Supreme Court allows President Trump to pay part of SNAP benefits
Tens of millions of Americans are spending the weekend hungry as they await resolution to a political and legal battle over federal food aid.
- New cost-sharing laws could put SNAP benefits at risk for tens of millions of Americans.
- States will be required to fund a portion of their SNAP benefits over the next several years based on payment error rates.
- Experts have warned that states that can’t afford the new costs could cut benefits or leave the program altogether.
Tens of millions of Americans are once again at risk of losing Supplemental Nutrition Assistance Program (SNAP) benefits if the Affordable Care Act goes into effect as planned in the government’s 2028 fiscal year, which begins in October 2027, experts say.
While most people are aware of the new SNAP work requirements included in the giant tax and spending package passed on July 4, experts say the dramatic change is the cost-sharing provisions.
The federal government has always fully funded SNAP benefits, but states will be required to fund a portion of their benefits starting in FY28, from October 2027 to October 2028, based on their error payment rates. The error rate measures how accurately state agencies determine participant eligibility and benefit amounts and includes both overpayments and underpayments to households.
Payments aren’t required until FY28, but error rates in FY25 and FY26 will determine how much states must contribute to SNAP. Error rates for fiscal year 2025 are not yet available, but the latest data suggests most states are likely owed hundreds of millions of dollars they don’t have.
This “will almost certainly lead some states to significantly reduce their participation in SNAP, and other states will likely end their participation in the program altogether,” said Lauren Bauer, a research fellow at the Brookings Institution, a nonprofit policy research group.
How will the new cost sharing work?
The higher the error rate, the higher the cost burden, except for states with error rates above 13.32%. You will also be exempt from paying a portion of your SNAP benefits for up to two years.
The prices for everyone else are as follows.
- If it’s less than 6%, states won’t have to pay a portion of SNAP benefits.
- If it is 6% or more but less than 8%, the state will pay 5%.
- If it is 8% or more but less than 10%, the state will pay 10%.
- If more than 10%, the state pays 15%
What does this mean for Americans?
The Congressional Budget Office said in August that states would react differently to the new bill.
The report said that if error rates cannot be reduced and states cannot afford to pay their share of SNAP benefits, “some states will maintain their current benefits and eligibility, while others will change benefits and eligibility or leave the program altogether.”
Twenty-three governors signed a letter to legislative leadership in June saying they may have to end the SNAP program and explaining how the policy change would harm their constituents. Approximately 42 million Americans, more than 12% of the population, receive an average of $6 per day in SNAP benefits. Approximately 40% of beneficiaries are children.
During the record-breaking 43-day government shutdown that began on October 1, many Americans found it difficult to buy food after missing just one month of benefits. Analysts said losing SNAP entirely would have dire consequences.
The fallout from SNAP could also impact non-SNAP recipients, they said.
States “may make significant cuts elsewhere in their budgets to make room for increased spending on SNAP, or they may raise taxes or revenues through other means to make room to stay in the program,” Bauer explained.
Some experts say the continued high error rate could prompt the USDA to suspend the program in the state.
“Unless a state complies with the program’s rules and pays the required contributions, the USDA could deem the state out of compliance and withhold federal funds, withhold benefits, or effectively block the issuance of SNAP benefits,” said Kent Smetters, director of Penn Wharton Budget Modeling, which analyzes major legislation.
“In other words, while USDA cannot ‘cancel SNAP’ as a legal program per se, continued noncompliance, such as not paying the 15% match when requested, could result in the cutoff of federal SNAP funds,” he said. That’s “for households like SNAP, which will feel shut down until the state fixes the problem.”
Can states reduce their error rates?
This year, the National Governors Association discussed ways to reduce the incidence of payment errors while minimizing disruption to deliveries to beneficiaries. Suggestions include identifying where errors occur, using technology like AI and automation to prevent them, and improving employee training and morale.
“Two-thirds of states could have to pay $100 million in cost-sharing penalties, leading to intense lobbying from states and territories to reduce error rates,” the report said.
According to the U.S. Department of Agriculture, the average error rate in fiscal 2024 was 10.93%. South Dakota is the only state whose error rate has never exceeded 6% since 2003, Bauer said.
However, reducing error rates is not easy. States would also begin paying more to implement SNAP within their states. Starting in fiscal year 2027, or October 2026, each state’s share of administrative costs will rise from 50% to 75%, leaving states with even less money to invest in reducing error rates and paying fines.
Between the increased administrative burden and error rate penalties, SNAP costs will rise sharply in every state, according to Georgetown Law’s Center on Poverty and Inequality. On average, states would have to spend two to three times their budget on SNAP, with a median increase of about 202 percent.
Will anyone win?
The savings to the federal government could be huge, experts say.
Based on the latest SNAP data, Professor Smetters estimates that, for example, if Illinois were to cancel SNAP alone, it would save the federal government $5 billion to $6 billion annually in benefits, as well as a relatively small amount of federal administrative funding.
Aside from that, Bauer said the new law is a “very bad idea.” “I’m very nervous, so I want to make people more nervous,” he says, focusing on this issue. “There is growing concern that Congress may have mistakenly ended the program.”
The government could choose not to enforce the law, but Bauer said the government doesn’t seem willing to do so because it insists on stamping out fraud. He said Congress would need to pass a new law to remove the new requirements.
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
