SNAP: Recipient Claims Administration Challenges as a Result of Responding to the COVID-19 Public Health Emergency

This memorandum is in response to SNAP state agencies’ requests for guidance on existing regulatory flexibilities at 7 CFR 273.18 to help mitigate challenges in administering recipient claims resulting during the COVID 19 crisis. States are strongly encouraged to consider the regulatory flexibilities outlined in this memo to improve the efficiency and effectiveness of program administration.

In response to the COVID-19 Public Health Emergency, state agencies had to navigate newly enacted legislation while identifying ways to innovate and implement new program options and initiatives, such as emergency allotments, a variety of SNAP waivers, and online SNAP purchasing. At the same time, state agencies were inundated with a significant increase in applications as many households found themselves with increased food insecurity due to the pandemic. There were also many changes to other programs, such as Unemployment Insurance, that had an impact on SNAP eligibility, benefit levels and operations. States made great efforts to deliver the same level of service while implementing new and challenging social distancing measures, resulting in the closing of local offices, and the increased demand on call centers. The confluence of these challenges, and others, resulted in unique circumstances that likely caused over- and under-issuances of benefits to some households. When overpayments occur, SNAP regulations at 7 CFR 273.18(a)(2) direct state agencies to establish and collect claims.

In April 2020, the Food and Nutrition Service (FNS) offered state agencies an administrative waiver to temporarily suspend the establishment and collection of recipient claims, starting in March 2020. The waiver allowed states flexibility in meeting the regulatory requirements found at 7 CFR 273.18(d), and 273.18(e)(1) and (e)(5), which allowed state agencies to ensure their resources were focused on application processing and customer service.

Many state agencies that adopted this waiver and suspended claim activity have resumed the claims process. The establishment and collection of claims may contribute to further economic distress for households already struggling from the financial, physical, and emotional toll brought on by the pandemic. In many cases, the over-issuances resulted from challenges the pandemic presented and are not necessarily the fault of states, applicants, or participating households. Over-issuances may be a result of implementing new programs, temporary changes in state certification and re-certification procedures due to FFCRA-related adjustments, challenges in shifting to remote work and the broader COVID-19 context.

The claims process places a large administrative burden upon state agencies to address a significant backlog of cases in a timely manner in accordance with 7 CFR 273.18(d). Additionally, challenges such as verifying income and deductions, which are necessary to calculate a claim amount, are other obstacles to establishing a claim amount in a timely manner. To help address these issues, FNS encourages state agencies to consider utilizing the four administrative regulatory flexibilities outlined in this memo.

I. Submit a Request for an Administrative Waiver for Pandemic-Caused Over-issuances

For pandemic-caused over-issuances, which excludes over-issuances due to an intentional program violation (IPV), states may submit a request under 7 CFR 272.3(c)(1) to waive SNAP regulations at 7 CFR 273.18(a)(2), which requires the state agency to establish and collect claims. This option provides authority for state agencies to waive establishment of a claim resulting from pandemic-caused over-issuances.

State agencies should provide compelling justification for the waiver. In accordance with 7 CFR 272.3(c)(4), requests should include at a minimum the following information:

1. Reasons why the waiver is needed;
2. The portion of caseload or potential caseload which would be affected and the characteristics of the affected caseload such as geographic, urban, or rural concentration;
3. Anticipated impact on service to participants or potential participants who would be affected;
4. Anticipated time period for which the waiver is needed and;
5. Thorough explanation of the proposed alternative provision to be used in lieu of the waived regulatory provision

In addition, FNS recommends that state agencies specify the likely contributing factors that unintentionally led to pandemic-caused over-issuances, such as:

• Legislation requiring state agencies to quickly implement new programs and increase benefits to support the increased need as a result of the pandemic.
• Temporary changes in state certification and re-certification procedures due to FFCRA-related adjustments.
• Social distancing mandates that resulted in the temporary closing of local offices and challenges in shifting to remote work.

