of internet access to modern life, the rule now adds basic internet costs as an allowable utility expense, just like electricity, water and other utilities. Including basic internet allowance in SUAs better reflects the necessity of this household cost for things like work, school, paying bills, and purchasing groceries online.
• State Flexibility in Determining SUAs: While standardizing the requirements for developing SUAs, the rule preserves flexibility for states to tailor their SUAs to their state, including having multiple SUAs within one state to reflect variations in local utility costs.
• Routine Methodology Approval for Consistency: Under the final rule, states must submit their SUA calculation methodologies for FNS approval at least every five years, in addition to the existing requirement that SUA rates be adjusted annually to account for changes in utility costs.

The rule is expected to have a varied impact on SNAP benefit amounts based on each state's specific calculation methodology. FNS estimates the majority of SNAP households will experience no change to their benefit amounts as a result of this rule; about 30% of households are estimated to see a small increase in SNAP benefits and about 5% may see a small decrease. Actual impacts will vary depending on the state's final methodology.

States must finalize and implement their updated SUA methodologies by Oct. 1, 2025. In the coming months, FNS will work closely with state agencies and partners, providing guidance and hosting training sessions to support a smooth transition to the updated requirements and help households understand any resulting changes to their benefits.