The Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, has seen a significant increase in payment error rates, with the Trump administration citing this as evidence of waste and abuse in the program. According to data released by the Department of Agriculture on June 24, the SNAP payment error rate for fiscal year 2025 was 10.6%, nearly double the acceptable threshold established under the "big, beautiful bill act" (OBBBA). This translates to over $10 billion in improper payments across the US.
Payment errors occur when households receive too much or too little in benefits, and experts say these are often unintentional due to complex policy requirements and reporting issues. However, anti-hunger advocates argue that focusing on payment error rates can lead to confusion with actual SNAP fraud, which involves intentional wrongdoing such as trafficking benefits for cash or using stolen EBT card information.
Under the OBBBA, states must maintain a payment error rate below 6% to avoid shouldering more of the program's costs. Currently, only 10 states have met this threshold, with South Dakota having the lowest error rate at 2.5%. Alaska has the highest error rate at 23%, and under the new law, states will be required to pay a share of benefit costs starting in October 2027.
The estimated cost-sharing requirement for states could reach $9 billion based on current payment error rates, with almost half of all states facing a cost-sharing requirement that would cost them over $100 million in the first year. This has raised concerns about potential tax increases or budget cuts elsewhere in state budgets.
Background:
- The SNAP program provided $95.7 billion in benefits to American families during fiscal year 2025.
- Actual SNAP fraud is estimated to have cost around $1-3 billion annually, but this data is not included in the payment error rate calculation.
- States are working to reduce their error rates and avoid shouldering more of the program's costs under the OBBBA.