A change in the 2025 spending law separates food-stamp households into two groups when outside help pays an energy bill. For a household that includes an older or disabled member, certain third-party state energy assistance is no longer treated as income and the covered expense can still support the excess shelter deduction. For households without that member, the same assistance remains income and the related expense no longer counts. The distinction is easy to miss because both rules sit inside the same section of the law, but they can produce opposite results in a SNAP budget.
Section 10103 Creates Two Different Energy Rules
The change comes from Section 10103 of Public Law 119-21, which rewrote how SNAP treats some third-party energy assistance. USDA’s Food and Nutrition Service says the new rule distinguishes households containing an elderly or disabled member from all other households. In the first group, state energy assistance paid by a third party is excluded from income, while the household may continue to include the covered utility expense in its excess shelter calculation.
That pairing matters because SNAP does not simply ask whether a household has an energy bill. The program first calculates income, then applies deductions that can reduce the income used to set the benefit. For the elderly-or-disabled group, the memo preserves both sides of the calculation: the assistance is not added to income, and the qualifying expense remains part of the shelter side of the budget.
The rule moves in the other direction for households without an elderly or disabled member. USDA’s implementation memo for the SNAP provisions says that assistance still counts as income for that group, while the expense paid with it can no longer be counted toward the excess shelter deduction. It is not a general exclusion for every household receiving help with heating or electricity.
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Why the Shelter Deduction Is the Other Half of the Change
Excess shelter costs are part of SNAP’s deduction structure. Rent or mortgage costs, property taxes, insurance and qualifying utility costs can all be relevant after the program applies its other calculations. The law’s treatment of an energy payment therefore affects more than a label on a case file: it determines whether the same support is entered as income, recognized as a household cost, both, or neither.
Congress also limited automatic qualification for a heating-and-cooling standard utility allowance. Under the memo, only a household with an elderly or disabled member that receives more than $20 through a Low-Income Home Energy Assistance Act program qualifies automatically. That is a narrower rule than the common assumption that any token energy payment produces the same utility treatment for every SNAP household.
The statute separately removes internet costs from allowable shelter costs and from standard utility allowances. That provision applies alongside, rather than instead of, the elderly-or-disabled energy rule. Reading the two together explains why a household can see one category of expense removed while a third-party energy payment receives different treatment depending on who is included in the SNAP unit.
When States Apply the New Treatment
USDA directs states to apply the revised rules at initial certification and, at a minimum, at recertification. That timing is important because a household’s energy-assistance treatment may not change on the day a utility program sends payment; it changes when the state applies the relevant SNAP budget rules to a new or renewed certification period.
The memo does not say that an older household is automatically entitled to a particular deduction merely because it has an energy bill. It describes a rule for specified third-party state assistance and the associated expense treatment. The exact utility allowance and documentation practice can still depend on the state agency’s administration of the federal SNAP framework.
The lasting point is the split Congress wrote into the law. A household with an elderly or disabled member receives the income exclusion and keeps the covered expense in the shelter calculation; one without that member does not receive either treatment. The same energy-assistance payment can therefore be recorded very differently even when the bill being paid looks identical.
The Paperwork Behind a Utility Allowance
Energy assistance, a renewal notice and a shelter deduction often arrive in separate parts of a SNAP case, even though the agency applies them in one budget. A household with an older or disabled member may need the program record and the utility expense considered together when the certification period is reviewed.
The SNAP & Medicaid Renewal Organizer is a 13-page organizer with 51 state packs and a renewal document checklist for keeping program paperwork in one place.
Open the renewal and reporting calendar in The SNAP & Medicaid Renewal Organizer.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
