The federal government erroneously distributed $10.1 billion through the Supplemental Nutrition Assistance Program in fiscal year 2025. That figure represents more than 10% of the program’s total spending, driven by administrative mistakes at the state level: overpaid benefits, underpaid benefits, eligibility miscalculations, and paperwork errors that cascade across millions of households. For a program serving 37 million economically precarious Americans, the mismanagement has triggered a fiscal and political fight over who pays to fix it.
SNAP functions as the country’s primary food safety net. In fiscal year 2024, it cost just over $100 billion, providing an average of $187.20 a month per person to 41.7 million people. The federal government funds benefits entirely and splits administrative costs with states, which run the program at ground level: processing applications, verifying eligibility, and issuing benefits through prepaid Electronic Benefit Transfer cards.
On June 24, 2026, the U.S. Department of Agriculture released its annual payment error rate data for fiscal year 2025. The national rate hit 10.62%, far surpassing the congressional threshold of 6%. That rate translates to $10.1 billion in improper payments nationwide.
What the FY2025 Data Actually Shows
The USDA’s annual SNAP payment error rate measures how accurately states determine who is eligible for SNAP and how much they should receive. The national payment error rate for fiscal year 2025 is 10.62%, representing $10.1 billion in improper payments nationwide, including both overpayments and underpayments.
SNAP provided $95.7 billion in benefits to American families during fiscal year 2025, meaning payment errors accounted for roughly one-tenth of the program’s spending. While the 2025 rate marked a slight improvement from 10.93% in fiscal year 2024, USDA data shows error rates down from 11.68% in fiscal year 2023. The trajectory is moving in the right direction, but nowhere near fast enough to satisfy federal lawmakers who set the acceptable threshold at 6% and have written financial penalties into law for states that miss it.
“These payment error rates are further proof that state accountability is severely lacking in SNAP,” said Agriculture Secretary Brooke L. Rollins. USDA Deputy Secretary Stephen Vaden was equally direct, posting on X that “if you accept federal dollars, you must administer the program with integrity and by the rules of the road,” adding that “anything less than that is disrespectful to the program, its beneficiaries, and to the millions of taxpayers footing the bill.”
How Payment Error Rates Are Measured
The SNAP Quality Control system measures how accurately states determine a household’s eligibility and benefits. Both USDA and states identify underpayment and overpayment errors. Underpayments occur when a household receives fewer benefits than entitled; overpayments occur when a household receives more than entitled.
Each month states review a select number of household case files, totaling 50,000 per year from all states combined. The USDA then conducts a second review of approximately half the state cases to determine benefit errors.
The true amount of improper payments is likely higher than the official figure because the program’s quality control system excludes errors below its tolerance threshold ($58 for fiscal year 2026) from the official count.
Error, Waste, and Actual Fraud: A Critical Distinction
The word “fraud” dominates the headlines, but experts consistently emphasize that the payment error rate is not a fraud rate. SNAP errors occur when the state overpays or underpays SNAP recipients, stemming from a range of administrative and recipient-reporting failures rather than deliberate deception.
Researchers who study SNAP have told Newsweek that error rates are not equivalent to fraud and arise from a range of administrative factors, including understaffing, caseload spikes, and IT systems failures.
“Payment errors are not intentional or fraud,” said Celia Cole, CEO of Feeding Texas. “They are honest mistakes made by the state or participants.” A state could hypothetically have a 3% overpayment rate and a 3% underpayment rate (the exact right amount of dollars going out the door) and that would still produce a 6% payment error rate.
Deliberate fraud does exist within the system. Large sums, in the millions, have been stolen by sophisticated crime rings that electronically “skim” money from the debit cards SNAP recipients use to purchase food. In 2025, California reported more than $100 million in stolen funds from SNAP recipients’ EBT cards. States reported replacing more than $360 million in stolen benefits from fiscal 2023 through 2025, according to federal data.
The GAO documented that hundreds of millions of dollars in benefits have been reported stolen from SNAP recipients’ EBT cards in recent years. A USDA report published in May flagged other potential fraudulent activity, including recipients with dummy Social Security numbers and duplicate enrollments, that could add up to roughly $3 billion in annual improper payments, though the report described the findings as possible issues rather than confirmed fraud.
