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Will I lose food stamps if I win the lottery (or other prize)?

Will I lose food stamps if I win the lottery (or other prize)?

“Will I lose food stamps if I win?” This is a very serious question that could have a tremendous impact on your household. It’s no wonder why so many people are asking this question!

Sometimes, when you read the fine print for certain offers (like some of these discounted computers), you might see scary disclaimers that indicate you might lose food stamps if you follow through on the offer.

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That’s a scary prospect! Like Bobbie wrote on our Facebook page, “That’s really a shame that you have to go hungry in order to qualify for a computer to better your education!”

I don’t think it’s fair that anyone should ever have to wonder “will I lose my food stamps?” just because they have an opportunity to improve their situation. You shouldn’t have to choose between food stamps and a computer to further your education. You shouldn’t have to choose between food stamps and a gift card to buy school supplies with. When you’re living with a chronically low income, you shouldn’t have to wonder “will I lose my food stamps?” over small blessings like these.

We’ve spent a lot of time looking into food stamps law and all the amazing discounts you can get with a food stamps card… but somehow, we never looked into whether or not winning a giveaway or a gifted computer could cause you to lose food stamps.

So that’s what we’re going to analyze in this post!

Why do these agencies include these disclaimers?

Food stamps and other federal benefits are dependent on your income. That’s why a change in your income or assets could potentially change your award or eligibility. Like most legalese, many of these disclaimers are there for the organization’s legal protection and to ensure that you’re aware. As we’ll explain below, you’re probably just fine.

Will I lose food stamps if I win a free product, like a computer?

There are two things that the food stamps office considers when determining your eligibility for food stamps: income and resources.

The distinction between a resource and income is important. You may have to report your assets when you apply, undergo a review or exceed the resource limits of the program. However, the total value of your non-exempt resources affects your eligibility and not your monthly award amount.

The USDA states that households may have $2,250 in countable resources. If a household member is over age 60 or disabled, the limit is increased to $3,500. If you receive a gift card or other asset valued at $2,251 or more, or if the card you receive raises your total assets above that level, then you will need to report that.

What is a resource?

The food stamps office counts cash and easily-liquidated assets as resources. For example, they do count cash, bank balances, savings accounts, stocks, bonds, certificates of deposit (CDs) and mutual funds. They may also count real estate other than your primary residence, unless that other real estate generates an income.

They do not, however, count your home, retirement accounts, household belongings or other items that you cannot liquidate into cash. Most states exempt at least one vehicle from your asset limits, also. I have heard that jewelry may be counted as an asset because it is easy to liquidate but I have not been able to confirm this.

Ultimately, you will not lose food stamps for non-cash gifts unless it is a high-value item that places you over the asset limits. In most states, winning a free car wouldn’t matter either since your vehicle and home are usually exempt from your asset totals.

So, the short answer is no. Winning a free computer or other product will not cause you to lose food stamps unless it is a very high-value item that is easily liquidated for cash.

Will I lose food stamps if I win a gift card?

Gift cards are complicated. It depends on what type of gift card you’ve received and under what circumstances.

They are so complicated, in fact, that the USDA had to issue a clarifying memo about them in 2017. You can read the entire memo here, but here’s the short answer:

Basically, the USDA divides gift cards into three categories to determine whether or not they count as income.

Gift cards that can only be used at a certain business (such as Walmart or Amazon) are never counted as income or as a resource.

Because the card is restricted and cannot be spent as freely as cash, they don’t count it as cash. The USDA also states that “establishment-specific gift cards are usually restricted to purchasing a limited range of goods, and are analogous to household goods that have been excluded from resources.” They also state that their value is usually insufficient to affect your ability to purchase food.

Thus, these gift cards will never cause you to lose food stamps!

Credit card company gift cards (like Visa Gift Cards) are handled differently.

Gift cards from credit card companies (like Visa Gift Cards) are divided into two categories, depending on the circumstances under which they were received. If you’re wondering “will I lose my food stamps,” then you really need to pay close attention to this next part.

It all comes down to whether or not you could reasonably anticipate receiving the gift card. If yes, it counts as income. However, if not, it counts as a resource but it does not count as income.

If you receive a credit card company gift card (like a Visa Gift Card) but could not reasonably anticipate receiving it, then it counts as a resource but NOT as income.

If you could not reasonably anticipate receiving the gift card, it does not count as income. Thus, you do not have to count one-time gifts or sweepstakes winnings as income for food stamps purposes. They do, however, count as a resource or asset.

For more information on this, please refer the “will I lose food stamps if I win a product?” section above.

If you receive a credit card company gift card (like a Visa Gift Card) and could reasonably anticipate receiving it, then it counts as income. 

If you receive gift cards regularly, then they will count as income. According to the USDA memo, “credit card company gift cards that are provided regularly and can be reasonably anticipated should be counted as income.”

So, if you’re wondering “will I lose food stamps over this?” the answer is possibly. In this case, the amount will have to be verified and it will impact the amount of your monthly food stamps allotment. You should follow your state’s laws for reporting income changes.

Although the federal food stamps law establishes minimum basic requirements for all states, the states have great flexibility in how they implement the program. That’s part of the reason why you can use your EBT card for fast food in some states but not others.

