How did the 2018 and 2020 USDA rule changes affect SNAP eligibility for restaurant meals?
Executive summary
USDA rule changes beginning around 2018 tightened which retailers count as “retail food stores” and clarified that prepared, heated or cooked foods count toward the threshold that would classify a business as a restaurant — which generally makes those firms ineligible to be SNAP retailers (see policy memos and the final “Enhancing Retailer Standards” rule) [1] [2]. Separate 2020 guidance refined definitions of “staple” vs. “accessory” foods and issued memoranda on eligible foods and prepared/heated foods, further shaping which products count toward retailer eligibility decisions [3] [4].
1. What changed: restaurants and prepared foods were put squarely in scope
Starting with the retailer standards rulemaking and ensuing memoranda, USDA clarified that foods cooked or heated on-site must be counted when determining whether a firm exceeds the Restaurant Threshold; firms whose sales are more than 50% prepared, heated or hot foods are treated as restaurants and therefore ineligible as SNAP retail food stores except under limited state Restaurant Meals Program options [1] [2]. The final implementing guidance requires documentation and gives FNS authority to withdraw authorization if a firm appears to exceed that threshold [1].
2. Why the change matters for SNAP eligibility at restaurants
Counting on-site cooked/heated sales toward the Restaurant Threshold narrows the universe of businesses that can become or remain SNAP-authorized retailers. The practical effect is fewer “you buy, we fry” or mixed-model outlets qualifying as grocery retailers — shifting those establishments into the category that SNAP normally excludes unless a state runs an approved Restaurant Meals Program for limited populations [1] [2].
3. The 2020 memos: sharpened definitions of staple vs. accessory foods
USDA moved to codify how staple-food categories and accessory foods (snacks, desserts, items meant to complement meals) are defined for retailers’ depth‑of‑stock obligations; the agency signaled that some items previously counted as distinct staple varieties (for example, certain jerky products) could be reclassified as accessory foods to prevent retailers from meeting protein-variety requirements by stocking only snack-like products [3]. Policy memoranda in 2020 also clarified which prepared/heated foods are excluded from staple‑food counting for Criteria A/B while still being counted toward the Restaurant Threshold [4].
4. Who can still get meals with SNAP and how states fit in
USDA’s Restaurant Meals Program (RMP) remains a state option that lets specified SNAP recipients (typically elderly, disabled, or homeless people who cannot shop or cook) use EBT at approved restaurants; EBT cards are coded by states for participating restaurants, and participating establishments must sign agreements and meet POS requirements [5] [6]. The federal rule changes did not create a nationwide expansion of SNAP purchases at restaurants; rather, they more tightly distinguish restaurants from retail food stores while leaving RMP implementation to states [5] [6].
5. Reported intent and critics’ responses
USDA framed the retailer‑standards updates as restoring intent: ensuring retailers authorized for SNAP carry a full complement of staple foods and preventing restaurants from being authorized as grocery stores [7] [1]. Critics and commenters during the categorical‑eligibility proposal argued the changes went beyond program integrity fixes and could reduce benefits or eligibility; a withdrawn 2018 rule on categorical eligibility reportedly would have led to millions losing eligibility in FY2020 according to agency estimates and triggered extensive public comment [8].
6. Limits of available reporting and areas not covered
Available sources here document rule language, memoranda clarifications, and the existence of RMP state options, but they do not provide granular nationwide data on the number of individual restaurants deauthorized because of the 2018–2020 changes, nor do they detail the precise compliance burden for small mixed‑model retailers (available sources do not mention the count of firms affected or specific deauthorization case numbers) [1] [2]. Sources also do not resolve disputed claims about the timing or magnitude of benefit increases during 2020 beyond noting pandemic-era emergency expansions [9].
7. Bottom line and competing frames
Factually: the post‑2018 rulemaking plus 2020 guidance made it harder for businesses that sell heated/prepared foods to qualify as SNAP retail stores by counting those sales toward a restaurant threshold and tightened the staple/accessory definitions used to evaluate retailer stock [1] [3] [4]. Supporters say the changes protect program integrity and ensure SNAP serves grocery‑type retailers; advocates counter that stricter definitions could reduce access for vulnerable people who rely on prepared meals and that states must navigate RMP approvals to fill any gaps [1] [6] [5].