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HR1 SNAP Information Resources

Explaining Error Rates

How did we get here?

During the COVID-19 pandemic states required reporting to Food and Nutrition Services (FNS) was paused. When it resumed, states faced larger caseloads, staff shortages, outdated technology, and new reporting rules. These combined pressures, not fraud, explain today’s higher error rates.

What is the difference?

Errors are unintentional mistakes in eligibility or benefit amounts. Fraud involves intentional deception and is very rare in SNAP.

How does it actually work?

A strong quality control (QC) system monitors SNAP with the following four steps to quality control:

State Review: State agencies randomly select a sample of households participating in SNAP in their state each month. State agency staff interview participants and conduct a detailed examination of their households circumstances. This information is used to measure how accurately states determined the selected households’ eligibility and benefit amounts. States calculate the number of errors — both overpayments and underpayments.
Corrections: Errors are corrected. Overpayments must be paid back and underpayments are reimbursed, so each household gets exactly what it is eligible for.
Federal Review: USDA double checks the accuracy of approximately 25,000 of the cases reviewed by each state. USDA then validates that the states’ reviews were done properly and in line with policy. If a review is inaccurate, USDA changes the finding so it is correct or sends the case back to the state for further review. The goal is to get an accurate finding.
Analysis: USDA analyzes the data, taking into consideration the size of a state’s caseload and other variables. Based on that analysis, USDA establishes national and state payment error rates.

States with high error rates must submit Corrective Action Plans (CAPs) that outline fixes, timelines and monitoring steps.

Errors are Complex

Error rates may reflect many factors beyond basic program integrity including:

Complex Cases: Households with fluctuating work hours, custody changes or multiple earners are harder to process than say seniors with a stable income.
Technology Problems: New eligibility systems can create errors and overwhelm staff.
Policy Choices: State rules on verification, certification periods, and data-matching affect how errors show up.
Federal Changes: USDA’s 2022 revision of section 751 and 752 of its Handbook 310, which governs the QC system and its decision to count “technical errors” -like missing paperwork even when benefits are correct – caused rates to spike in many states.

What are the implications of HR 1

SNAP Cost Shifts – Legislation was passed in 2025 that will impact SNAP for states.

H.R. 1 reduces the Federal Share of SNAP administrative Cost from 50% to 25% starting in FY 2027. This means Tennessee will have to cover 75% of the administrative costs.

In FY 2028 States will also have to pay a share of SNAP food benefits based on payment error rates:

Below 6%: 0% match the state
6-8%: 5% match by the state
8-10% : 10% match by the state
Over 10%: 15% match by the state

HR 1 Impacts to State Budget – FY27

Administrative Cost Shift from 50/50 will now be 75 state/25 federal starting Oct. 1, 2026. Tennessee had to account for this shift before July 1, 2026 when our fiscal year began.

TN State Budget for DHS has been impacted – During budget hearings Commissioner Carter requested $58M for Tennessee FY27 to cover administrative costs from Oct. 2026 – June 2027. Estimates $77M for a full year.

Oct. 1, 2027, States will have to put in a portion of SNAP benefits as well if they are not under 6% error rate. Tennessee’s most recent error rate was 9.44% which would mean $171M* in costs, which will need to be included in the state budget set to start July 1, 2027.

*Per Food Research &Action Center report June 2026

Second Harvest Response to HR1

Fall of 2025 began to educate our elected officials and our partner agencies to implications of HR 1, raising up need for BBCE in TN to help address error rates. During the shutdown we raised our concerns again through web-based trainings to both our neighbors and our partners in the region highlighting the impacts that would occur past the shutdown and beyond.

This spring we conducted advocacy trainings for our neighbors and partners and included HR 1 and the Tennessee FY 27 budget implications. We have actively been raising the alarm at both the federal and the state level with our elected officials during 2026 regarding the administrative cost share and the pending error rate cost shift if our numbers are not reduced.

Broad Based Categorical Eligibility/Cat-El

Policy Changes – Administrative Implementation in 2026

Increase Income Eligibility Limits (from 130% up to 200%
Eliminated Asset Test

How would this help Tennessee Families???

Allows low-income households to save for the future
Simplifies SNAP administrative burden
Enables more families to become eligible

Tennessee DHS implemented Cat- EL this Spring, announcing in legislative hearings they hope it will help lower the error rates in TN by as much as 2 percentage points.