Food Stamp Reform Act of 1981

Food Stamp Reform Act of 1981 - Amends the Food Stamp Act of 1977 to authorize participating States, rather than the Secretary of Agriculture, to establish eligibility criteria for participation in the food stamp program. Eliminates the uniform eligibility disqualifications and the uniform value of allotment.

Eliminates from the State plan of operation all references to or requirements relating to: (1) Federal programs; (2) determinations to be made by the Secretary of Agriculture; and (3) limitations placed on the State agency. Directs the State agency to establish a work program requiring performance of work as a condition of eligibility to receive benefits under the food stamp program. Permits States participating in the food stamp program to establish a program designed to encourage households receiving coupons to purchase nutritional food.

Eliminates the Secretary's authority over the administration of the program by the State agencies. Eliminates the administrative cost-sharing and quality control provisions of such Act. Limits the percentage of funds a State agency may use for administrative costs.

Eliminates the Secretary's authority to conduct pilot projects and study the feasibility of recovering food stamp benefits from specified households.

Sets forth a formula for the distribution of funds by the Secretary to the participating States to provide benefits and pay administrative costs. Directs the State agency to submit annually to the Secretary reports setting forth the purposes for which such funds will be and have been disbursed. Eliminates all Federal restrictions on the value of allotments received by each participating State.

Amends the Food Stamp Act Amendments of 1980 to eliminate specified medical deductions for determining income eligibility.