Recently, the U.S. Department of Agriculture (USDA) announced additional anti-fraud strategies for the federal Supplemental Nutrition Assistance Program (SNAP, formerly called Food Stamps). The policy is aimed at retailers who accept the benefits.
The Farm Bill of 2008 authorized the USDA to tighten sanctions on retailers who defraud the program. In July 2012, the agency proposed rules that would (1) allow a civil penalty to be imposed in addition to program disqualification, (2) raise the allowable penalties per violation, and (3) give the agency greater flexibility for minor violations.
Trafficking is the exchange of SNAP benefits for cash and is considered the most serious violation of programs rules. Retailers engaging in this behavior can be permanently disqualified from the program. Current program rules allow a civil penalty to be imposed instead of program disqualification; under the new rules, both penalties and disqualification could be levied.
Retailers who take SNAP benefits for “common ineligible” products (e.g., paper products) are also subject to program disqualification, although only temporarily. The proposed rules would provide the option to apply the disqualification only to repeat offenders. And first-time offenders would be subject to a civil penalty of $1,000 in lieu of disqualification. These rules would give retailers the ability to take corrective actions.
