Lawmakers in 2024 let lapse the authority for states to reimburse food stamp recipients who lost their benefits to fraud. Several lawmakers want to reverse course. In the two years the Agriculture Department had the reimbursement authority, it identified 1.9 million fraudulent transactions using stolen Supplemental Nutrition Assistance Program benefits. Nearly 679,000 households were impacted, and $322.5 million in benefits were reimbursed the second quarter of fiscal 2023 through the first quarter of fiscal 2025, according to the USDA. But the victims now have no available options to reclaim the benefit because the USDA’s SNAP reimbursement program expired after Dec. 20, 2024. The theft is personal to Iowa Republican Rep. Zach Nunn. “This began from a situation in my home state of Iowa, where we had a veteran who had his benefits taken from him,” Nunn said last week. “I literally had to take groceries to him to help get him through the month.” The experience prompted Nunn to introduce a bill in June that would again give states the authority to reimburse SNAP benefits stolen through skimming, cloning or any other unauthorized electronic transfer. His bill would also set civil penalties for theft at twice the value of the benefits, using the penalty money to pay for the reimbursement. “The fraudsters and the scammers are continuing to enfranchise themselves, where, tragically, in too many cases, there's Americans out there who are not getting the SNAP benefits that they deserve,” Nunn said. Recipients are often unaware their benefits have been stolen until they reach the checkout and are left scrambling for alternatives, sometimes having to choose between buying food or paying bills. Rep. Grace Meng, D-N.Y., introduced a similar measure in April to require states to reimburse stolen SNAP money using federal funds. Her nine co-sponsors include three Republicans: Reps. Mike Lawler of New York and Brian Fitzpatrick and Rob Bresnahan Jr., both of Pennsylvania. Nunn’s bill doesn’t have any co-sponsors. SNAP provides benefits to about 42 million people monthly. “The loss of the restoration of stolen benefits has been devastating for folks that have, you know, gone to the grocery store and found all of a sudden they didn't have anything in their SNAP account to pay for the food that they need. And that's usually how folks find out,” said Ed Bolen, the director of SNAP state strategies for the Center on Budget and Policy Priorities. “It's like $6.20 a day on average for folks, but it really makes a difference for them to be able to buy food for their families. To suddenly not have that is devastating,” he said. Congress used a 2023 appropriations law to allow states to use federal funds to reimburse stolen benefits. The program was extended once by a continuing resolution. Democrats pushed for a four-year extension a year ago, but Congress let the authorization lapse after Dec. 20, 2024. Gina Plata-Nino, the SNAP director at the Food and Research and Action Center, a nonprofit organization, said not having a mechanism in place to reimburse stolen benefits "defeats the purpose of the [SNAP] program.” “This is supposed to be an anti-hunger program,” Plata-Nino said. “If you don't get those funds, then it's frustrating its purpose.” Skimming, cloning and phishing Fraudsters cash out SNAP benefits between the first and 10th of the month, often through bulk purchases of easily sold items, according to the FBI. Skimming occurs when fraudsters install devices inside of card readers such as ATMs, capturing electronic benefit card data and PIN entries. Using that information, they then make fake cards known as clones. Phishing involves the fraudsters posing as officials and using emails, texts or phone calls to get cardholders to disclose information. “We spoke to the chairman of the Ag Committee. We are hoping to bring that forward as part of an overall package here. As we start to mark up this year's farm bill, I think this is a priority issue,” Nunn said. House Agriculture Chairman Glenn "GT" Thompson, R-Pa., wouldn’t say whether reimbursement legislation will be attached to the next farm bill. He said before the holiday recess that he plans to mark up the bill in January. “Obviously, we're taking everything under advisement as we prepare for ‘Farm Bill 2.0,’ so I don't really have a status update to where it is,” he said. Chip technology But Thompson also said states need to do more to prevent theft. Most EBT cards have magnetic strips that make them susceptible to skimming. Chip-enabled cards are generally safer to use because there’s fewer devices that can steal chip data, according to the FBI. “Obviously, states need to do a better job as they implement the SNAP program to prevent theft. They have the tools to do that now. States have the authority to use innovation,” Thompson said as he pulled his credit card out of his worn brown leather wallet, pointing to the chip. “To use basically what we all carry on our credit cards, which is chip technology, and chip technology would go a long ways of reducing that.” Only California has upgraded SNAP EBT cards to chip technology. The USDA says six states have chip card projects in progress: Oklahoma, Alabama, Virginia, Maryland, New Jersey and Massachusetts. “We're looking at both sides of it. I don't know where we're going to wind up on it. I will say the states already have the authority under their administration to take that step,” Thompson said. Plata-Nino and Bolen both said the July reconciliation law would make it hard for states and territories to afford a switch to chip-enabled cards. The bill cut the federal share for SNAP administrative costs from 50 percent to 25 percent starting in fiscal 2027. “There are still some conversations with some states engaging in possibly some chip technology, but considering what just happened with HR 1, some states are reconsidering if that's the right path,” Plata-Nino said. Bolen said Congress should do more to aid states in the transition to chip, including pushing for regulations and providing funds, but the GOP doesn't appear receptive to that message. “How hard is it? How expensive really is it to transition to chip cards? Everybody else is doing it. You're not going to get a credit card today without a chip,” Thompson said. California’s 2023-24 spending plan designated $50 million to improve EBT card technology and security, including the issuance of chip and tap-to-pay technology.