The State-by-State Breakdown
The national average obscures enormous variation at the state level. South Dakota had both the lowest payment error rate overall (roughly 2%) and the lowest overpayment error rate (roughly 2.5%). Overall payment error rates and overpayment error rates were less than 4% in Idaho and Wyoming. Only 10 governors can currently claim average SNAP payment error rates below the 6% threshold.
At the other end, Georgia had a payment error rate in fiscal year 2024 of 15.65%, and Florida ranked among the highest at 15.13%. New Jersey saw the largest single-year decline, reducing its error rate from 14.33% in FY 2024 to 6.86%, potentially reflecting the state’s efforts to work more closely with county offices and implement additional quality control protocols. Hawaii’s error rate shot up from 6.68% to 10.92%, likely due to dropping net income limits for some households and absorbing caseload increases from extending eligibility to Compact of Free Association residents.
Florida: The $1 Billion Warning
Figures released by the USDA show Florida’s 2025 error rate at 12.97%, reflecting a timeframe from October 2024 to September 2025. While the error rate is down from 15% in 2024, it is still much higher than pre-pandemic levels.
The financial stakes for Florida are enormous. The new federal rules mandate that states with an error rate above 10% must pay 15% of the costs of benefits, or around $984 million in Florida. States are expected to pay as soon as October 2027, although Florida could qualify for an exemption to push back that deadline another year.
The WUSF report on the state’s situation captures the stakes vividly, with Florida Policy Institute Chief Strategy and Development Officer Holly Bullard warning that “unless Florida lawmakers act to raise revenue to preserve SNAP and make up for the loss in federal funds, we will see a cut to SNAP program eligibility or benefits, or cuts in other areas of the state budget” (a blow that would arrive in the same fiscal year state economists project a $6 billion deficit).
Factors contributing to Florida’s high error rate likely include workers’ unpredictable schedules, a large share of beneficiaries being older adults, and the demand for disaster food assistance following hurricanes. To address the problem, the Florida Legislature agreed to appropriate $4 million to the Department of Children and Families in the fiscal year 2026-27 budget for an artificial intelligence-driven system to help lower the error rate.
The One Big Beautiful Bill: New Penalties, New Loopholes
The fiscal pressure on states is not accidental. It is the direct result of legislation signed into law in July 2025. As part of his sweeping tax package known as the One Big Beautiful Bill Act, President Donald Trump brought in new guardrails for improper SNAP payments, meaning that states with error rates at or above the 6% threshold will be responsible for covering 5%, 10%, or 15% of their states’ benefits. The higher their payment error rate, the higher the percentage of SNAP benefits they will have to cover. The 2025 fiscal year is also the first that could be used to calculate those percentages, and the measure will take effect October 1, 2027.
The financial transfer is substantial. Applied to FY 2025 spending, the new cost-sharing schedule would redirect an estimated $9.4 billion in annual benefit costs to states beginning in FY 2028. A separate change to administrative funding adds close to $3 billion more. The combined transfer is roughly $12.4 billion a year. States that previously paid nothing toward SNAP benefits now face billion-dollar line items in their budgets. Unlike with other federal entitlement programs, states have not contributed any dollars to actual SNAP benefits. The U.S. government has covered 100% of the cost of benefits and 50% of states’ administrative costs, spending $101.7 billion in fiscal year 2025.
Congress also embedded a significant carveout into the law. Republicans included a provision nicknamed the “Alaska Carveout” that delays the cost-sharing requirement for states with exceptionally high improper payment rates by up to two additional years. Specifically, states with error rates above 13.34% in fiscal year 2025 will not face cost-sharing requirements until fiscal year 2029.
States Gaming the System
The carveout has already generated a perverse incentive. States that saw an increase in their payment errors, such as Delaware and Illinois, are granted a reprieve until at least FY 2029. To qualify for the exemption, officials in New Mexico admitted to slowing down efforts to tighten the state’s verification standards. The logic is straightforward and deeply cynical: dropping below 13.34% could trigger up to $153 million in cost-sharing requirements for New Mexico. Under current rules, it is now cheaper for the state to maintain high error rates.
The situation in Maryland was more alarming still. A whistleblower claimed that two senior officials in Maryland were planning to deliberately leave correctable errors uncorrected to keep the state’s payment error rate elevated so it could “get the state off the hook for $240 million in new federal penalties.” After disclosing this “unlawful and unethical conduct” to the Office of the Inspector General, the whistleblower was fired.
