Chart of the Week: Food Stamp Payment Error Rates
The U.S. Department of Agriculture released fiscal year 2025 payment error-rate data for the Food Stamp program, showing that the level of waste, fraud, and abuse is too high.
The national payment error rate was 10.62% in FY 2025, equivalent to about $10.2 billion. Most reported payment errors were overpayments: the national overpayment rate was 9.28%, compared with a 1.33% underpayment rate.
Reported Food Stamp payment error rates varied widely across states in FY 2025. An astonishing 23.15% of Food Stamp payments in Alaska were reported as errors, along with 18.66% in Washington D.C., 16.81% in New Mexico, 16.00% in Delaware, and 15.21 in Georgia.
Meanwhile, South Dakota reported only a 2.47% error rate, followed by 3.85% in Idaho and 3.96% in Wyoming.
High Payment Error Rates Will Require States to Share Costs
The One Big Beautiful Bill Act requires states with error rates at or above 6% to pay a small share of the cost of Food Stamp benefits for the state.
A state cost-sharing requirement does not reduce or change the federal Food Stamp benefit formula. It simply requires the states, which administer the program, to begin paying their fair share and provides an important incentive to address widespread waste, fraud, and abuse.
The state cost share begins in FY 2028 and is set on a sliding scale based on the reported payment error rate.
For FY 2028, states may elect to use their FY 2025 or FY 2026 payment error rate.
However, a last minute “Alaska carveout” provision inserted by Sen. Lisa Murkowski (R-AK) delays implementation of the state cost share for the states with the worst payment error rates. For states with an error rate of 13.33%1 or greater, no cost share is required until FY 2029. States whose error rates exceed 13.33% in FY 2026 do not pay a cost share until FY 2030. This provision perversely incentivizes states to tolerate higher Food Stamp payment errors and provides a federally financed reward to the most irresponsible states.
“Error Tolerance Threshold” Means Reported Error Rates Understate Improper Payments
We know that improper payments are likely significantly higher than the reported amounts. The 2014 Farm Bill instructs USDA to ignore improper payments up to a “quality control tolerance threshold.” This threshold was set at $37 in 2014 and increases with inflation each year.
The error tolerance threshold was $57 in FY 2025. Therefore, any payment error of $57 or less was excluded from the official FY 2025 payment error-rate calculation.
The proposed House (Sec. 4105) and Senate (Sec. 4108) Farm Bills both include provisions that would require USDA to provide a supplemental report on the true error rates. However, both bills would keep the error tolerance threshold for the official error reporting, meaning the state cost shares would be based on data that explicitly tolerates improper payments.
The Snap Back Inaccurate SNAP Payments Act, introduced by Rep. Randy Feenstra (R-IA) and Sen. Joni Ernst (R-IA), would clarify that all improper payments must be counted as errors in the official data.
Technically an error rate that “multiplied by 1.5 equals or exceeds 20%,” which rounds to 13.33%.