The Agriculture Department (USDA) will issue data in the next few days on how well states delivered SNAP (formerly food stamp) benefits to the right households and in the right amounts last year, and here’s the first thing to keep in mind: SNAP errors have fallen considerably in recent years, reaching all-time lows; 99 percent of SNAP benefits were issued to eligible households in 2012, for example.
The 2013 figures probably won’t be very different, but they deserve close attention given SNAP’s size and importance, so here’s a brief explanation of what to look for.
USDA issues three SNAP payment error rates for each state:
The overpayment error rate counts benefits issued to ineligible households or to eligible households in excess of what program rules direct.
The underpayment error rate measures errors in which eligible, participating households received smaller benefits than program rules direct.
The combined payment error rate is the sum — not the net — of the overpayment and underpayment error rates.
That last point is key. In the past, some critics have presented the combined error rate as a measure of excessive federal SNAP spending due to errors. This is incorrect: the combined error rate includes both overpayments, which cost the federal government money, and underpayments, which save money.
For example, overpayments represented 2.77 percent of total payments in 2012, while underpayments were 0.65 percent (see chart), for a net loss due to errors of only 2.12 percent of program costs. And even the 2.12 percent figure overstates the federal cost of SNAP errors, since it doesn’t account for the benefits that eligible households didn’t collect due to improper denials and terminations.
It’s also worth noting that an overpayment is counted in a state’s error rate whether or not the overpaid benefits are collected back from households. In fiscal year 2012, states collected over $200 million in overissued benefits.