Approval authority for this waiver is based on 7 CFR 272.3(c)(1)(ii), which allows FNS to approve waivers that would result in a more effective and efficient administration of the program. State agencies must explain how such a waiver would support effective and efficient administration of SNAP. State agencies should specify any administrative factors affecting efficient operation of the program, such as the size and scope of the pandemic-caused claims backlog, if one exists, workforce limitations, etc. This information is necessary for FNS to ensure the waiver meets regulatory requirements found at 7 CFR 272.3(c)(1)(ii). This waiver request should not include claims established due to IPVs. This flexibility, if approved, will apply only to eligible pandemic-caused overissuances starting in March 2020 through the end of the National Public Health Emergency.

II. Revise the Claims Threshold for Pandemic-Caused Over-issuances

SNAP regulations at 7 CFR 273.18(e)(2) allow state agencies to establish a cost effectiveness policy for establishing claims that differs from the regulatory threshold of $125, provided the plan is approved by FNS.

For example, during disasters, states may set a cost effectiveness threshold amount for establishing D-SNAP claims to lessen the financial burden on households and the administrative burden on state agencies, which could otherwise impact customer service during a disaster situation. Similarly, FNS will consider new or amended cost effectiveness plans from state agencies provided that the higher threshold is specific to pandemic-caused over-issuances. States electing to pursue this option must submit new or revised cost effectiveness plans to their regional office for approval as part of the state’s plan of operation. New or amended plans must specify the contributing factors that likely led to pandemic-caused over-issuances and an explanation as to why it is not cost effective to pursue claims under the new or revised threshold amount.

Existing thresholds, whether the $125 in regulation or other amounts already approved by FNS, shall continue to apply to over-issuances which are not pandemic-caused over-issuances. New or amended cost effectiveness plans only apply to pandemic-caused over-issuances, starting in March 2020 through the end of the National Public Health Emergency. The new or amended plans should not include overpayments due to IPVs.

III. Terminate and Write off Claims for Pandemic-Caused Over-issuances

FNS strongly encourages state agencies to review the criteria for terminating and writing off claims at 7 CFR 273.18(e)(8)(ii) and to take such action as applicable. A terminated claim is a claim for which all collection action has stopped. A written-off claim is a claim that is no longer subject to our reporting and collection requirements.

State agencies may consider terminating and writing off claims under 7 CFR 273.18(e)(8) in situations where:

• Implementation of procedural requirements was an unintentional contributing factor that led to the over-issuance;
• The collection of the claim may cause undue economic hardship on the household; or
• It is impractical to accurately establish a claim amount or reasonably collect the funds due to the unique circumstances of responding to the COVID-19 Public Health Emergency.

IV. Compromise Claims Due to Financial Hardship

Given the extreme financial challenges households are enduring due to the pandemic, FNS strongly encourages state agencies to consider existing regulatory flexibilities that allow states to compromise claims based on financial hardship. States have the flexibility to define what constitutes “hardship” on a case-by-case basis or for the entire SNAP claims caseload. For example, states can use a specific poverty level percentage as the income threshold for compromising claims.

Per 7 CFR 273.18(e)(7), a state agency is permitted to compromise a claim or portion of a claim when the state agency determines that the household’s economic circumstances dictate that the claim will not be paid in three years. SNAP regulations allow for reinstatement of the compromised portion of a claim if the remaining claim balance subsequently becomes delinquent. However, reinstatement is a state agency option and not a requirement.

A state agency that wishes to exercise any of the four regulatory flexibilities described should take the following steps:

• To request a waiver (I), please submit your waiver request and supporting data via WIMS.²
• To revise the claims threshold (II), please submit a cost effectiveness plan with supporting data to the appropriate regional office representative.
• To exercise the flexibility to terminate and write-off claims (III) or compromise claims (IV), please submit a Letter of Intent, including any supporting documentation and timeframe, to the appropriate regional office representative.

FNS sincerely appreciates the tremendous efforts of our state partners in expanding services and delivering nutrition assistance to low-income families during such a critical time. We hope this memorandum is helpful as states consider how to assist households impacted by the pandemic-caused over-issuances. We look forward to continuing our work with state agencies to strengthen the nutrition security of American families.

State agencies with questions should contact their respective regional office representatives.

Jessica Shahin
Associate Administrator
Supplemental Nutrition Assistance Program

¹ The information collection burden for all claims-related activities discussed in this memo are covered under OMB Control Number 0584-0492.

² Information collection burden for the waiver request process is covered under OMB Control Number 0584-0083.