Hunger is a global issue, and the situation in the US makes no exception. As part of a prevention strategy, the government has established the Supplemental Nutrition Assistance Program or SNAP.
The program distributes benefits to everyone in need, known as food stamps. The process happens through a digital system — the Electronic Benefits Transfer (EBT). Food stamps have become the country’s safety net against hunger and food insecurity, especially during the pandemic.
However, not everyone has the same positive intentions when utilizing these benefits. The latest food stamp fraud statistics reveal a significant increase in malpractice when it comes to distribution.
To find out more about this topic, here is a complete list of facts about the current predicament of food stamps abuse in the US.
Stats and Facts About Food Stamp Abuse (Editor’s Choice)
- The cost of trafficked food stamps is between 1 and $4.7 billion annually
- One in ten retailers is exploiting food stamp benefits
- 90% of small retail shops are targets for retailer trafficking
- New York and California have the most food stamp investigations
- Food stamp investigations have increased by 30%
- Taxpayers in Florida have lost $12 million due to food stamp exploitation
Frequency of Welfare Fraud Statistics
Benefit programs such as SNAP contribute to the general welfare of the country. Unfortunately, some people unrightfully take advantage of the initiative.
Here are some facts about the frequency of fraud cases in the US food stamp program and the costs of preventing such actions.
1. USDA spends around $5 million every year to fight food stamp scams.
Cases of individuals extorting food stamp benefits have become so common, the authorities have taken various steps to prevent them.
A recent news report reveals the US Department of Agriculture invests nearly $5 million from federal taxpayers’ money every year to investigate food stamp fraud cases.
2. According to a food stamp fraud report, the cost of trafficked benefits is between $1 and $4.7 billion every year.
Billions of dollars are dedicated to satisfying the massive demand for food stamps annually. Unfortunately, a significant percentage does not go to the determined recipients of SNAP.
The Food and Nutrition Service estimates that up to $4.7 billion are stolen from the program every year.
3. Food stamp abuse facts reveal that over one in ten retailers are likely committing fraud.
Fraud cases are not just an individual effort. Some retail stores registered in SNAP find loopholes to exploit, despite the program’s prevention protocols. Retailers might sell ineligible items and misrepresent information to gain benefits for themselves.
4. 90% of small business stores are targets for retailer trafficking.
Authorities often look at the most likely targets to determine how to prevent fraud cases from increasing. Research shows that the welfare fraud percentage in small retail businesses is very high.
5. 40% of large stores are among the main retailer trafficking targets.
Food stamp fraud statistics reveal that primary retail stores and supermarkets are also part of the scheme. Even restaurants in some states that provide hot meals for food stamp recipients are investigated for malpractice.
6. Investigations of food stamp fraud cases have increased by over 30% in the last few years.
The depth of this issue has led to a surge of inspections focused on food stamps abuse. According to most recent statistics, investigations have risen by more than a third, compared to 2012, and are likely to increase even more.
7. Over one in five US households experience food insecurity.
Regardless of the food stamp abuse statistics, there is an actual need for the program. Food stamp distribution is one of the primary US solutions to national hunger.
Food Stamp Abuse Statistics by State
The cost and impact of deception in the food stamp program vary in every state. Let’s take a look into more detailed facts about the demand and irregularities in the distribution of food stamps across the US.
8. New York and California are the US states with the highest percentage of welfare fraud investigations.
New York and California are the two states with the highest percentage of food stamp investigations. Almost half of the country’s cases are from New York.
9. Taxpayers in Florida lost over $12 million due to food stamp abuse in 2018.
(Source: Florida Daily)
Maintaining benefits programs like SNAP requires tax money. Around 6% of your tax goes to food stamps, energy assistance, and other income security programs.
Misusing funds can have a significantly negative effect on the whole state. An example is Florida, where taxpayers lost over $12 million in a year due to food stamp fraud.
10. Illinois has canceled benefits for over 150,000 SNAP participants due to ineligibility, according to EBT fraud statistics.
Not everyone can be eligible for the food stamp program, however, social workers lack the time and resources to check every application adequately.
An example of such irregularities is Illinois. SNAP canceled food stamp benefits for over 150,000 people in a year after an additional investigation deemed them ineligible. This action saved up to $70 million.
11. SNAP fraud statistics show that around 20% of those who were denied benefits in Illinois re-applied.
Because of multiple changes in the system, SNAP applicants had a short period to provide the necessary information for their eligibility checks. That led to a failure in response and consequential benefit cancellations. Fortunately, 20% of them were able to re-apply for the benefits program.
