Inflation, Public Supports, and Families with Low Incomes

The way many federal safety net programs account for inflation when determining annual payment adjustments is not keeping up with public need as prices continue to rise. 

The Issue

A review of several major federal support programs shows adjustments are almost always retrospective, based on inflation rates that are often several months old by the time they take effect.  

Key Findings 

• Within the Supplemental Nutrition Assistance Program (SNAP), researchers find that the value of the maximum monthly benefit in 2022, which was calculated using data from June 2021, eroded by more than $130 by September as a result of continued rising prices.

• For individuals who receive Supplemental Security Income (SSI), the lag in adjustment resulted in the real value of the benefit decreasing 7% by November of last year.

• Within Temporary Assistance for Needy Families (TANF)—a block grant program largely run and administered by states—there is no federal requirement that inflation adjustments be made. Researchers note that between 1996 and 2021, only six states have maintained program adjustments to keep up with inflation.

Conclusion

Families with low incomes and those living on a fixed income are especially vulnerable to the effects of inflation. This is only amplified when federal assistance programs don't keep up with current inflation trends. 

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