Illinois at risk of losing $700M in SNAP funding from high error rate

Illinois must cut its error rate nearly in half to avoid penalties.

Illinois’ high error rate administering food stamp benefits could cost the state over $700 million, according to a new report from the Governor’s Office of Management and Budget.

Reforms to Supplemental Nutrition Assistance Program in the federal One Big Beautiful Bill, passed in July 2025, require states to reduce their error rate to below 6% by 2028 or 2030 if a state’s error rate meets a certain level.

The error rate measures overpayments and underpayments of SNAP benefits, though overpayments are more common.

Illinois error rate is 11.56%, 12th highest among states. The state’s overpayment rate was 10.64%, and its underpayment rate was 0.93%.

In September, there were over 1.86 million SNAP recipient, meaning over 198,000 payments were too high, while only about 17,000 were underpayments.

Only eleven states had higher error rates than Illinois in 2024. South Dakota’s rate was lowest, at 3.28%.

Beginning in fiscal year 2028, if a state’s error rate is below 6%, the state will not be responsible for paying any portion of SNAP’s costs. If the error rate is between 6% and 8%, the state’s share will be 5%. An error rate between 8% and 10% will cost a state 10% of overall costs. If a state’s error rate is above 10%, it will be liable for 15% of program costs.

Illinois received $4.7 billion in federal funds last year. If the state’s error rate remains above 10% and the number of recipients remains the same, the state would owe about $705 million.

Illinois’ error rate has increased significantly over time. As recently as 2012 it was only 1.7%.

The purpose of the reforms is to enhance program integrity and ensure recipients are receiving the appropriate amount of benefits by giving states additional skin in the game.

Without reforms, the state risks owing significantly more to cover SNAP program costs.

A separate part of the reform will require Illinois to pay an increased portion of administrative costs, from 50% today to 75% after it takes effect. This is expected to cost the state $80 million annually if the number of SNAP recipients remains the same.

Fortunately, Illinois has many options for increasing program integrity and reducing overpayments, including:

• Verifying income by cross-checking applicant income and deduction information with wage data, either in-state or through a third party.
• Requiring recipients to recertify benefits every six months. This would ensure Illinois monitor eligibility more closely.
• Stopping automatically enrolling individuals who receive benefits from Supplemental Security Income and Temporary Assistance for Needy Families and repealing broad-based categorical eligibility.
• End simplified reporting, which allows states to maintain an individual’s benefits without checking changes in income or deductions until recertification.

The best way for Illinois to ensure needy Illinoisans receive the benefits they need while spending taxpayer resources responsibly is to reduce its overpayment rate. Without reform, there will be fewer resources available for other items in the state’s budget.