Six states and the District of Columbia qualify for a temporary exemption under the Alaska Carveout. It grants states with improper payment rates above 13.34% up to a two-year exemption from financial penalties, rewarding the worst-performing states while penalizing those that worked hardest to reduce their error rates.
What Corrective Action Looks Like
For the many states that do not qualify for the carveout and cannot afford the penalties, the federal government has outlined a path forward. States with payment error rates at or above the 6% threshold are required to submit a Corrective Action Plan to USDA’s Food and Nutrition Administration detailing how they will address the root cause of their errors. Some of these states may also be liable for a separate financial penalty as part of the SNAP quality control process.
The corrective action process is not new, but the financial stakes attached to it now are. Republican proposals have mostly focused on more frequently verifying the eligibility of individual households, rather than addressing broader administrative shortcomings. Policies such as verifying recipients’ eligibility each month (which can involve cross-checking multiple databases or collecting extra documentation) might increase state agencies’ workloads without lowering error rates. This is especially likely if states don’t boost funding to handle the extra paperwork, investigate fraud, or resolve recipient and agency errors.
Eliza Kinsey, an assistant professor at the University of Pennsylvania’s Perelman School of Medicine who focuses on hunger, observed that staffing shortages, outdated technology, and changes to eligibility rules that require oversight are making it harder for state agencies to avoid the overpayments and underpayments that now carry direct financial penalties. “States have never before had to put up a share of the benefit costs, and based on the 2025 data, almost half the states are facing a cost-sharing requirement that’s going to cost them $100 million or more in the first year of implementation,” Katie Bergh, a SNAP expert at the Center on Budget and Policy Priorities, told CBS News.
Some analysts warn the US may even see states withdraw from the program entirely, citing an APHSA survey of all 50 state SNAP agencies that found 11% identified withdrawing from the food aid program as a potential risk due to higher expected costs.
The Human Stakes Behind the Numbers
Families currently enrolled in SNAP are already feeling the ripple effects of these reforms, even before the cost-sharing deadlines arrive. SNAP enrollment has already fallen sharply since President Trump signed the OBBBA into law on July 4, 2025. About 37 million people were enrolled in SNAP as of March (the most recent data available, according to USDA figures), representing a decline of almost 5 million people from a year earlier. The program that once covered more than 42 million low-income Americans now serves a materially smaller population as new eligibility restrictions take hold.
The sharp drop in SNAP enrollees is largely attributable to recent changes under the OBBBA, including a new work requirement for “able-bodied adults” aged 64 or younger. The new regulation restricts SNAP benefits to three months of aid every three years if people under 64 don’t work, volunteer, or participate in job training for at least 80 hours a month.
Congress can also eliminate error-prone policies like broad-based categorical eligibility, which is associated with disproportionately high improper payments compared to traditional eligibility, in part because states have used it to streamline program administration by weakening their verification protocols. Whether that policy path can reduce error rates without also reducing the number of legitimately eligible households that receive benefits is a question researchers and advocates on both sides are pressing hard.
Where This Leaves 37 Million People
A 10.62% national error rate translating to $10.1 billion in improper payments is not a tolerable baseline for any government program, but the policy response that follows matters as much as the number itself.
The evidence is clear on several points. The vast majority of improper payments arise from administrative failures (overpayments and underpayments caused by understaffed agencies, outdated technology, and applicants who misreport information without deliberate intent) rather than from the organized criminal fraud that dominates political messaging. Real fraud also exists and costs taxpayers meaningfully, particularly through EBT card skimming schemes and benefit trafficking, but conflating the error rate with the fraud rate produces a distorted picture that makes effective reform harder, not easier.
The penalty structure enacted in 2025 has already produced unintended consequences: states deliberately preserving high error rates to avoid crossing thresholds that would trigger cost-sharing requirements. That pattern, documented in New Mexico and allegedly orchestrated at a senior level in Maryland, reveals a structural flaw in the reform itself. Financial incentives that reward the worst performers with exemptions, while pressing mid-tier states for compliance, do not produce the accountability Congress intended.
What comes next depends heavily on whether states can modernize their eligibility systems, whether Congress closes the loopholes states are already exploiting, and whether federal food policy can hold two competing obligations at once: accuracy to the taxpayer and access for the roughly 37 million Americans who still rely on these benefits to eat. The political argument has fixated on the dollar figure. The harder question (which neither side has answered cleanly) is what reforms will actually lower error rates without stripping food assistance from the eligible families the number was never meant to penalize in the first place.
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AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.