SNAP has one of the most rigorous quality control systems of any public benefit program.Each year, states pull a representative sample of cases (totaling about 50,000 nationally) and review their decisions on which applicants received benefits and how much. Federal officials then double-check a subsample of the cases. States face federal financial sanctions if they don’t lower high error rates.
Only 3 percent of SNAP benefits represent overpayments, meaning they either went to ineligible households or went to eligible households but in excessive amounts. SNAP achieved its lowest error rate on record in fiscal year 2011, with a national overpayment rate of just 2.99 percent (see graph). The underpayment rate that year was 0.81 percent. Thus, the net loss to the federal government — the amounts lost through overpayments minus those saved by underpayments — was only 2.2 percent.
Relatively few payment errors reflect dishonesty or fraud. The overwhelming majority result from honest mistakes by recipients, eligibility workers, data entry clerks, or computer programmers. States report that almost 60 percent of the dollar value of overpayments and almost 90 percent of the dollar value of underpayments were their fault, not recipients’. Much of the rest of the overpayments resulted from innocent errors by households that had trouble navigating SNAP’s complex rules.
The Agriculture Department estimates it has cut the sale of SNAP benefits for cash by three-quarters over the past 15 years, to 1 percent of all benefits. To reduce SNAP trafficking, which violates federal law, SNAP benefits now come in the form of an electronic debit card that recipients can use only to buy food. Retailers or recipients who defraud the program by trading SNAP for money or misrepresenting their circumstances face tough criminal penalties. Over the years, the Agriculture Department has disqualified thousands of retail stores from the program for trafficking or other violations of program rules.
Almost 95 percent of federal SNAP spending goes directly to families to buy food. Most of the rest goes toward administrative costs, including reviews to determine that applicants are eligible, monitoring of retailers that accept SNAP, and anti-fraud activities.
For more information, see our Chart Book.Next up: SNAP responded as designed to the recession and will shrink as the economy recovers.