MLive Guest column: There’s little reason to fear that food stamp program is rife with fraud

Reposted from MLive,January 10, 2014 


By Terri Stangl

Now that the holidays are over, Congress is returning to discuss the future shape of the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps).

During the recent Farm Bill debates, some have demanded cuts in the SNAP program, claiming that the program’s growth in recent years is the result of waste or fraud. In fact, the program is heavily monitored and enjoys exceptional program integrity.

A report released on New Year’s Eve by the United States Department of Agriculture (USDA) indicates that in FY 2012 SNAP had an accuracy rate of 96.58% nationwide, a record high. In Michigan, the accuracy rate was 96.45%. USDA estimates that 65.92% of SNAP payment errors are due to agency oversight, miscalculation of eligibility and untimely actions.

Even when the agency is at fault for overpayments, recipients are required to repay the funds. The overpayment can be collected from current benefit allotments and out of any tax refunds.

While SNAP fraud does exist, it is rare. Allegations of fraud are actively investigated by the state Office of Inspector General and the United States Department of Agriculture. As a result, SNAP fraud rates are among the lowest of any governmental program. Only $0.01 per dollar was used fraudulently from 2009-2011, down from a high of $0.04 per dollar in the 90s.

Historically, the most common forms of SNAP fraud are: trading SNAP funds for cash, selling purchases made with SNAP benefits and using SNAP benefits on a product with the sole intent of receiving a deposit back. In Michigan, however, SNAP benefits are distributed using Electronic Benefits Transfer – the Bridge Card. This makes tracking suspicious purchases easy, similar to how credit card companies flag suspicious spending patterns.
SNAP cards are accepted only at authorized retailers that sell food.

Retailers are not allowed to accept SNAP for cash or any product that is not food. Though it is a popular talking point, the purchase of controlled substances, such as alcohol and tobacco, is expressly forbidden. Retailers and recipients can face disqualification from the program – and criminal prosecution – for knowingly participating in SNAP fraud schemes.

Although SNAP spending has grown over the past 5 years, the expansion is tied to the lingering effects of the Economic Recession of 2008. Most recipients use the benefits during short periods of difficulty, such as unemployment, and participation in the program ends once income has been increased and financial stability has been achieved. According to USDA research, half of new participants in SNAP leave the program in under 10 months.

Most long-term SNAP recipients are seniors or disabled persons living on fixed income. SNAP recipients are not receiving exorbitant benefits either. For Fiscal Year 2013, the average monthly payment per person on SNAP was $133.08 a month. That’s roughly $1.48 per meal, hardly allowing recipients to buy steak and shrimp dinners. For many, the “S” in SNAP truly is supplemental, and SNAP benefits alone do not cover a month’s worth of groceries.

The SNAP program is tightly regulated and the rules are strictly enforced at both the state and federal level. Combined with low error rates, there is little reason for taxpayers to fear that SNAP is rife with waste and fraud. SNAP is a vital part of the United States’ social safety net and without it, many families, seniors and veterans will face hunger this winter. Congress should keep the facts about the program in mind when it finalizes a farm bill and ensure the program continues to help those in need.