MONTGOMERY, Ala. – The state’s payment error rate for the Supplemental Nutrition Assistance Program has unofficially improved to 7.89% for fiscal year 2026, officials on the Alabama State Board of Human Resources said Thursday.
The tentative new error rate, calculated with unofficial data through June, would significantly reduce the proportion of benefits Alabama would have to cover under program changes made in the One Big Beautiful Bill Act. Under the 2025 legislation, the federal government is shifting up to 15% of benefit costs to states depending on how accurately they administer the program.
The cost-sharing begins in fiscal year 2028, and Alabama can choose to use its error rate from either fiscal year 2025 or 2026 to determine how much it owes.
Alabama’s error rate was 9.52% in 2025, meaning the state would be on the hook for about $174 million, or 10% of benefit costs. The unofficial 7.89% rate shared Thursday would place the state in the 5% cost-sharing bracket, and if the state could lower its rate to below 6%, it wouldn’t have to pay any additional costs.
Brandon Hardin, who manages the SNAP program for the Alabama Department of Human Resources, called the lower rate a “significant improvement,” though he repeatedly emphasized that the number is unofficial and could fluctuate in either direction.
Keeping the rate under 8% would save the state around $90 million, Hardin said.
“It’s very important to note that it could change from month to month, but you can see a trend that’s trending in the right direction,” Hardin said. “Those rates are primarily under 8%. (It’s) looking very, very good, but there’s still a lot of work in front of us.”
The rate is unofficial because the federal government audits the DHR’s internal quality control to determine the final payment error rate. The whole process operates on a more-than-six-month delay, making it difficult for lawmakers and state officials to plan for how much additional funding the state will need.
Even with the positive trend in unofficial data, the department will still ask the Legislature for enough funds to cover the potential $174 million shortfall in fiscal year 2028, DHR Commissioner Nancy Buckner said. The Legislature will take up the fiscal 2028 budget before the department knows the state’s official error rate for fiscal year 2026 and how much it will owe in benefit costs, she said.
“We’re going to be working on the ’28 budget coming up, so that’s why that ask will be in there that large, even though we know what the unofficial rate is,” Buckner said. “We’re hoping it will hold, but we don’t know for sure that it will hold until the feds give it its stamp of approval and they are behind. We’ve got three more submissions to make this year, and we can’t pull them up and go and make them. You make them on the (Food and Nutrition Service’s) timetable, so we’ve got July, August and September left to send in.”
Waivers
In addition to staff training and new verification policies, the state has asked the federal government for several waivers to change how the payment error rate is calculated.
Federal officials have already denied Alabama’s requests to consider only information available when a case was approved and to separate recipient-caused mistakes from agency errors. Three waivers are still pending.
One pending request would allow the state to lower the ceiling on income eligibility requirements applicants must meet to be eligible for SNAP benefits in Alabama. Hardin said the department would determine the level of reduction depending on how much the Legislature appropriates for the program.
“This would significantly reduce eligibility for SNAP benefits by reducing the federal poverty level, which is at 130%, and also the gross and net income limits for families,” Hardin told board members about the waiver.
Though the department submitted the request to potentially change eligibility as it relates to the federal poverty level, Buckner said the state is “nowhere close to that at this point.”
“We submitted that waiver because that was what was in the bill. The General Fund bill had that in there that we would submit the plan, and that’s part of the plan in there,” Buckner said. “So that’s why we submitted that waiver. The feds have got to approve it first and foremost, and I don’t know if they will approve it or not. We are nowhere close to reducing benefits. We want everybody that’s eligible to get them, but if you’re not eligible and you’re committing fraud, we don’t.”
Another pending waiver would remove proven fraud from the error rate.
Buckner said the state collects around $7 million annually between fraud and payment error and that this waiver would lower the error rate even further.
“We don’t want to disincentivize any state for finding fraud in their quality control, so we think if they pull the case and there’s actually somebody that’s defrauding the system, we want quality control to find that,” Hardin said. “We don’t think that that should be held against us if somebody committed fraud and we found it and we collected on it. So that’s what we’re working on.”
The final pending waiver request has to do with reducing SNAP household monthly benefits by a percentage determined by the error rate.
“The effects of the benefits adjustment would provide the state with a mechanism to directly absorb the fiscal impact associated with an assessed (payment error rate) penalty by reducing the federal share of allowable SNAP benefit cost-share reimbursed to the state,” a slide presented to board members read.
Following legislation passed during the last legislative session, the department also submitted a request to prohibit SNAP recipients from purchasing certain sugary drinks and candy with their benefits. Hardin said DHR is currently in negotiations with federal partners about that waiver.
What’s next
Hardin also reiterated Thursday the department’s request to Alabama’s federal delegation to fight for a two-year delay in the cost shifts, calling it the “best plan” for the program. Board members unanimously approved the request in the board’s July meeting.
States with the highest payment error rates automatically receive a two-year delay in cost-sharing. Alabama advocates have argued that’s not fair and that all states should receive the same delay.
U.S. Senate Agriculture Committee Democrats had tried to attach a two-year delay to a farm bill, but Senate Republicans advanced the legislation out of committee on a party-line vote in September with only a one-year delay included.
Unrelated to the error rate, a separate change in the law shifted an additional 25% of SNAP administrative costs from the federal government to the states beginning in fiscal year 2027, which began on Oct. 1. Alabama must pay an additional $39 million in administrative costs every year.
Around 90,000 Alabamians have lost SNAP benefits since July 2025, when Congress passed the law, Hardin said. He said that everyone at DHR hopes that the program can continue despite the financial challenges.
“It’s a vital program for the nutritional needs of Alabamians,” Hardin said. “We all heard from multiple advocates and grocery store people, this is an economic issue also when you’re talking about what it affects in those areas too. Ultimately, our clients need this thing, so it’s up to us at DHR to try to correct those error rates. The best we can do is try to move those down where we can have less liability, but this is a problem that we’re going to face each fiscal year going forward.”