Starting in fiscal year 2028, states with high SNAP payment error rates will have to start covering part of their food assistance benefit costs for the first time in the program’s 50-plus-year history. According to Brookings’ analysis of USDA’s newly released FY2025 error rate data, 35 states will owe between 5% and 15% of SNAP benefit costs, while 15 states plus D.C. will still have benefits fully covered by the federal government.
What Changed Under OBBBA
For SNAP’s entire history, the federal government has paid 100% of benefit costs, with states only sharing in administrative costs. The One Big Beautiful Bill Act (OBBBA) changes that structure by tying each state’s benefit cost share directly to its payment error rate (PER) — the rate at which a state either overpays or underpays SNAP recipients.
On June 24, 2026, the USDA released states’ FY2025 payment error rates — the first data point that will actually determine how much, if anything, a state owes starting in FY2028.
How the Cost-Share Tiers Work
| State’s Payment Error Rate | State Share of SNAP Benefits (FY2028) |
|---|---|
| Below 6% | 0% (fully federally funded) |
| 6% – 7.99% | 5% |
| 8% – 9.99% | 10% |
| 10% – 13.32% | 15% |
| Above 13.32% | 0% (temporarily exempt) |
That last row is a deliberate carve-out: OBBBA includes a temporary delay for states whose error rates are unusually high. If a state’s FY2025 error rate is above 13.32%, it’s exempt from paying any share of benefits until FY2029; if its FY2026 rate is above 13.32%, the exemption extends to FY2030. States can also choose to use their FY2026 error rate instead of FY2025 to determine their share, whichever works in their favor.
Which States Are Exempt, and Why
Per the Brookings analysis, 15 states plus D.C. will have SNAP benefits fully covered by the federal government in FY2028 — but for two very different reasons. Nine states qualify because their error rate is below 6%, meaning they administer the program accurately enough to avoid any cost-share. Six states plus D.C. qualify because their error rate is above 13.32% and they fall under the temporary high-error exemption.
That leaves the remaining 35 states facing a real cost increase: 6 states at the 5% tier, 16 states at the 10% tier, and 13 states at the 15% tier, based on the FY2025 data.
Why Error Rates Are Rising, Not Falling
OBBBA doesn’t just change who pays — it also makes it harder for states to lower their error rates going forward. The law cuts the federal share of state SNAP administrative costs in half, from 50% to 25%, while eliminating some program simplifications that previously made eligibility and benefit determinations easier to get right. Brookings notes that added complexity tends to produce more errors, not fewer — meaning the states most exposed to new cost-sharing may have a harder time reducing their error rate in the years ahead.
At least one state, Alabama, has already stated publicly that this cost shift could push it to consider dropping out of the SNAP program entirely — underscoring how significant these percentages are in practice, not just on paper.
What This Means for SNAP Recipients and State Budgets
The Congressional Budget Office has warned that shifting even 5% of SNAP costs onto states could lead some states to drop out of the program altogether, since nearly all states are legally required to balance their budgets every year and lack the federal government’s ability to borrow through a downturn. States that choose to stay in the program and absorb the new costs may need to cut other areas of their budgets — education, health programs, or other services — to cover the difference.
Brookings’ broader research also flags a structural concern: SNAP has historically functioned as an automatic economic stabilizer, expanding participation during downturns when more households qualify and need help. Requiring states to fund a larger share of benefits during exactly the periods when caseloads rise — recessions — could weaken that stabilizing effect just when it’s needed most.
What’s Next
States now have the FY2025 error rate data needed to estimate their FY2028 obligations, and many are expected to begin budgeting for the new cost-share requirement or lobbying to change it before it takes effect. Whether individual states adjust administrative practices to lower their error rates, or instead consider scaling back SNAP participation, will likely vary widely based on each state’s fiscal position.
FAQ
When do states start paying a share of SNAP benefits?
Fiscal year 2028, based on FY2025 (or optionally FY2026) payment error rates.
What is a “payment error rate”?
It measures how often a state either overpays or underpays SNAP benefits to recipients — not fraud specifically, but administrative accuracy in benefit calculations.
Will SNAP recipients get less money because of this change?
The cost-share requirement targets state budgets, not individual benefit amounts directly — but Brookings and CBO both warn that some states may respond by tightening eligibility, cutting other programs, or in extreme cases considering leaving the program, which could affect access indirectly.
Which states are completely exempt from paying a share?
States with FY2025 error rates below 6%, and states with error rates above 13.32% (temporarily, through FY2029 or FY2030 depending on which year’s data they use).