SNAP: Overly Abused or Simply Misunderstood?
Food Benefit History in the United States
The Supplemental Nutrition Assistance Program (SNAP) provides nutrition and hunger assistance to eligible low-income families and individuals in the United States. This program exists under the United States Department of Agriculture (USDA), which runs other food need based programs such as Women, Infants, and Children (WIC) and the National School Lunch Program (NSLP).
SNAP costs are shared by both the federal government and state governments, with the name of the program and the name of the card itself, differing from state to state (SNAP Names). The first food stamp program began in 1939, allowing individuals to purchase Orange Stamps which were equal in value to their normal food expenses. For every $1 spent on Orange Stamps, those individuals received $0.50 in Blue Stamps, which could be used to purchase any surplus food as determined by the government (SNAP History). This program continued in some capacity until ending in 1943 due to an effective end to unemployment and dwindling food surpluses from high war-time activity.
The next program to exist began in 1961 as a pilot which led to President Lyndon Johnson signing the Food
Stamp Act of 1964. From then on, the program as it is known today was developed. Electronic Benefits Transfer (EBT) is the current card based system, which loads government funds directly to a card the recipient can use for groceries, which did not come about until 1984, when stamps began to be phased out. The most recent significant change to SNAP came under the Agricultural Act of 2014 which, among other things, sought to look at different ways to help needy families. Initiatives included pilot programs for allowing mobile devices to load SNAP benefits and testing home food deliveries to disadvantaged persons. The number of SNAP recipients by year, as a percentage of the overall population, is shown in Figure 1.
Figure 1: SNAP Recipients by Year in the USA
The jump in 2009 can be attributed to the Great Recession. Also, the average amount of money distributed to each recipient, adjusted for inflation by year (Figure 2), shows an interesting trend (Using SNAP Data and Gov Inflation Calc)
Figure 2: Dollar Amounts Distributed by SNAP per Year per Person (adjusted for inflation)
This figure shows that the amount of money distributed on average to a SNAP Recipient has stayed relatively consistent since the mid-1970s with a jump after the Great Recession, which has since come down to the more consistent historical range.
Current Florida-Specific Food Benefit Information
According to the Department of Children and Families (DCF), which oversees ACCESS Florida, Florida’s SNAP program, the eligibility requirements for food assistance benefits (Eligibility) are as follows:
Beneficiaries must be able to prove they are the person they claim to be.
18 to 50 year olds, who are not pregnant and have no dependent children, can only get food assistance for 3 months of a 3 year period if they are not a part of the work force.
Household income must be equal to or less than 200% of the Federal Poverty Level, with some exceptions.
Beneficiaries must be a Florida residents.
Beneficiaries must be US citizens or hold qualified non-citizen status.
Beneficiaries must have a social security number or proof of application.
Beneficiaries must work with the State’s child support enforcement agency in some situations.
Beneficiaries must have less than a certain amount of assets (a range of $2,250 to $3,250 depending on situation).
Beneficiaries must report to the State changes in monthly income or time spent working.
Ineligibility can result from a variety of issues such as conviction of drug trafficking and being without qualified status. Once in the program, participants can purchase breads, cereals, fruits, vegetables, meats, seeds, and more with the EBT card. The cards may not be used to buy things such as pet food, soap, paper products, basic household supplies, alcohol, tobacco, medicine, hot food, and more. If attempted to purchase, these items automatically do not ring up for an EBT card swipe.
According to the Kaiser Family Foundation (KFF), the average Floridian receiving SNAP benefits gets $125.84 (as of 2016) per month, which equates to approximately $29.04 per week per person. Broken down by meal, assuming three meals a day, that individual will have $1.38 per meal subsidized by the program. The USDA’s most recent monthly food at home report (Cost at Home) found that an individual male between 19 and 50 years old, on a moderate-cost nutritious diet, can expect to pay $69.30 a week on groceries, coming out to $3.30 a meal, assuming three meals per day. The Economic Policy Institute (using adjusted USDA numbers) found that an individual adult in central Florida can expect to pay $271 per month on groceries, which equates to $63.02 per week, or $3 per meal. This means that typically, a SNAP recipient in Florida can expect to see 46% of their individual meal cost subsidized.
How Fraud is Committed in Florida
When it comes to SNAP and EBT fraud, Florida has the unfortunate title of being home to, “the largest combined financial fraud loss for a food stamp trafficking takedown in history” according to the Justice Department. In 2017, a group of retail owners in south Florida were caught committing over $20 million in food assistance fraud (Food Fraud in Florida). Here is how they did it: a customer would walk in to one of the convenience stores that were part of the scheme. At the point of purchase, the store clerk would swipe the person’s EBT card and charge them more than the value for the items they grabbed. The store clerk would then pocket the extra money, unbeknownst to the EBT user. Another example comes from Jacksonville (Jax Fraud) where authorities say convenience store clerks would allow an EBT user to swipe their card for an amount such as $500 and the clerk would give them $250 in cash, a rate of $0.50 on the dollar. Four of these stores in that specific case defrauded tax payers of over $3.7 Million.
