Money is the primary answer, but there’s more to it. Obviously, it’s good for the person getting hired.
The government has been in the game of making it financially attractive to hire these folks by offering an incentive (an income tax credit) for hiring certain SNAP (Supplemental Nutrition Assistance Program)/food stamp recipients and other groups with barriers to employment.
With this tax credit, called the Work Opportunity Credit (WOTC), businesses can benefit financially and broaden the groups they traditionally go after to get employees. The Food Stamp group is the largest WOTC targeted group, but WOTC also makes it attractive to hire certain veterans, felons, and the unemployed.
The Work Opportunity Credit was established to provide tax credits to offset the risk or extra costs associated with hiring Food Stamps/Welfare recipients. Although the program offers attractive incentives up to $9,600 for hiring from certain targeted groups, the average credit for hiring someone on Food Stamps comes about to about $1,000 per person.
It’s also good for the companies/consultants who get paid to help employers navigate the administrative challenges of WOTC. It’s good for CPAs who illuminate this program for their clients. It’s also good for the people on the government side who administer it for the government.
In an economy where finding people to work has become much more difficult, the consideration of hiring people on food stamps or welfare makes great sense.
These groups continue to battle against the stigma and practice associated with hiring from, perhaps, less than optimal groups of people. Employers may feel better by hiring someone who is just switching jobs than someone out of work or who has a spotty job history.
If you’re not up to speed on the basics of Food Stamps and public assistance, here are some facts:
- It helps low-income households buy the food they need for a nutritionally adequate diet.
- Among those participating in the program, most are children, elderly persons, or individuals with a disability. In fact, 86 percent of all SNAP benefits go to households that include a child, elderly person, or person with disabilities.
- SNAP is one of the Nation’s primary counter-cyclical government assistance programs. It provides assistance to more low-income households during an economic downturn or recession and to fewer households during an economic expansion, serving as an automatic stabilizer to the economy.
- The average taxpayer pays $30 to house the homeless and $10 on public housing, but $33 to support federal prisons. The average taxpayer contributes just $10 for public housing, $16 for heating assistance for low-income and poor people, and $78 to Temporary Assistance for Needy Families (welfare).