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Amazon expands Prime program to include people in food assistance programs

But the Trump administration’s budget cuts could damper Amazon’s discount Prime program to the oft-forgotten 20 percent.

A package from Amazon Prime moves on a conveyor belt at a UPS facility, Tuesday, May 9, 2017 in New York. CREDIT: AP Photo/Mark Lennihan
A package from Amazon Prime moves on a conveyor belt at a UPS facility, Tuesday, May 9, 2017 in New York. CREDIT: AP Photo/Mark Lennihan

People receiving public assistance benefits will be able to take advantage of Amazon Prime, the company announced Tuesday. The online retailer’s new program, which could expand access to its services to about 20 percent of the population, targets competitors like Walmart.

Households that receive government benefits like food stamps can now get all of Amazon Prime’s perks — access to video, games, and music streaming, fast premium shipping, and free e-books, periodicals, and podcasts — for $5.99 a month. Regular membership costs $99 upfront annually or $10.99 a month, which amounts to about $131 a year.

“We designed this membership option for customers receiving government assistance to make our everyday selection and savings more accessible, including the many conveniences and entertainment benefits of Prime,” Amazon Prime Vice President Greg Greeley said in a news release.

Amazon Prime has developed a track record among high-income households, especially those with teens. But the service has recently grown in popularity, extending its reach to nearly half of all American households, and Amazon has been working to gain traction with lower-income households as well.

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The new program requires individuals to have valid Electronic Benefits Transfer (EBT) cards provided by the Supplemental Nutrition Assistance Program (SNAP), the Women, Infants, and Children Nutrition Program (WIC), or Temporary Assistance for Needy Families (TANF). About one in five households that qualify for and use government assistance must have a maximum annual income of $26,546 for a family of three.

Participants can only renew their service four times, amounting to four years of discounted Prime. That condition coincides with the maximum average length of time people use economic assistance programs, including Medicaid, according to the Census Bureau: 56 percent of participants stop after 36 months, with the remaining 43 percent using assistance programs up to four years. About 31 percent stop receiving government aid within the first year.

But those benefits are at risk of being significantly cut back thanks to the Trump administration’s proposed budget cuts this year. The president announced his budget in May, which suggested slashing the SNAP budget by $193 billion over 10 years — a move that will largely hurt his supporters.

The SNAP program supports more than 22 million households, totaling about 45 million people, according to a Quartz analysis. Most heads of those households are white American citizens residing in states that voted for Trump in the 2016 election. Half of them, about 40 million, are children or elderly.