As SNAP recipients face the impacts of funding cuts and new work requirement guidelines passed by Congress and supported by the Trump administration, an added worry is outdated EBT card technology that is fueling benefit theft. The Agriculture Department was charged by Congress three years ago to issue new anti-theft regulations, but those regulations have now been pushed back to the end of September. In the meantime, Congress has also ended federal replacement benefits for families who have their SNAP funds stolen. Spotlight spoke with Katie Bergh, a senior policy analyst at the Center on Budget and Policy Priorities, about the program’s multiple challenges. The transcript of that conversation has been lightly edited for length and clarity.
There’s so many issues with SNAP at the moment, but I wanted to get you to talk a little bit, if you would, about this delay on federal fraud guidelines. To start, if you could outline what the issue is there for our readers.
Sure. So, to give some context, right now at SNAP we have kind of the worst of all worlds. We have scammers who are exploiting outdated EBT card technology to steal SNAP benefits from low-income families. People are in the checkout line with a cart full of groceries and then discovering that their SNAP benefits are gone and that they can’t pay for those groceries. We also had Congress end federal replacement benefits about a year ago, meaning that families can no longer get SNAP benefits that are stolen, replaced in nearly all states. Once their grocery money is drained from their account, it’s gone. And there’s also currently no federal requirement for states to transition to more secure payment methods, despite Congress requiring USDA to issue regulations on this more than three years ago.
And then HR1, which is the legislation that passed over the summer, not only enacted the deepest cuts to SNAP in history, not only didn’t do anything to address this problem, but it will cut federal reimbursement for state’s costs to adopt more secure payment methods in half, starting in October, in addition to shifting massive SNAP benefit costs to most state budgets moving forward. So, in essence, we have a problem where low-income families are being victimized and are bearing the cost of these crimes, while the people who really have the power to fix this, the federal government and states, in most cases are not taking action to do so.
And these are administration anti-fraud guidelines that need to be issued? This is nothing that Congress can do, if I’m understanding that correctly.
Congress actually already took some action late in 2022. They passed legislation in the Consolidated Appropriations Act for fiscal year 2023 that did a couple of really important things. One was that it temporarily authorized federal reimbursement for the families who were having their benefits stolen. But it also told USDA to try to fix this problem. It directed the Department of Agriculture to issue regulations to enhance the security of EBT cards, to make it harder for criminals to steal those benefits. Unfortunately, it’s been more than three years now, and USDA has not acted on that requirement.
When the Trump administration first took office, their first regulatory agenda pushed back the timeline for those proposed regulations from March of 2025 to January of 2026. Most recently, they have said that they now anticipate publishing those proposed regulations by September 30. And even once a proposed regulation is issued, the agency would still need to collect and incorporate public comments and then finalize that rule before it would officially be on the books. We still have a long way to go in this regulatory process before there are real requirements.
And has USDA given any indication for the delay?
To my knowledge, they have not fully explained what the holdup is. I do think it’s important to note that the Government Accountability office issued a report on this and noted that fewer than half of the technical experts that USDA hired to help develop these regulations were still on staff at the agency as of May 2025, due to some of the agency staffing changes that were made under this administration. USDA’s Food Nutrition Service overall has lost about one-third of its staff since the start of the Trump administration. So, I do think it is likely a factor that they are losing many of the people who would’ve been doing this work.
Is there an estimate for the amount of benefits that are being lost to scammers, particularly since recipients now can’t recoup those?
Yes. While federal replacement benefits were available, which was for SNAP benefits stolen between October 1, 2022, and December 20, 2024, states reported replacing $322 million in stolen benefits for nearly 679,000 households. That is likely an undercount, because there were limits on how much could be replaced, how often families could receive reimbursement, and how quickly they needed to file a claim in order to qualify for reimbursement.
Unfortunately, since federal replacement benefits ended, we no longer have good data on how much of a problem this is. We do know that, even though families can no longer be reimbursed, the theft is ongoing. USDA’s Office of Inspector General just put out a report estimating that an additional $233 million could be stolen from families in fiscal years 2025 and 2026, based on their best estimates.
And I assume there was probably a fairly rigorous administrative burden on recipients even when they could get reimbursement, which probably deterred some folks from reporting the theft.
Absolutely. And families had to know that they needed to go through that process in the first place in order to receive those replacement benefits.
And so now if your benefits are stolen, there’s nothing you can do
In nearly all states there’s no recourse for families. To my knowledge, only two states, California and Maryland, have been using state funds to replace benefits for some households.
And then going forward, states are going to be judged and penalized for the degree of fraud, correct?
That’s actually not correct; it’s a very common misconception. What states are going to be penalized for, under a new cost sharing requirement, is actually their payment error rate. That’s not a fraud measure. It’s a kind of administrative measure of how much states are overpaying or underpaying households receiving SNAP. And it doesn’t count cases like this where a family who qualifies for benefits is receiving the correct amount.
So, this issue of theft and lack of reimbursement isn’t really impacted by the budget bill?
You know, I think the way it would intersect is that this new cost sharing requirement based on the payment error rate is going to shift very large costs to state budgets. In the next couple of years, many states are projected to be required to start paying in excess of a $100 million dollars a year out of their state budgets to maintain the SNAP program, and that is going to mean there are fewer resources for other things that would protect families. States will have fewer resources to do things like transition to EBT chip cards or take other measures to stop fraud.
So, the likelihood of other states joining the two that you mentioned to try to take their own actions to try to deal with this problem becomes less and less.
We are continuing to see some states take steps to transition to EBT chip cards. Alabama is currently piloting chip cards in some counties and plans to transition to EBT cards in the entire state. We’ve seen some governors recently propose funding in their state budgets to try to fund that transition before their federal reimbursement is cut in half. For example, Oregon and New York both included funding and are seeking funding from their state legislature to try to fund that transition. But again, cost has been a barrier for states to adopt more securement payment methods to date, and it is only going to become more of a barrier moving forward.
Is there any action that can be taken on the Hill or is this mostly a USDA issue at this point?
We have seen bipartisan, bicameral interest among some members for both enhancing the security of the EBT cards and the payment methods that participants are using, but also to restore the federal replacement benefits. Unfortunately, we have not seen action on those bills that have been introduced.
Is there anything you would like to add?
We have seen some good results from the one state that has already fully transitioned to chip EBT cards, which is California. California is unique in that they’re one of the only states that uses state funding to reimburse families whose benefits are stolen. But they were also the first state in the country to actually make the transition to a more secure payment method. And they just announced that they saw an 83% decline in theft reimbursement requests between January 2024 and November 2025, largely because of that transition. Chip technology likely won’t completely eliminate electronic benefit theft, however, so it’s still important for Congress to reinstate replacement benefits for families.