How automated data can help states address new SNAP requirements

The HR 1 legislation, commonly referred to as the One Big Beautiful Bill Act, introduces substantial changes to federal funding and requirements for certain social service programs. Two major shifts involve the Supplemental Nutrition Assistance Program, first in the benefit eligibility determinations space as well as transferring more of the financial burden of program costs to states.

Beginning in Fiscal Year 2027, the legislation reduces the amount that the federal government will pay states for administrative costs associated with operating SNAP to 25% from the current 50%.

This is on top of a major financial shift beginning in FY 2028, when a state's payment error rate will directly impact its financial contribution to the program’s actual benefit costs, a responsibility previously covered by the federal government. This is particularly urgent because the required contribution will be based on error rates from either FY 2025 or FY 2026. To successfully navigate this new reality, states have the opportunity to be proactive in modernizing their systems and strategies, with a clear focus on improving appropriate benefit payments to eligible applicants.

To determine eligibility for SNAP benefits under HR 1, caseworkers must not only verify income, but also, for a portion of the population, determine whether new work requirements are met. The modern workforce, with its rise in independent contractors and gig workers, has made verifying income and employment more challenging in recent years. Traditional, paper-based manual verification methods — sifting through receipts and phone calls to employers — are not only slow and inefficient but also prone to unintentional human error.

This lack of efficiency and error rates now carry a severe financial penalty for states. Beginning in FY 2028, states with a payment error rate above 6% will be required to contribute to the cost of SNAP benefits based on a sliding scale. The pressure is on now, because the specific amount the state will be required to pay will be based on payment error rates reported in either FY 2025 or FY 2026. 

This problem affects most states: in 2024, the last year data is available, only seven out of the 53 states and U.S. territories where SNAP is administered had error rates below the 6% threshold.

Another potential source of concern or unintentional errors lies in ensuring certain benefit applicants meet the new work standards. The work requirement for Able-Bodied Adults Without Dependents has been expanded, now applying to individuals ages 55 through 64, an increase from the previous age of 50. The new rules also narrow the parental exemption, subjecting more parents to work requirements, and remove exemptions that previously applied to other groups. Not only do states face stricter limitations around waiving these work requirements, but the legislation also mandates more frequent eligibility redeterminations.

Strategies for State Preparation

To prepare for these changes and help mitigate budget impacts, state agencies may consider exploring new ways to ensure that eligible applicants receive appropriately sized benefits. HR 1 requires states to lower error rates and be more accountable during their determinations process, which necessitates a more robust method for verifying applicant information. With stipulations for more stringent work requirements and more frequent eligibility redeterminations, caseworkers face a significant administrative burden.

Automated, more current data can help streamline the process, and reduce the need for caseworkers to manually sort through paperwork or contact employers. This proactive approach helps agencies more efficiently, and effectively, cross-reference and verify an applicant’s information, to determine appropriate benefit payments for the eligible applicant before benefits are disbursed, which also helps protect program integrity.

Automating these tasks also helps agencies make faster decisions, so eligible applicants get needed and appropriately sized benefits more quickly. This also frees up caseworkers to spend more time on complex cases and supporting the people they serve. For applicants, these improvements help the process become smoother and could even help reduce their risk of losing benefits due to administrative hurdles, which in turn helps reduce applicant churn and eases the workload for caseworkers.

In addition, states may look to prioritize modernizing and streamlining their legacy IT systems to better support real-time data integration and cross-agency collaboration. This modernization can be beneficial for managing the increased reporting requirements and more frequent eligibility checks mandated by the legislation.

The new SNAP requirements present a significant challenge, but they also offer an opportunity for transformation. By investing in flexible and secure data solutions, states can not only protect their budgets and meet federal mandates but also improve the overall applicant experience. This technology-driven approach streamlines the process, and helps agencies deliver appropriately sized benefits to eligible applicants quickly and effectively during their times of need.

Juan Cole is vice president for government strategy and solutions consulting at Equifax Workforce Solutions.