Cash Portion of Nutritional Assistance Program to Be Phased Out
SAN JUAN – Just as Caribbean Business first reported in June, the cash portion of the Nutritional Assistance Program (PAN by its Spanish acronym) will be phased out, negatively affecting participants’ ability to meet basic personal needs.
Puerto Rico receives some $2 billion a year for PAN, which benefits 1.3 million on the island.
PAN provides a monthly benefit for food to low-income households that includes both cash and noncash portions. About three-fourths, or 75 percent, of the benefit must be redeemed for eligible food items through electronic benefit transfers at certified retailers. The remaining 25 percent may be redeemed in cash. The entire benefit is to be used only for the purchase of eligible food items.
The cash portion is slated to be eliminated in phases, or 5% yearly.
The 2014 Farm Bill reauthorized PAN, but included a provision to phase out its cash portion, coupled with an equivalent increase in the noncash portion beginning in 2017. The law also called for a federal study to examine the uses of the cash portion and assess the potential adverse effects for both participants and food retailers of replacing the 25 percent cash portion with noncash benefits.
The study, which was completed in 2015, found that eliminating the cash benefit would affect participants as well as retailers. PAN beneficiaries, for instance, have limited access to other sources of income or cash assistance from federal programs.
The executive vice president of the Chamber of Food Marketing, Industry & Distribution (MIDA by its Spanish acronym), Manuel Reyes, in June said the study spent more time trying to justify that in Puerto Rico, where there are no other cash assistance programs.
“In our opinion, that claim is valid, but it would not be legal to keep the cash portion because the purpose of the benefits is to be used to purchase food items,” he said about MIDA, which supports the phaseout of the cash portion of the PAN benefit.
The study, however, shows that most PAN beneficiaries purchase both food and nonfood items with their cash benefits. Based on survey data, 52.4 percent of PAN participants reported purchasing at least some nonfood items with withdrawn cash, and 44.2 percent reported purchasing at least some food items with withdrawn cash.
The most common nonfood items purchased with PAN cash were cleaning supplies and personal hygiene products, including soap and toilet paper.
“Discontinuing the cash portion of PAN benefits would likely have little impact on participants’ access to food. However, given PAN participants’ reliance on cash benefits to purchase basic hygiene and cleaning products, combined with the lack of other sources of income, discontinuing the cash portion would likely have a significant adverse effect on participants’ ability to meet their basic personal needs,” the study concluded.