Millions of American families using SNAP benefits face confusing changes to how their housing costs affect food assistance in fiscal year 2026. The government just set a new $744 monthly shelter deduction cap, but most people don’t know this limit only applies to part of their rent or mortgage.
The shelter deduction doesn’t work like other deductions. Many families think the government simply subtracts their full rent from their income. That’s wrong. SNAP only counts housing costs that go above half of your income after taking out other deductions first.
Here’s what makes families confused: the program uses a four-step math formula that calculates benefits backwards from what people expect. Social workers across the country report this is the number one question they get from applicants.
Your total shelter expenses include several costs combined together:
- Rent payments or mortgage interest you pay each month
- Property taxes and home insurance for homeowners
- HOA fees or condo association payments
- Standard Utility Allowances set by your state instead of actual bills
Most states make you use something called Standard Utility Allowances or SUAs. These are fixed amounts that replace your real electric, gas, water, and phone bills. The heating and cooling allowance reaches $572 monthly in many states, which is often higher than actual utility costs.
Let’s look at a real example that shows how this works. Take a single mother with two children who earns $1,500 each month and pays $800 in rent. First, the government subtracts 20% of her wages ($300) and the standard deduction of $209 for three people. That leaves her with $991 as her starting point.
Her shelter costs add up to $1,372 total when you combine the $800 rent plus the $572 utility allowance. Now here’s the tricky part: the government divides her $991 income in half to get $496. Only shelter costs above that $496 amount count toward the deduction.
When you subtract $496 from her $1,372 total shelter costs, she has $876 in excess housing expenses. But because she has no elderly or disabled family members, her deduction stops at the $744 cap. She loses $132 worth of potential food assistance even though her housing costs are higher.
Families with someone age 60 or older get unlimited shelter deductions. The same rule applies if anyone in the home receives disability benefits. These households can deduct all their excess shelter costs without hitting the $744 cap. This exception helps seniors and people with disabilities who often face high medical and housing costs together.
The shelter deduction cap varies by location across America. Alaska has the highest cap at $1,189 monthly because housing costs more there. Hawaii’s cap reaches $1,003, while Guam stands at $873. The Virgin Islands has the lowest cap at just $586 per month.
States also set different utility allowances based on where you live. Arizona, Hawaii, North Carolina, Tennessee, and Virginia change the amounts based on family size. Alaska and New York adjust them based on which part of the state you live in.
Government policy experts say the 50% rule exists because officials believe every family can reasonably spend half their income on housing. Only when rent or mortgage takes more than half of your money does the program consider you “severely cost burdened” and give extra food help.
Starting July 2024, many states now require proof of your rent or mortgage when you apply or renew benefits. You need to show lease agreements, rent receipts, mortgage statements, or property tax bills. However, for utilities, most states just ask if you pay for heating or cooling to qualify for the standard allowance.
The shelter deduction directly affects how much food assistance you receive each month. A higher deduction means lower net income, which means the government thinks you need more help buying groceries. For families hitting the $744 cap, even small pay raises can reduce both their shelter deduction and final SNAP benefits at the same time.
Understanding these rules helps families plan better and know what to expect when applying for food assistance. Advocates recommend talking with local SNAP offices or legal aid services if you think your shelter deduction calculation seems wrong.