These two examples of fraud, amongst others, are listed below.
Lying on the application process, either as an individual looking for SNAP benefits, or as a grocer retailer looking to be able to receive EBT card users’ business.
An individual paying cash for an EBT card from a recipient, so the EBT user has some value in cash, typically of equal or lesser value, to use for anything.
As a cashier, charging EBT user for groceries, but giving them equally valued amount of non-EBT items such as cigarettes or alcohol.
Using an EBT card that isn’t meant to benefit you.
Cashiers charging customers more than the price of the items they intend to buy and pocketing the extra cash without the customer noticing
Common Food Fraud Debates and Other States Experiments
With high profile fraud cases occurring in convenience stores, one may think to only allow EBT usage at large chain grocery stores. The problem with this is that some convenience stores rely on honest EBT sales to stay in business. Convenience stores are also much more available to folks in low income areas, whereas grocery stores may require some form of transportation just to get to. Approximately 6% of all EBT sales are at convenience stores (Store Sales EBT) nationwide, and these smaller convenience stores make up over 80% of all total EBT-accepting retailers.
Remediating fraud with an action such as placing a photo on an EBT card is considered from time to time to be an effective method against EBT fraud. The issue with this is that it costs much more to issue EBT cards with photos than without. In Pennsylvania, their agency found that to put photos on their EBT users’ cards would cost $8 per card versus $0.23 a card with no photo. Also, all members of a SNAP benefit household must be able to use the EBT card in any EBT-accepting store. SNAP allows for anyone, even individuals who aren’t related or financially tied, to benefit from one household SNAP user if they live in the same dwelling (Photo EBT) and were included in the application process. It is generally assumed that knowing the PIN is enough to prove you are a household resident from a cashier perspective. As a child, I used to go to the grocery store with a friend when we were 14 and he would use his mother’s EBT card to purchase beverages and food items to bring back home. His mother was unable to get to the store herself at times, so he would do it for her.
As a 16-year-old, I worked for a retailer that accepted EBT cards and not once do I recall ever noticing if someone had an EBT card or a regular Debit Card since they all looked the same to me. When it came to ensuring the person using the card was supposed to be using it, knowing the pin was enough to satisfy, especially when the line was 10 people deep in the aisle. Even in my family, I used my mother’s debit card at grocery stores all the time. Not once was I asked for an ID, knowing the pin protected me from any scrutiny. Other USDA programs like WIC have very stringent rules and issue coupons that take a long time to process in line, which usually makes non-WIC users jump out of the line because they would rather not wait for that one customer’s payment to process. As a cashier, I could tell WIC users were sometimes embarrassed by the delays they were unintentionally causing. If a state requires a photo on the EBT card or requires users to show photo ID with the card, it is unlikely that retail clerks will consistently check IDs, given the way debit cards are currently treated. Also, if ID was required for EBT users, every person in that household may need an ID, and that burdening cost would likely fall on the already financially struggling family.
Massachusetts experimented with photos on EBT cards previously. Mitt Romney (R), Governor of Massachusetts in 2004, ended the photo ID requirements for SNAP recipients in the state for these reasons:
Low staff levels to administer photo EBT cards.
The cost of equipping offices with the camera set-up and photo printer to produce the special EBT Cards.
Burden upon clients having to come into the office to be photographed.
Recognition of the previously discussed issue that retailers do not check IDs to begin with.
Little discernible effect on fraudulent use of EBT Cards.
Some states had the idea of using photos on file with their respective department of motor vehicles to streamline the process of the photo taking for EBT Cards, but this still leads to no real benefit since retailers don’t check ID’s to begin with. Federal law requires that EBT and Credit/Debit card users be treated in the same manner at the point of purchase. If you don’t check ID for debit card users, you cannot check ID for EBT users either. The case study in Massachusetts had a 2012 report that stated in part that, “the cost of EBT photo IDs would outweigh the benefits.” This same report found that for a state to start a photo EBT card issuance, the process would cost about $4 million in initial starting costs, $3 million in annual costs to EBT vendors, $1 million in staffing costs, and $0.4 million in annual costs of notices to clients. This does not include costs for developing card design, printer technology, or the storage of photo images.
