A change in how the food-stamp program counts utility costs is quietly shrinking monthly benefits for an estimated 600,000 households, an average loss of about $100 a month. The rule tightens a long-standing shortcut that let families claim the full standard utility allowance after receiving even a token heating-assistance payment. Under the new law, most households must now document their actual heating and cooling bills, and many are finding the resulting deduction smaller than the flat estimate they had leaned on for years.
How the utility-allowance calculation changed
The Supplemental Nutrition Assistance Program sets benefits partly on a household’s shelter costs, and utilities are counted through a figure called the standard utility allowance, or SUA. A larger utility deduction lowers a household’s countable income and raises its monthly benefit. For years, many states let a household that received even a small heating-assistance payment automatically claim the full SUA, a practice widely known as “Heat and Eat.”
The Heat and Eat approach existed for a practical reason. Verifying every household’s exact utility bills is administratively heavy, so states used a standard allowance to simplify the math, and a nominal heating-assistance benefit — sometimes just a few dollars a year — was enough to unlock the full figure. Critics called it a loophole; defenders saw it as a reasonable proxy that spared low-income families from tracking every gas and electric bill.
That automatic path has been narrowed. Under the One Big Beautiful Bill Act signed in July 2025, only households that include a member age 60 or older or a person with a disability can still use a heating-assistance payment to trigger the full allowance. The Food and Nutrition Service’s utility-allowance guidance lays out the revised standard, which took effect for benefit calculations beginning November 1, 2025.
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Why about 600,000 households will see smaller benefits
For households outside the protected group, the shortcut is gone, and they must now show what they actually spend on heating and cooling. The Congressional Budget Office estimated that roughly 600,000 households would lose about $100 a month because their documented utility costs come in below the flat allowance they previously claimed.
The dollar path is easier to see in a single case. A household that once claimed a standard allowance of several hundred dollars a month might document actual heating and cooling costs well below that figure, shrinking its shelter deduction by the difference. Because SNAP benefits fall by roughly 30 cents for every dollar of additional countable income, a lost deduction of a few hundred dollars translates into a benefit cut in the neighborhood of $100 — the average the budget office projected.
The mechanics run through the excess-shelter deduction. When the utility figure drops, the shelter deduction shrinks, countable income rises, and the calculated benefit falls. Federal implementation instructions direct states to move affected households onto actual-cost documentation, a step that also adds paperwork at each recertification.
A related provision compounds the squeeze. The same law bars states from counting internet service as a shelter expense, removing another cost that had helped some households qualify for a larger deduction. Together the two changes trim the deductions that translate directly into benefit dollars, without removing anyone from the program’s rolls.
The change does not hit every affected household on the same day. Because the recalculation generally happens at a household’s next recertification, the smaller benefit phases in across many months as cases come up for review, rather than landing all at once. That staggering is one reason the reduction has drawn less attention than the program’s more visible work rules, even as the cumulative number of affected households climbs toward the estimate.
Which households the change protects
The carve-out is the part most relevant to older Americans. A household that includes someone 60 or older, or a member with a disability, keeps the ability to claim the full standard utility allowance through a heating-assistance payment, and is shielded from this specific reduction. For those families, the monthly benefit calculation is unchanged by the utility rule.
The burden therefore lands on younger, non-disabled households, who make up the bulk of the estimated 600,000. Many will not see a termination notice; instead the benefit simply arrives smaller, tied to a utility figure recalculated from their own bills rather than a generous flat estimate. The change is easy to miss precisely because nothing about eligibility appears to shift.
State choices shape how sharply the change bites. States set their own standard utility allowances and decide how aggressively to verify actual costs, so a household in one state may lose more than a similar household in another simply because of how the local allowance compares with real utility bills. The federal law sets the framework, but the size of any given household’s cut still depends on where it lives.
That quiet quality is what sets this rule apart from the program’s work requirement, which cuts people off entirely after three unmet months. Here no one is dropped; the grocery budget just thins by roughly $100 a month for hundreds of thousands of households. The open question is how many of them will connect a lighter benefit to a utility-accounting change they never saw coming.
This article was produced with AI assistance and reviewed against primary sources by The Money Overview editorial team.
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