Dozens of states are at risk of incurring significant new costs related to the Supplemental Nutrition Assistance Program (SNAP) if they do not reduce their payment error rates, according to newly released data from the U.S. Department of Agriculture. A federal law enacted last July, intended to offset tax cuts through federal savings and increased accountability, mandates that states begin sharing in the cost of SNAP benefits if their error rates exceed a set percentage.
The error rate is defined as the percentage of SNAP benefits paid out either above or below the amount recipients were eligible for, primarily due to administrative or recipient mistakes. Under the new law, states with error rates of 6% or greater could be required to pay a portion of these benefit costs starting in October 2027. The federal government currently covers the full cost of benefits.
Nine states, however, have maintained error rates low enough to be exempt from this cost-sharing requirement. These states, which include South Dakota with the lowest rate at approximately 2.5%, Nebraska at 5.9%, and others like Idaho, Iowa, Kentucky, Vermont, Utah, Wisconsin, and Wyoming, will not face new financial obligations related to SNAP benefit payouts. States must choose to use either their 2025 or 2026 error rates to determine their cost-share obligation beginning in October 2027.
For states with higher error rates, the financial implications could be substantial. The federal law establishes a tiered system: states with error rates between 6% and 8% will be responsible for 5% of benefit costs; those between 8% and 10% will pay 10%; and states with rates exceeding 10% will be liable for 15% of benefit costs.
For example, Missouri, which had an 8.7% error rate in the last fiscal year, could be required to cover 10% of its SNAP benefit costs. With Missouri residents receiving approximately $1.5 billion in SNAP benefits in 2024, this could amount to $150 million annually, a sum that rivals the budgets for several state prisons. These potential costs may force states to make difficult decisions, such as reducing funding for public services like schools, law enforcement, or mental health care, or potentially making it harder for residents to remain eligible for SNAP.
States with the highest error rates, specifically those at or above 13.34% in fiscal year 2025, will receive a delay in their cost-sharing requirements until at least fiscal year 2029. Alaska, with an error rate exceeding 23%, is among the jurisdictions that will benefit from this delay. Other states and the District of Columbia receiving a one-year delay include Delaware, Georgia, Illinois, New Mexico, and Oregon. States meeting the 13.34% error rate threshold in fiscal year 2026 could see their cost-sharing delayed until fiscal year 2030.
A recent survey indicated that most states are actively investigating the causes of their SNAP payment errors, which appear to be equally split between recipient and administrative mistakes. Many states plan to increase staffing dedicated to error reduction. However, some states are also preparing for the possibility of having to pay a portion of benefits. Over a quarter of responding states indicated they might consider tightening eligibility policies, and four states are contemplating withdrawing from the SNAP program entirely, though these states were not identified.
Advocates for low-income individuals have called on Congress to postpone these cost-sharing requirements for all states, arguing that the changes are being implemented at a time of high grocery prices and after millions have already lost food assistance. The Supplemental Nutrition Assistance Program provided benefits to over 37 million people nationwide in March, a decrease of more than 11% from the previous year.