The USDA’s newly released FY 2025 error rate report shows states paid out $10.1 billion in incorrect SNAP benefits last year — and starting in 2027, states will have to start covering part of that bill themselves.
The national number: 10.62%
The national SNAP payment error rate for fiscal year 2025 came in at 10.62%, well above the 6% threshold Congress set as the acceptable ceiling. That figure combines both overpayments (people getting more than they should) and underpayments (people getting less than they’re owed) — the error rate measures accuracy, not fraud.
The good news, such as it is: 10.62% is a modest improvement from FY 2024’s rate. The bad news is that "modest improvement" still leaves nearly every state well above the line where new financial penalties kick in.
Why the threshold suddenly matters
Under the One Big Beautiful Bill Act passed last year, states with an error rate above 6% will, starting October 1, 2027, be required to fund a share of SNAP benefits themselves — 5%, 10%, or 15%, depending on how far over the threshold they land. That’s a first in the program’s history. Until now, the federal government has covered 100% of SNAP benefit costs, with states only sharing administrative expenses.
All but 10 states came in above 6% in this report. That means most states are currently on track to owe money starting in 2027 unless their error rates improve significantly before the FY 2027 numbers are finalized.
What "error" actually means here
It’s worth being precise about what these numbers do and don’t capture. A payment error can be a caseworker miscalculating a household’s income, a change in circumstances that wasn’t updated in time, or paperwork that fell through the cracks — not necessarily anyone trying to cheat the system. Fraud is tracked separately. Conflating the two overstates how much of this $10.1 billion reflects bad actors versus administrative mistakes.
Who’s on the hook, and when
The federal government won’t release the FY 2026 error rates that will actually determine each state’s exact cost share until roughly a year from now. That timing creates a real budgeting headache: states have to write next year’s budgets without knowing what the SNAP bill will look like. Missouri, for example, has already flagged the possibility of owing roughly $150 million based on current trends — a number we cover in more detail separately, since it illustrates just how concrete this abstract "error rate" figure can get for a single state’s finances.
FAQ
Q. Does a high error rate mean the state is committing fraud?
No. Error rates measure payment accuracy — both over- and under-payments caused by administrative mistakes, outdated information, or miscalculations. Fraud is a separate category tracked independently.
Q. When do states actually start paying?
The cost-sharing requirement begins October 1, 2027, based on error rates that haven’t been finalized yet.
Q. Will this affect the benefits I receive?
Not directly and not immediately. The new rule shifts costs to state budgets, not individual benefit amounts — though states facing large new bills may eventually look for ways to tighten administration.