Food Stamps' Extremely Rare But Expensive Problem

Some people get food stamps from multiple states, costing the government millions of dollars. A new tracking system can cut those costs.
by | July 12, 2016
(FlickrCC/Paul Sableman)

In any given month of 2014, at least 2,000 households in the Southeastern U.S. were getting food stamps from more than one state. Public money spent on so-called “dual participants” represents millions in unintended costs, which is why government officials have long looked for a way to prevent them.

Now they might have found it.

Five states recently tested a new data-sharing system that lets them check to see whether applicants are already getting food stamps somewhere else. The system, which is updated daily and called the National Accuracy Clearinghouse, saved an estimated $5.6 million in one year.

If someone is found to be participating in the Supplemental Nutrition Assistance Program (SNAP) while trying to apply to it elsewhere, a caseworker is notified and conducts an investigation. Most of the time, people continue to receive their benefits but only in the state where they're actually eligible.

The clearinghouse appears to be a modest success that could expand to more states and more welfare programs, such as Medicaid. After joining the system, states saw dramatic declines in the numbers of dual participants -- ranging from 81 percent in Mississippi to 27 percent in Florida, according to a recent report released by the U.S. Department of Agriculture (USDA).

The report also reveals that dual participation for food stamps is a rare problem. No more than two-tenths of 1 percent of SNAP users were found to be dual participants. But because so many people get food stamps  -- more than 45 million nationwide -- even a fraction of one percent of all recipients translates into millions of dollars in potential savings.

“It’s not chump change by any stretch,” said Paul Lefkowitz, a project director with Public Consulting Group, the firm that conducted the research on dual participants for the USDA.

One question the report did not answer is why people apply for SNAP in more than one state. According to Lefkowitz, they weren’t able to quantify how much of the duplication came as a result of intentional gaming of the system. He did, however, come across anecdotal information suggesting that at least some of the dual participation was due to human error.

For example, he frequently heard about children who lived with a parent in one state during the school year but with grandparents in another state during the summer. When the families sought SNAP benefits for their kids in the second state, it showed up as dual participation. In cases like these, the children would continue to receive benefits but only in the state where they were living at the time.  

“To call it out-and-out fraud,” he said, “is probably not an accurate characterization.”

As with almost anything in fraud prevention, the clearinghouse costs money. States that consider using it will have to weigh whether they’ll save enough to make it worthwhile. In the five pilot states, the initial implementation costs ranged from $29,000 in Alabama to $330,000 in Mississippi. After that, the monthly expenses ranged from $5,500 to $22,000, while the monthly savings ranged from $40,000 to $160,000.

The five pilot states -- Alabama, Florida, Georgia, Louisiana and Mississippi -- are still using the system, and it’s all but certain that it will spread. Six states are already undergoing free “proof of concept” testing to see how many dual participants the system can find. Another 29 states are in contact with Mississippi and Lexis Nexis Risk Solutions, the contractor that built the system, about testing in the future.

If every state participated, Public Consulting Group estimates that the federal government could save more than $114 million a year.