November 22, 2014

USDA Cracks Down On Food Stamp Fraud

The U.S. Department of Agriculture (USDA) is cracking down on food stamp fraud.  The Supplemental Nutrition Assistance Program (SNAP) helps 46 million low income Americans buy food each month. But sometimes benefits aren’t used to buy food for those most in need.

Trading benefits for cash or lying on an application to receive benefits are the two most common examples of SNAP fraud. They will be targeted under new measures announced this week by the USDA which include tougher financial penalties on retailers and new eligibility requirements and tools for states.

“USDA has a zero tolerance policy for SNAP fraud,” Agriculture Under Secretary Kevin Concannon, said in a statement. “These additional measures reaffirm our ongoing commitment to ensuring these dollars are spent as intended–helping millions of people in need get back on solid economic footing.”

Under the new rules, retailers who traffic in benefits can be permanently disqualified from participating in the program and face financial penalties. Previously, the USDA was able to disqualify retailers or fine them, but not both. States must now take specific actions to catch fraud and abuse.

During the third quarter of fiscal year 2012, the USDA fined or temporarily disqualified more than 574 stores for violating program rules and permanently disqualified 1,016 stores that traded benefits for cash or falsified applications. Venues where benefits are often traded, such as Craigslist, Ebay, Facebook and Twitter have been notified of increased enforcement measures. Recently, the USDA has also proposed new state requirements for applicants who request excessive EBT card replacements; increased documentation for high-risk stores.

Here’s some perspective. About 230,000 retailers participate in the SNAP program. And about $700 million, or 1% of the total $75 billion SNAP budget, is estimated to be spent fraudulently each year. The average SNAP benefit is $132 per person per month.

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