New federal SNAP rules now put states on the hook for costly mistakes in their food stamp systems.
Quick Take
- The United States Department of Agriculture (USDA) says the national SNAP payment error rate hit 10.62% in fiscal year 2025.
- H.R. 1 ties new state benefit costs to error rates starting in fiscal year 2028.
- States with error rates above 6% can face match rates of 5%, 10%, or 15%.
- The same law also cuts the federal share of SNAP administrative costs starting in fiscal year 2027.
How the new SNAP penalty system works
USDA said the fiscal year 2025 national payment error rate reached 10.62%, far above the 6% threshold that now matters under H.R. 1. The department also said those errors added up to $10.1 billion in improper payments nationwide. Under the law, states with error rates at or above 6% will have to pay part of SNAP benefits starting in fiscal year 2028.
The law uses a tiered system that gets harsher as errors rise. States with error rates from 6% to under 8% must cover 5% of SNAP benefits. States with rates from 8% to under 10% must cover 10%. States at 10% or higher must cover 15%. States may use either their fiscal year 2025 or fiscal year 2026 error rate to set that share.
What this means for state budgets
The fiscal year 2025 numbers leave many states exposed to new costs. The Hamilton Project said 41 states and the District of Columbia could face cost-sharing obligations based on the new rules, while only 15 states and the district would fully avoid them. USDA also said states with error rates at or above 6% must submit a corrective action plan that explains how they will fix the root causes of their mistakes.
That setup matters because the law does not wait long. USDA said the first usable error-rate year is fiscal year 2025, and the cost-sharing rules begin in fiscal year 2028. The bill also reduces the federal payment for SNAP administrative costs from 50% to 25% beginning in fiscal year 2027, which shifts more of the bill for running the program to the states.
Why critics say the rule may punish complexity, not just waste
Critics argue that error rates do not always prove state negligence. The Food Research and Action Center describes SNAP payment error rates as measures of how well states make eligibility and benefit decisions, but those rates include both overpayments and underpayments. That leaves room for disputes over whether high error rates reflect bad management, hard rules, weak technology, or all three. Some states also warn that the new law adds extra red tape that could make the problem worse.
That tension is already visible in state data. USDA’s fiscal year 2025 report said West Virginia had a 6.6% error rate, which puts it in range for new cost sharing. Other states, including Maryland and New York, also remain above the 6% line even after improvement. Supporters of the law say that is exactly the point: states should not keep shifting the cost of sloppy administration onto taxpayers.
Washington State
Waste, Fraud, Abuse + Incompetence
TAXPAYERS ON THE HOOK FOR $90 MILLION DOLLARS PLUS
July 6, 2026
Penalties loom for Washington if state doesn’t improve food stamp error rates
OLYMPIA [Jake Goldstein-Street]—Washington’s food stamp overpayments and… https://t.co/CbWZHFzV0J pic.twitter.com/Ka8s7u6XoC
— S.A. Dupres (@Susan_Dupres) July 6, 2026
The broader fight is about accountability versus government overreach. For years, Washington funded SNAP almost entirely on its own, while states faced limited financial pain for high error rates. H.R. 1 changes that by making state mistakes expensive. Backers call it a needed guardrail for a program that now sends billions in improper payments. Critics call it a harsh cost shift that may hit states already struggling with complex rules and rising caseload pressures.
What happens next
States now have a narrow window to prepare before the fiscal year 2028 cost-sharing rules take effect. The biggest practical question is whether governors and state welfare agencies can lower error rates fast enough to avoid new bills. USDA’s figures show that the problem is not small, and the law’s structure leaves little doubt that future mistakes will carry real financial pain for state budgets and, by extension, taxpayers.
Sources:
reason.com, congress.gov, lulac.org, feedingamericaaction.org
