Texas is facing potential financial penalties exceeding $700 million due to errors in its Supplemental Nutrition Assistance Program (SNAP) payments. State officials have been warned they must rectify these issues by the end of 2027 to avoid significant financial repercussions.

SNAP Error Rate and Financial Risk

The Texas Health and Human Services (THHS) presented these updates to the Senate Health and Human Services Committee (SHHSC), highlighting the urgency of the situation. The state’s current error rate, just under 9% of SNAP payments, puts it at risk of being liable for 10% of the total federal SNAP cost.

This could result in a payment of over $700 million if the errors are not addressed. These errors are not attributed to fraud, but rather to factors like fluctuating recipient income, leading to over or underpayments.

Rising Administrative Costs

In addition to the potential penalties, Texas is preparing for a substantial increase in SNAP administrative costs. Starting in October 2026, the state’s share of operating costs will increase from 50% to 75%.

Projected Cost Increases

THHS projects this shift will raise state spending on administrative fees from approximately $470.5 million in 2024 to nearly $600 million, an increase of roughly $117.3 million. This underscores the need for efficient program management and cost control.

Recent SNAP Program Changes

Recent changes to the SNAP program in Texas, enacted through Senate Bill 379, include restrictions on eligible food purchases. These regulations limit the use of Lone Star Cards for items like candy, gum, and sugary drinks.

Permitted Purchases

However, essential items like milk, chocolate milk, fruit juice-based beverages (at least 50% juice), and medical-grade electrolyte drinks remain eligible for purchase. The basic funding levels for SNAP recipients remain relatively consistent, with monthly benefits around $300 for individuals and nearly $1,800 for a family of eight.

Work requirements for individuals aged 16 to 59 remain in effect, with exemptions for caregivers.