Virginia outlines strategy to cut SNAP error rate as federal changes shift costs to states

RICHMOND — Virginia’s Department of Social Services briefed legislators on federal changes to the Supplemental Nutrition Assistance Program and a statewide effort to reduce SNAP payment errors after the 2025 federal reconciliation bill narrowed eligibility and shifted more administrative costs to states.

Acting VDSS Commissioner Erskine told the joint subcommittee that the federal law commonly called HR1 changes non‑citizen eligibility categories, tightens work requirements for able‑bodied adults without dependents and limits certain heat‑and‑eat program eligibility. The law also eliminates funding for the SNAP Education (SNAP‑Ed) grant program and phases a larger share of administrative costs to states: from a 50/50 federal‑state split to a 25% federal share and 75% state share beginning Oct. 1, 2026.

Why it matters: SNAP benefits are federally funded, but a higher state share of administrative costs and new penalty rules tied to the program’s quality control (QC) error rate could cost Virginia millions if error rates remain high.

What VDSS reported: Erskine said Virginia’s benefits (the federally funded benefit dollars) total roughly $1.8 billion annually and that administrative costs were $360 million in 2024. Under the new QC penalty schedule, if the state’s error rate remains above 10% the federal contribution to administrative costs could be reduced; VDSS said an error rate above 10% would trigger a 15% state share on a sliding scale. Erskine said a substantial share of the error rate historically has been overpayments (about 9.5 percentage points of a reported 11.5% error rate cited in testimony).

How errors occur and how they are audited: VDSS described errors as improper payments resulting from processing or data errors by local departments, missing household updates, incorrect income or household composition reporting and other non‑fraud mistakes. Data sources for the federal QC reviews are sampled after benefit issuance; federal reviews pick random case samples and calculate an annual error rate that determines the state’s penalty share. VDSS officials emphasized that QC results lag behind transactions and that the state will need to prevent errors proactively rather than react after federal sampling.

State strategy to reduce errors: VDSS listed a multi‑pronged plan that includes: - Directive 13 (an administration directive) to develop incentives and penalties for local departments to adopt best practices and to require core training for benefit staff; - Targeted reviews and technical assistance in high‑caseload local departments (a “Big 20” initiative) and support for understaffed smaller localities; - Technology upgrades, including vendor procurement to provide instant policy guidance, improved automation and possible AI tools to detect anomalies before benefits are issued; - Revision of guidance, micro‑trainings and mandatory core training for staff who determine or supervise SNAP eligibility; and - A request to the federal government for quality‑control waivers and a standard utility allowance to reduce inadvertent errors tied to household‑reported expenses.

Lawmakers’ concerns: Subcommittee members pressed VDSS on why error rates have been difficult to reduce, the practical effect of gig‑economy income on verification, and the burden that increased state administrative costs would place on local departments that process applications. VDSS said the state will pursue vendor support, public‑private partnerships and targeted funding to local departments to sustain best practices.

Numbers cited in testimony: - Annual SNAP benefits: about $1.8 billion (federally funded). - VDSS administrative costs (2024): $360 million; projected incremental state share if the federal Medicaid/administrative split moves to 75/25 could add approximately $90 million for the Commonwealth. - Recent QC error rate cited in testimony: roughly 11.5% overall, with approximately 9.5% from overpayments; VDSS said historical rates have sometimes been lower in earlier periods but that recent years have been higher.

Next steps: VDSS said it has engaged consultants, requested carry‑over funds to hire a national vendor to review best practices, and initiated targeted oversight and training. The department asked for state and local cooperation to deploy technology and training rapidly because federal QC penalties and the new work/eligibility rules will take effect in coming fiscal years.

Ending: VDSS officials said they would provide follow‑up details on waiver requests and vendor work and that the state intends to prioritize efforts that reduce errors before federal QC sampling.