Massachusetts ended their usage of Photo IDs but started again in response to media reports of fraud and overpayments to recipients. Some drug raids found people in possession of multiple EBT cards, and some individuals were found with over $1,500 in accrued EBT accounts. The $1,500 is misleading though because this can be caused, as the report points out, by elderly people who may be hospitalized for extended periods and aren’t using their cards consistently. Either way, these reports prompted the Massachusetts legislature to re-introduce photo EBT cards. Part of the new deal was that retailers would not be fined, at all, for not checking photo EBT cards against regular ID’s, which diminished the purpose of reducing fraud. The law passed, but the policy exempted photo EBT cards for households where the case head was:
Under 19 years old.
Age 60 or older.
Disabled or Blind.
A victim of domestic violence.
A representative authorized to purchase food for a SNAP Recipient.
Someone with religious objections to being photographed.
These exemptions applied to more than 50% of all SNAP Cases in the State. The implementation of the photo IDs to remaining users was a complex process. Situations existed with users not knowing their card was deactivated due to poor communication from the state and would show up for groceries and find out their card no longer worked.
Research has shown that putting photos on EBT cards, or requiring to show ID with EBT cards, does not reduce fraud, and burdens the state, retailer, and recipient. In order to address SNAP and EBT fraud, Florida has taken a different approach.
Florida Fraud By The Numbers
In Florida, 22,000 to 24,000 cases of fraud are discovered or reported per year (Florida EBT Cases). The problem is that these cases are rarely prosecuted due to the state only having 49 total investigators. In 2016 alone, Florida taxpayers lost $12 Million to food stamp assistance fraud. In 2016 in Duval County, there were 145 public assistance fraud cases opened, and only six led to convictions.
In 2013, Florida enacted a new policy that require online applications (93% of all food need applications) go through a customer verification program which makes 8 to 11% of all online applicants opt out of the application altogether. Of those who opt out, up to 83% complete the process manually. This program, according to Florida, has saved tax payers $660 million since its inception in August of 2013. This money is saved because of the cut down on false applications (Florida fights fraud) to food assistance, Medicare, and more. This program uses information sharing between agencies such as the Social Security Administration and gives questions that only a singular person could answer. The questions are more complex than simply their mother’s maiden name.
States Going One Step Further
Some states such as New York, Missouri, and Kansas have enacted, or considered, further reductions to food options by EBT users (W Post). These reductions remove items such as lobster and steak, arguing that these “luxury” items should not be purchased on the tax-payer’s dime. The rules go further to not allow candy, cake, and more, which are all currently allowable in most states. There are some ethical issues regarding this kind of a reduction. For example, if you ban steak sales, would that only apply to the New York Strips, or would it apply to virtually any cut of beef that isn’t already minced? At the same time, is it responsible for the recipient to dine on very expensive goods, paid for by the taxpayer, that do have well established nutritional benefits?
This same idea applies to things such as inexpensive candies and cakes, which are allowable for purchase in Florida by EBT users. If SNAP is meant to get low income individuals nutritional assistance, why would cake be included? The USDA says that things such as candies, ice creams, and cakes are food items and therefore must be eligible to be purchased with EBT cards. Congress has attempted to change this definition before but the administrative costs of enforcement have been found to be costly and burdensome (Burdens of Food). As the article shows, to make a country wide, retailer wide system to identify specific items would be a very bureaucratic and extensive process. And research in the report further showed that EBT users consume sweets and salty snacks at lower rates than people who receive no food supplements. To be clear, purchasing any of these items from the un-healthy candy to high-priced steak is not fraud, but while discussing fraud it is worth discussing ways to narrow purchasable items to be more on the nutritious side, as that is what the program is meant to be used for.
Potential Solutions and Conclusions for Florida
Based upon my research, some solutions to preventing EBT fraud in the State of Florida include:
Prevent ineligible people from getting into the system to begin with, and provide better prevention of electronic disbursements to individuals who lose eligibility once in
Review all EBT-accepting retailers’ nutritional offerings to determine if they offer sufficiently nutritious items in their aisles
Increase funding for DCF to be able to handle the thousands of cases of SNAP Fraud, leading to more convictions and discouragement to commit fraud. The hypothetical reduction in fraud from a more robust department would be likely higher than the cost of increasing the departments resources themselves.
Consider restraining EBT user grocery options to widely considered unhealthy foods in the State, but only after further research is done on how to properly implement such a change that can be cost-effective with minimal bureaucratic overreach to retailers. Part of the consideration would be to examine whether reducing the number of items allowable versus introducing some form of incentive or educational program to purchase fair-priced, nutritious foods is more ideal and cost-effective.
The use of photos on EBT cards is not seen as a solution because it complicates the benefit process, increasing costs to the state with little to no financial benefit in the form of reduction of fraud. Reducing fraud at the point of purchase seems to be a waste of enforcement resources, which come in the form of cashier rules, Identification practices, and more. Focusing enforcement on large fraud rings through methods of surveillance may be more efficient. To combat SNAP and EBT fraud, the point of application and continuation of benefits by individuals and retailers need to be the focus of the state.