On Thursday, the state Department of Health and Human Services (DHHS) announced a plan to deliver food to New Hampshire food stamp recipients should the federal government shutdown continue into November.
The partnership with the New Hampshire Food Bank was announced just 13 days after the U.S. Department of Agriculture warned states that funding for the Supplemental Nutrition Assistance Program (SNAP) would not cover all obligations in November if Congress doesn’t reopen the government.
The short-term fix shows that the state DHHS can respond quickly to solve problems under pressure. And that’s encouraging because the state faces a longer-term SNAP problem next year if DHHS doesn’t improve the program’s administration soon.
To reduce federal SNAP expenditures, this year’s One Big Beautiful Bill Act made multiple changes to the program. Two changes in particular are projected to increase New Hampshire’s portion of SNAP spending by millions of dollars.
The good news is that the state can avoid at least some of these costs by better managing the program. The bad news is that it has to act right now.
Currently, the federal government covers 100% of SNAP benefit payments and 50% of the administrative costs. States cover the other half of the program’s administration.
Starting in Fiscal Year 2028, states that have payment error rates between 6%-8% of their total SNAP spending will be required to pay 5% of the costs of SNAP benefits in their state. Without swift improvements in program administration, New Hampshire will be one of those states.
New Hampshire’s FY 2024 payment error rate was 7.57%. The state hasn’t had an error rate below 6% since 2015. Under the OBBA, states can choose whether their FY 2025 or 2026 error rate will be used to determine their cost-sharing obligation for SNAP benefits. That leaves New Hampshire no time to start bringing down its error rate, as the state is already in FY 2026.
(The FY 2025 rate is not out yet. Even if it somehow falls below 6%, New Hampshire can’t count on luck going forward. It needs to know that it can keep the error rate below 6% every year consistently.)
Unless DHHS can reduce its error rate, New Hampshire taxpayers will be on the hook for an estimated $7.7 million in benefit payments, according to an analysis this month from the Foundation for Government Accountability.
That estimate is based on the state’s FY 2024 SNAP benefits. The payment will be larger if benefit payouts continue to rise, as they have for years. New Hampshire SNAP payments totaled $140.7 million in FY 2014 and $154.2 million in FY 2024, representing an average increase of $1.35 million per year.
At 7.57%, New Hampshire’s error rate is well below the national average of 10.93%. Breaking the error rate down into types of mistakes shows where the state needs improvement.
The federal government measures overpayments and underpayments. An overpayment is one that exceeds what a recipient was qualified to receive, and an underpayment is one that falls short. Both are counted equally when determining the total error rate.
New Hampshire’s overpayment rate is 4.52%, less than half of the national average of 9.26%. New Hampshire had the sixth-lowest overpayment rate in the country in FY 2024.
The state’s underpayment rate, however, was 3.05%, almost double the national average of 1.67%. Only Maryland and the District of Columbia had higher underpayment rates than New Hampshire in FY 2024.
The federal government does not reward states for underpaying SNAP recipients. Underpayments and overpayments are equivalent errors.
If New Hampshire wants to avoid a multi-million dollar penalty for SNAP payment errors, it has to improve its payment accuracy this fiscal year. And that means it has to achieve a significant reduction in both its overpayment and underpayment rates. Bringing its underpayment rate down to the national average would still leave it slightly above the 6% threshold.
Achieving at least a 1.57 percentage point error rate reduction is a big challenge, given the short time frame. We’re already in the fourth month of the fiscal year. But fixing those errors immediately is paramount if the state is to avoid a penalty of likely more than $8 million.
(Wyoming has the lowest SNAP payment error rate in the nation. Here the director of the Wyoming Dept. of Family Services testifies before Congress on how they keep their error rates so low.)
Even if New Hampshire succeeds in getting its error rate below 6%, another cost looms. Starting in 2027, the federal government drops its share of SNAP administrative cost coverage from 50% to 25%. That can’t be avoided. But the state can lower the impact by improving administrative efficiency.
Both of these OBBA changes were designed to encourage more efficient administration of SNAP. New Hampshire has a choice. It can accept a multi-million dollar budget hit, or it can move immediately to cut its SNAP payment error rate and trim administrative costs.
