How Reconciliation Can Help Reduce SNAP Fraud and Waste

Waste, fraud, and abuse in the welfare system have been on full display for the last several months, giving Congress a clear opportunity for reform. As lawmakers consider another budget reconciliation, they should prioritize improving the Supplemental Nutrition Assistance Program, one of the federal government’s largest welfare programs.

First, Congress could eliminate a major loophole in SNAP (called broad-based categorical eligibility, or BBCE). This loophole allows people to get on SNAP without being subject to any asset tests. This means that even people with large savings can receive SNAP if they have even a temporary setback in income.

The way the loophole works is that it allows states to qualify a person for SNAP if the person receives a service from another welfare program—Temporary Assistance for Needy Families. What counts as a TANF “service,” though, can be as simple as receiving a TANF pamphlet or being referred to a TANF hotline.

The effect of this loophole is substantial. Roughly 70% of SNAP households qualify through BBCE. In 2018, an estimated 5 million individuals received SNAP benefits solely due to BBCE, at a cost of approximately $7 billion. SNAP benefits have climbed dramatically since 2018, so that amount is likely much higher today.

Another problem with BBCE is that it weakens SNAP’s verification process, opening the program up to greater waste and abuse. Households that qualify for SNAP through BBCE have substantially higher rates of improper payments.

Congress could end broad-based categorical eligibility by limiting categorical eligibility to households that have been receiving meaningful assistance from other means-tested programs for at least six months—e.g., at least $50 per month in cash assistance or a substantial benefit like TANF childcare assistance. No more handing people a brochure and saying it counts as a welfare service.

Eliminating BBCE would save billions. The Heritage Foundation has estimated savings as high as $28.5 billion over a decade. The Congressional Budget Office has produced lower estimates, at about $8.1 billion over 10 years. Even assuming conservative estimates, the savings are substantial.

Ending BBCE has been included in legislation such as the SNAP Reform and Upward Mobility Act introduced by Sen. Mike Lee, R-Utah.

Congress should also strengthen SNAP verification rules and improve household definition rules to reduce fraud and improper payments.

Currently, when people apply for SNAP they must report income and household size, and states may verify this information using sources like tax data from the IRS or Medicaid records. But applicants can override conflicting information through self-attestation. In practice, SNAP benefits are often issued immediately based on self-reported information, even when discrepancies exist between what people say and what secondary data sources show, and households continue to get benefits during any review.

Congress should require states to rely on secondary data sources as the default for verifying eligibility. Self-attestation should be used only if other data are unavailable, and benefits should be delayed while discrepancies are unresolved.

Household composition rules also weaken SNAP’s integrity. SNAP applicants must include spouses and children as part of the household, but they are allowed to exclude other adults, such as a cohabiting partner, even when they share food with them. This allows applicants to exclude higher-income individuals from the household, which can mean higher benefits. It also creates a marriage penalty, since spouses must be counted but not cohabiting partners.

All household members should be included by default when determining SNAP eligibility. Exclusions should only be allowed when applicants provide documentation that shows separate financial responsibility.

If these reforms—relying on secondary data sources and including all members of a household by default—reduced overpayments by half during the next decade, it would save an estimated $45.5 billion.

Ending broad-based categorical eligibility and strengthening verification would restore SNAP’s focus, reduce improper payments, and ensure assistance is directed to those who need it most. Congress should take the opportunity now to make these important reforms.