12. SNAP has investigated only five out of nearly 51,000 reported cases in Missouri.
(Source: AP News)
Due to underdeveloped investigation processes, only five of 51,000 reported cases were opened for further action. The reason is the lack of enough information to continue the research on the alerts.
SNAP Fraud Rate and Expenses
SNAP aims to help people in need, however, the success of its mission and the social perception of its work might be two very different things. The following stats will show you some interesting information on the fraud rates and the initiative’s costs.
13. Less than half of the US adults consider SNAP as a trustworthy benefit program.
The SNAP fraud stats have become a public concern. With millions of people depending on this nationwide project, only 47% of them actually believe in the way SNAP operates.
For comparison, 57% consider Medicare trustworthy.
14. SNAP’s expenses have increased by $2 billion per month to cover the effect of the pandemic.
The pandemic caused the hunger and food insecurity rates to go higher than ever. In response, SNAP has increased its expenses by $2 billion monthly to ensure fair distribution and decrease the food stamp fraud rate.
15. Congress should increase SNAP benefits by 15% in response to the general rate of food insecurity and food stamp fraud.
Despite the additional effort, authorities have concluded that it might not be enough. As more households become financially unstable due to the pandemic, putting food on the table is becoming an even more significant issue.
According to a statistical study, the US Congress should increase the nationwide food stamp benefits by at least 15% to cover every family’s needs.
16. 14 out of 10,000 households involved in SNAP are guilty of food stamp abuse.
These numbers show that intentional fraud regarding the food stamp benefit is rarely happening. The detailed application process is ensuring fair distribution based on elaborate background checks.
17. Welfare fraud statistics show that 59% of US adults believe that misrepresenting information in SNAP applications is a common occurrence.
As a consequence of the growing rate of fraudulent cases, the general public’s opinion of the benefit programs is unfavorable — over half of the US adults think that fraud is common in SNAP applications.
18. The food stamp error rate for SNAP is estimated to be 3.7%.
The high demand for the benefit means various administrative processes are delayed, and errors are becoming more prevalent. Food stamp fraud stats estimate the error rate in SNAP to be nearly 4%.
19. EBT fraud statistics reveal that over 320,000 retailers participate in SNAP and are often a subject of inspection.
(Source: FSN, USDA)
Aside from households, retailers often make up a significant part of the SNAP participants’ list. All of these participants are analyzed routinely by FNS to detect and penalize fraudulent retailers.
20. The highest ever payment accuracy rate of SNAP was 96.58% in 2012.
Due to the risk of abuse of food stamps, the authorities have cooperated to improve the level of integrity of SNAP’s processes. One of those collaborative efforts is known as the SNAP Stewardship Solutions Project.
The ongoing strategy aims to ensure the correct administration of food stamp benefits. Fortunately, SNAP’s payment accuracy rate peaked at over 96% since the project began, marking it as the highest ever achieved.
The issue of hunger and food insecurity has become non-dismissible in the US, leading to the SNAP establishment. A significant number of households and retailers, however, take unrightful advantage of the program. They either sell ineligible items, misrepresent data, or lie in the application process.
Current food stamp fraud statistics have revealed that not only abuse cases are on the rise, but the percentage of families reliant on the program. SNAP supports approximately 38 million residents in the US, and the number is expected to increase as an aftermath of the pandemic.
In response to this nationwide demand, authorities have delivered multiple plans to ensure quality and fair service for every household in need. Examples are the increasing funds for fraud investigations, mobile food access, and further checks on SNAP applicants.
Frequently Asked Questions
Can you go to jail for food stamp fraud?
As with every illegal act, a conviction for food stamp abuse can have severe repercussions. Depending on the circumstance, those found guilty are suspended from the SNAP and could even go to jail.
The punishment for food stamp fraud cases depends on the extent of the committed act. In many cases, convicted individuals are financially penalized, plus an incarceration period. Having a criminal record can have long-term consequences, such as unemployment.
What percentage of welfare recipients are frauds?
The authorities have addressed the illegal use of benefits systems as a serious issue. Fraud cases account for between 3 to 5% of welfare recipients.
USDA reportedly spends $5 million to fight welfare fraud annually.
What state uses the most food stamps?
A state’s demand for food stamps is determined by its population size and the economy’s condition. According to statistics on food stamp abuse and usage, 10% of California’s population are registered participants in SNAP and is the state with the most fraud cases.
What is the welfare fraud rate for SNAP?
Thanks to strategies, such as the use of ETB cards, the number of fraud cases in SNAP can be limited. In a published study about food stamp fraud statistics, SNAP’s average fraud rate currently amounts to at least 0.9%.
While it is a seemingly small percentage, SNAP’s total costs can total up to billions. One fraud case can lead to a massive loss for the organization and the taxpayers.