DHS Family Investment Administration budget hearing spotlights rising caseloads, benefit denials and a voluntary civil‑rights settlement

The Department of Human Services’ Family Investment Administration (FIA) appeared before the Health and Social Services Subcommittee for its fiscal review, where legislative staff (DLS) raised concerns about rising applications and high denial and closure rates for cash and disability‑related benefits, while DHS described program expansions including the Sunbucks summer nutrition program and measures to replace stolen SNAP benefits.

DLS analyst Tanya Zimmerman opened the hearing with an overview of the agency allowance and performance metrics, saying, “the budget decreases by about 50,000,000 or 1.8%,” but noting that excluding $72,000,000 in deficiency appropriations tied to fiscal 2024 expenses the allowance would increase. Zimmerman told the panel that applications rose across SNAP, TCA and TDAP (about 33% higher in calendar 2024 than pre‑COVID) and that denial rates for TCA and TDAP are substantially higher than for SNAP — “for TCA they’re generally over 70%,” and TDAP rates have been “at or above 80% since September 2023.”

In response DHS Principal Deputy Secretary Carnitra White and FIA Executive Director Augustine Nabaganamani described program operations and corrective steps. White highlighted the Sunbucks rollout: “Sunbucks is now Maryland's largest investment in the fight against childhood summer hunger,” saying the program issued more than $71,500,000 in summer nutrition benefits to more than 594,000 students in 2024 and that the department hired approximately 80 staff to stand it up in 52 days. White also reported replacement of stolen benefits: $35,200,000 reimbursed to nearly 61,000 households since March 2023.

Key issues raised by DLS and agency responses

Applications, processing times and denials: DLS reported SNAP applications are processed faster owing to a seven‑day expedited SNAP requirement; TCA and TDAP processing lags typically by about 11–17 days. DLS asked DHS to explain recent increases in denials related to verifications and SSI‑related factors for TDAP; DHS said it contracts with Maximus to help TDAP applicants pursue SSI benefits and that applicants are informed of the free service.

Child support non‑cooperation and TCA denials: DLS noted denials tied to non‑cooperation with child support rose to about 21% in August 2024 and have remained near 20%. DHS told the committee that federal requirements obligate cooperation with child support, but that some households are eligible for exemptions (for example domestic violence survivors or parents living in countries without enforcement agreements). Committee members and witnesses flagged concerns that children in low‑income families can be cut off when custodial parents face barriers to complying with child support documentation or paternity processes.

Time‑limit closures and ABOD SNAP enforcement: DLS highlighted increases in case closures tied to TANF time limits and able‑bodied adults without dependents (ABOD) SNAP time limits. Zimmerman said nearly 6,661 TCA cases had been closed for hitting a five‑year TANF time limit through October (with a December 2023 spike of about 2,100 closures in one month), and DHS confirmed it began closing cases as audits and eligibility reviews required enforcement. For ABOD SNAP requirements, DHS reported roughly 18,500 SNAP cases were closed between May and October 2024 when exemptions or discretionary exemptions ran out; DHS attributed some reporting errors to households moving between exempt and non‑exempt jurisdictions.

Voluntary resolution agreement with OCR: DLS summarized a voluntary resolution agreement with the U.S. Department of Health and Human Services Office for Civil Rights (effective date DHS reported as 08/13/2024) finding systemic problems in disability assessments and accommodations. Zimmerman and committee members pressed DHS about delayed notifications and required postings. DHS acknowledged delays in posting and in mailing required notices, saying the delay was due to staffing turnover and that it expects to send notifications and complete the work, estimating roughly 11,000 individuals may receive notices tied to prior case closures. DHS estimated about $146,000 for initial system modifications tied to the agreement and said it plans to seek federal matching funds through an Advanced Planning Document.

Budget alignment, proposed deficiencies and DLS recommendations: DLS identified proposed deficiencies totaling about $113,000,000 (roughly $72,000,000 related to fiscal 2024 costs) and recommended several funding adjustments, including a proposed $200,000,000 reduction in federal SNAP funds to better align with projected caseloads (DLS cited the FY26 allowance supporting about 452,000 SNAP cases while the average through December 2024 was about 382,000). DHS said it does not concur with the recommended SNAP reduction and supports the Governor’s introduced budget, citing federal funding volatility and the department’s preference to retain flexibility.

Sunbucks administrative funds and staffing: DLS recommended reducing Sunbucks administrative funding by $2,200,000 based on vacancy and position questions and moving remaining funds to the director’s office. DHS explained it created 100 contractual full‑time equivalents to stand up the program rapidly (about 80 were filled by January 2025), said the program’s FY25 budget assumed about 500,000 recipients and that actual scale reached about 600,000, and warned cutting state administrative funding would also reduce the federal 1:1 match and could leave federal administrative funds unclaimed.

Refugee and asylee costs: DLS identified roughly $18,000,000 of proposed deficiency-related spending for the Maryland Office for Refugees and Asylees tied to rising arrivals. Committee members asked DHS about contingency plans if federal resettlement funding changed; DHS said it was monitoring federal developments and that the department’s budget is roughly 80% federally funded.

TANF reserves and spending priorities: Witnesses from advocacy groups urged lawmakers to prioritize TANF funds for cash assistance and noted Maryland’s use of TANF for child welfare and other services has limited direct cash benefits for families. Speakers noted Maryland has high rates of deep poverty and advocated for higher TCA benefit levels.

Agency and DLS follow‑up: DLS recommended multiple reporting requirements and some fund restrictions pending additional information (on repeat audit findings, application processing times, case closures, Sunbucks administrative spending, and VRA notifications and appeals). DHS generally agreed to provide requested reports but objected to several proposed funding restrictions, saying some restrictions would impede implementation and claiming progress resolving audit findings.

Public testimony and additional remarks: In a second panel, stakeholders including Maryland Family Network, Maryland Center on Economic Policy, AFSCME Local 112 and Homeless Persons Representation Project urged preserving or increasing direct cash supports, flagged high TCA denial and closure rates tied to child support cooperation and work requirements, and urged speedier recalculation of TCA/TDAP benefit updates to meet the Maryland minimum living level.

What happens next: DLS and DHS will submit additional reports and responses requested by the committee; DHS requested some reporting deadlines be aligned with federal reporting cycles. The subcommittee did not take final budget votes at the hearing; members indicated follow‑up questions and pledged additional conversations with DHS staff on child support compliance, OCR settlement implementation, Sunbucks administration and refugee funding contingencies.