There is a $2000 limit on the
resources that a household may have and
still receive SNAP. The limit is $3250
for a household with an elderly (age 60
or older) or a disabled member. Cash and
savings are counted as resources, but
funds in most retirement accounts are
excluded from consideration as
resources.
Recently we have received a number of
questions about the excludability of
various retirement plans. We believe
that such questions have arisen because
the 2008 Farm Bill excluded most
retirement accounts from resources when
determining eligibility for SNAP (as of
Oct. 1, 2008). In addition, many
formerly employed individuals are
applying for SNAP assistance because of
the economic downturn.
The following
types of retirement accounts are
excluded from consideration as resources:
|
IRS Code |
Plan |
What is It |
| Section
401 |
Traditional Defined-
Benefit Plan |
Employer-based retirement plan that promises retirees a certain benefit upon retirement, regardless of investment performance.
|
| Section
401(a) |
Cash Balance Plan |
Employer-based “hybrid” plan that combines features of defined benefit and defined contribution plans.
Each employee is allocated a hypothetical account, but account balances accrue at a specified rate, rather than depending on investment
performance.
|
| Section
401(a) |
Employee Stock
Ownership Plan |
Similar to a profit-sharing plan that must be primarily invested in the employer’s stock and under which
distributed benefits must be offered in the form of the employer’s stock.
|
| Section
401(a) |
Keogh Plan |
“Informal” term for retirement plans available to self-employed people.
|
| Section
401(a) |
Money Purchase
Pension Plan |
Employer-based defined contribution plan under which annual contributions are fixed by a set formula.
|
| Section
401(a) |
Profit-Sharing Plan |
Employer-based defined contribution plan under which employer contributions may, but need not be, linked to
profits. Usually refers to non-matching employer contributions.
|
| Section
401(a) |
Simple 401(k) |
401(k)-type plans available only to small businesses: exempt from certain restrictions and subject to some
limitations on employer contributions.
|
| Section
401(a) |
401(k) |
Defined contribution plan that allows employees to defer receiving compensation in order to have the amount
contributed to the plan. Commonly referred to as a “cash or deferred arrangement” (CODA). Some 401(k) plans allow after-tax Roth 401(k)
contributions.
|
| Section
403(a) |
403(a) |
Plans that are similar to 401(a) plans but Are funded through annuity insurance.
|
| Section
403(b) |
403(b) |
Tax-sheltered annuity or custodial account plan offered by tax-exempt section 501(c) organizations or
public schools. Many are funded by employee contributions that resemble 401(k)s.
|
| Section
408 |
IRA |
Vehicle for tax-deferred retirement savings controlled by individuals rather than employers.
|
| Section
408(p) |
Simple retirement
account IRA |
Employer-based IRA (to which employers and employees contribute) available only to small businesses.
|
| Section
408(k) |
Simplified Employee
Pension Plan (SEP) |
Employer-sponsored plan available only to small businesses; allows employer to contribute to employee accounts
that function as IRAs and are subject mostly to IRA rules. Generally ceased to apply in 1996.
|
| Section
408A |
Roth IRA |
Same as IRA, except that qualified distributions are tax exempt.
|
| Section
457(b) |
Eligible 457(b) Plan |
Funded plan offered by state and local governments or unfunded plan offered by nonprofit organizations.
|
| Section
501(c) |
501(c)18 Plan |
Plan offered mostly by unions. Had to be set by June 1959 and are now largely obsolete.
|
Section 8439
of Title 5 USC |
Federal Thrift
Savings Plan |
Plan offered by the federal government to its employees.
|
