Indiana’s payment error rate for the nation’s largest anti-hunger program rose last year — which, without improvements, could cost the state more than $140 million annually as soon as next year.
That’s according to the latest table of payment error rates for the Supplemental Nutrition Assistance Program, released Wednesday afternoon by the U.S. Department of Agriculture.
Indiana’s error rate for the 2025 federal fiscal year, which runs from October 1 to September 30, was 9.77% — up slightly from the 2024 rate of 9.52%, and qualifying the state for a potential $140 million penalty.
“Indiana’s SNAP payment accuracy rate in 2025 remained virtually unchanged from the prior year and continued to track below the national average (of 10.62%),” Family and Social Services Administration spokesman Marcus Barlow said. “The important year is 2026, and early indicators are positive.”
The payment error rate includes both overpayments and underpayments to SNAP recipients. More than half a million Hoosiers were receiving food aid through SNAP as of March.
Beginning Oct. 1, 2027, states with rates above 6% will be required to cover a share of the benefits paid out to recipients. The first year will be based off either the 2025 or 2026 rate — the state’s choice.
An error rate between 6% and 7.99% would mean a state contributing 5% of benefits. That would equate to nearly $72 million for Indiana, based on 2025’s benefit total of about $1.4 billion, according to FSSA.
Indiana’s latest rate of 9.77, however, would put the state in the next tier. Rates between 8% and 9.99% come with a contribution of 10%, which would cost the state $143 million.
Rates at or above 10% bring the greatest penalty: a 15% contribution, which would be $214 million for Indiana.
Congress finalized the changes last July in H.R. 1, also known as the One Big Beautiful Bill Act. States are already required to correct benefit overpayments and underpayments.
Emily Weikert Bryant, the executive director of Feeding Indiana’s Hungry, noted the 2025 error rate largely predates H.R. 1: the federal government was nine months into its fiscal year when President Donald Trump signed the legislation into law last July.
“If states saw an error rate increase or decrease between ’24 and ’25, that trend was already in place and would not have been a result of any action that they took in response to H.R. 1,” Bryant said.
FSSA has added 65 more oversight positions dedicated to lowering the error rate, for instance. As of March, the agency had filled 31 of the roles.
But Bryant and other advocates fear the 2026 error rates could go up, citing the law’s “major” eligibility changes and “some extremely delayed and sometimes incorrect (USDA Food and Nutrition Service) guidance, in part because of the government shutdown last fall.”
“Even though states have been working frantically in 2026 to bring down error rates … we should, quite frankly, still expect fiscal year ’26 error rates to go up in many places,” she warned.
H.R. 1 also increases states’ share to pay to administer SNAP beginning Oct. 1, 2026. Until then, states and the federal government split administrative costs 50-50. That will shift to a 75% state responsibility.
FSSA has estimated that will cost Indiana $47 million annually.
Bryant said the financial hit could prevent some states from making investments into lowering their error rates.
State lawmakers made additional changes to SNAP in Indiana earlier this year through Senate Enrolled Act 1, including to financial and immigration eligibility requirements.
Bryant’s group, which is the Indiana network of Feeding America food banks, based its opposition in part on the potential for mistakes.
“Part of the conversation with state legislators was: H.R. 1 already changed a lot, and the more you change, the more opportunity you have for errors, right?” she said. “… The focus should really have been on reducing our errors.”
The organization is among those pushing Congress to delay the shift in benefit costs to states. A number of nonpartisan groups representing state governments, state legislatures, county human services administrators and more also asked for a delay in a January letter to congressional leaders.
“A lot of the things with the benefit cost shift were being pressed upon states so quickly and without sufficient planning time that … many states are using blunt tools to lower error rates without looking at and being able to evaluate what’s working, or the unintended consequences that could have an impact on real people,” Bryant said.
Indiana Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: info@indianacapitalchronicle.com.
