President Donald Trump's new SNAP accountability law will force states with high payment error rates to cover a share of food assistance costs, but Iowa is avoiding the financial burden entirely. Thanks to a low administrative error rate, Iowa will not face the new penalties set to begin in October 2027, while dozens of other states scramble to find millions in their budgets.
How does the new SNAP cost-sharing rule work?
The legislation, recently signed by President Trump, requires states with high SNAP payment error rates to eventually cover a share of benefits themselves. Currently, the federal government covers the full cost of SNAP benefits, which provides monthly financial assistance to help eligible low-income Americans buy groceries.
A SNAP error rate measures the percentage of benefits incorrectly issued, whether recipients receive too much or too little, largely due to administrative failures. Under the new law, states that fail to manage their programs efficiently will face a sliding scale of financial penalties starting in October 2027.
- States with error rates between 6% and 8% must cover 5% of benefit costs.
- States at 8% to 10% must cover 10% of benefit costs.
- States above 10% must cover 15% of benefit costs.
The cost-sharing rule is designed to hold states accountable for administrative mistakes while generating federal savings to help offset new tax cuts.
Why does Iowa avoid the new SNAP penalties?
Iowa stands out as a model of administrative efficiency. The USDA's newly released error rates for fiscal year 2025 determine which states face future costs, and Iowa's rate falls safely below the 6% threshold. Nine states in total will avoid the new financial burden because their error rates remain under the cutoff.
South Dakota recorded the lowest rate at roughly 2.5%, while Nebraska narrowly escaped at 5.9%. Other states below the cutoff include Idaho, Kentucky, Vermont, Utah, Wisconsin, and Wyoming. For Iowa taxpayers, this means state leaders will not have to shift money away from priorities like public schools, law enforcement, or mental health services to cover SNAP mistakes.
What happens to states with high error rates?
States with terrible error rates face difficult choices. They will have to shift money away from essential services, tighten eligibility rules, or potentially leave the decades-old federal food assistance program altogether. Missouri, which reported an 8.7% error rate last year, could owe 10% of its SNAP benefit costs if the rate does not improve. Based on 2024 figures showing Missouri residents received about $1.5 billion in SNAP benefits, the state's annual share could reach roughly $150 million, which is more than the operating budgets of several state prisons.
There are billions of dollars that are at stake that states will have to find the money to be able to pay if they want to continue to operate a SNAP program, said Chloe Green, assistant director for policy at the American Public Human Services Association.
Some of the states with the worst error rates will get temporary relief. States exceeding a 13.34% error rate last year, including Alaska at over 23%, as well as Delaware, Georgia, Illinois, New Mexico, Oregon, and the District of Columbia, will have their cost-sharing requirements delayed until at least fiscal year 2029. Further delays may be available if their 2026 error rates remain high.
How is the USDA cracking down on SNAP accountability?
Agriculture Secretary Brooke Rollins criticized current error rates, making it clear that the administration expects better management from state governments.
These payment error rates are further proof that state accountability is severely lacking in SNAP.
A recent survey of state SNAP agencies found that while most are investigating the causes behind payment mistakes, many are also preparing for possible budget cuts. More than a quarter of states said they may tighten eligibility rules, while four states indicated they are considering leaving SNAP altogether.
The push for accountability follows a significant drop in enrollment. Preliminary USDA figures show more than 37 million people received SNAP benefits in March, down 11% from the previous year. The decline follows the expansion of work, volunteer, and job training requirements for many adult recipients, enacted last July.
What is a SNAP payment error rate?
A SNAP payment error rate measures the percentage of benefits incorrectly issued by a state. This includes both overpayments and underpayments, which usually happen because of administrative failures and poor oversight rather than recipient fraud.
When does the new SNAP cost-sharing rule take effect?
The new cost-sharing rule begins in October 2027. States will use either their fiscal year 2025 or 2026 error rates to determine if they owe a share of the benefit costs.
Will Iowa have to pay SNAP penalties under the new law?
No, Iowa will not have to pay penalties. Iowa's administrative error rate remains below the 6% threshold set by the federal government, meaning the state avoids the new financial burden entirely.