You should always follow the instructions provided in your official food stamps award letter. They will clearly explain when and how you should report changes to your income.

Will I lose my food stamps if I win the lottery?

In 2011, a Michigan man who won a $2 million jackpot continued to receive and use food stamps. He netted $850,000 after taxes. Nevertheless, lottery winnings did not count if received in one lump-sum payment.

For obvious reasons, this story went viral and there was backlash. Several states enacted laws to ensure that food stamps were given to those who actually need them most. The federal government also got involved and Congress added new restrictions in the federal Agricultural Act of 2014.

According to the Agricultural Act of 2014, “any household in which a member receives substantial lottery or gambling winnings, as determined by the Secretary, shall lose eligibility for benefits immediately upon receipt of the winnings.” The household will “remain ineligible for participation until the household meets the allowable financial resources and income eligibility requirements” under the law. Although the law does not define exactly what constitutes “substantial” winnings, other states have enacted laws that cap the winnings at $5,000.

So, the answer to the question “Will I lose my food stamps if I win the lottery?” really depends on where you live and how much you’ve won. If you win a lot of money, you may lose your benefits for a while but you can always reapply if you meet the requirements in the future.

Got another food stamps question? Ask us in the comments!

Where did we come up with the idea to write an article about “Will I lose food stamps?” One of our readers asked the question, of course!

We are always happy to help and we love to answer your questions. Got a question? Ask in the comments!

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Nicole leads the Low Income Relief team with over 20 years of professional research and writing experience. Nicole started Low Income Relief after a personal experience with poverty. When her husband was medically discharged from the US Army, their family experienced tremendous financial hardship. Nicole was able to gather help from multiple community agencies and move into a nearby low income housing unit in just two weeks! Since then, Nicole has been dedicated to helping low income families in crisis. She regularly spends hundreds of hours combing through countless resources to make sure that Low Income Relief has the most comprehensive and complete resource directories on the internet today. Prior to starting Low Income Relief, Nicole worked as a novelist, journalist, ghostwriter and content creator. Her work has been featured in various print and online publications, including USA Today, eHow, Livestrong, Legal Beagle, The Daily Herald, The Chronicle and more.

Joli

Tuesday 16th of August 2022

I'm actually asking this for a friend of mine that is retired. She is 67 on Social Security. She receives food stamps and Medicare and lives in California. She only gets around 990.00 per month and she just recently won a $1000.00 on a California lottery ticket. She is allowed $1360 per month income to be able to collect her benefits which is $13,320 annual. She is afraid to cash in her lottery ticket because she thinks she will lose her benefits. I don't think a one time lottery winning if $1000.00 will affect her in any way but I don't want to tell her that until I am certain.

Catherine Marucci

Tuesday 16th of August 2022

In general, lottery winnings do not affect SSDI but can affect SSI. However, it may be worth confirming with the agency first. Here are the rules for food stamps and lottery winnings in California: https://calfresh.guide/lottery-and-gambling-winnings/

Cynthia Peterson

Saturday 9th of July 2022

I have a friend that has a $2500 lottery ticket he just started receiving ssi and $71.00 in food stamps Will they take out money from the ticket because of the food stamps?

Catherine Marucci

Saturday 9th of July 2022

Hi Cynthia. His food stamps may be reduced because of the amount of the lottery ticket.

melinda wilson

Monday 21st of February 2022

so I went on the internet and stumbled across some articles that were talking about how you could buy an aerogarden with your food stamps and I thought i would try it out so I was able to purchase 1 off of amazon with my ebt and didnt have an issue now I wanted to get another one but when I went back to try to buy another one there was no listing for an aerogarden that was eligible for purchase with ebt like there was prior to my first purchase and I walmart has listings for aergogardens on their website that claim ebt but you still cant buy them with ebt now im not sure what is going on because you could purchase them before and if you are wondering what an aerogarden is well it is a hydroponic machine ( you use water and a grow light to grow food instead of outside in the soil, althought you can use it as a sprout starter) it is great cause you can use this machine in the wintertime and still get freshly grown veggies and such if you could try to help me by trying to figure this out that would be great i have tried getting in contact with amazon and walmart but i just get the runaround, thank you for all you do.

Isaac

Wednesday 23rd of February 2022

Low Income Relief is an information service. You will need to search our website for information about organizations that can help you meet those needs. Chat with Lira, she might be able to help! https://lowincomerelief.com/chat/

Kristina Spellman

Monday 8th of November 2021

i am interested in the low income computers ,i get food stamps an ssi an medicaid.do i qualify .kristina spellman

Isaac

Thursday 9th of December 2021

The application link should be in the article above. Chat with Lira, she might be able to help! https://lowincomerelief.com/chat/

Tora DeSante

Wednesday 22nd of September 2021

Hello, I was wondering if Someone is on social security and welfare for food stamps, and they were in a car accident where there is a large settlement because of injuries can that be held against them. or what if the person would pay off debt with the money they gained from the settlement.

Isaac

Monday 13th of December 2021

Information on this should be in the article above. Chat with Lira, she might be able to help! https://lowincomerelief.com/chat/