Is Food Stamp Fraud Ruining Our National Budget?

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A few weeks ago John from Frugal Rules posted about the possibility of a cut to food stamp (or, really, SNAP) on a federal level.  The article listed some interesting numbers, and referenced a video of a man from California who is essentially committing food stamp fraud, using food stamps so that he doesn’t have to work.  (The whole thing seemed really outrageous to me; I don’t know if I even believe the whole thing was real.)  The comments section had me going.  I know people tend to be pseudo-polarized on this issue.  I’m probably one of those people.  I wanted to comment on pretty much everything everyone said.  I thought it might be better to just write a post addressing some of the things I saw so I could explain why I have the opinions I do more fully.  Hope that’s okay, John.  Know that I respect you even though I may disagree on some points.  The headings below are me paraphrasing some of the comments and sentiments.

They should have tighter restrictions/make it harder to get in on the food stamp/SNAP program.

I don’t know about that.  Those who have been on welfare relate that it’s not an easy process.  The man in the video said you have to certify once a year, but I that didn’t sound right to me.  So I looked it up.  In Pennsylvania, you have to re-certify every six months.  And that’s if you have no changes to your household or income.  Certifying requires that a ton of documents be presented.  A ton. You are usually required to provide all of this paperwork on very short notice. Case workers are incredibly hard to get a hold of in most areas, making it harder to access their knowledge about what you need to provide and what you need to do should you have a change in your case.  Getting on welfare is already hard, and as one of the commenters in John’s post pointed out, people who are just above the income limit aren’t doing very well, either.  I think raising expectations or lowering the income limit would make things even worse for the people who are truly trying to use the system for what it’s there for:  a stepping stone to build a better life while you’re going through a hellish financial time.

We should cut spending, but do it in a way that catches all food stamp fraud and isn’t an overall percentage cut to everyone who participates in the program.

Agreed.  But there’s a major problem with that.  It’s essentially that social workers don’t get paid enough.  I’m sure there’s a few gems out there that work for state welfare systems that truly care about their clientele, but a lot of them are burnt out and getting paid crap.  If you really want to weed out the moochers, you’re going to have to invest more in the infrastructure which means hiring more people to investigate cases or paying the people who are overburdened enough that they’re motivated to do a really great job.  (Again, I know there’s some great ones out there.  I just think they’re few and far between.)  In order to fix this problem, I think you’d have to spend more rather than less.

I’m also not in favor of an across-the-board cut.  I, like some of the commenters, think that there are other programs that could stand to take a hit before the one that provides food to those who otherwise would not be able to afford to eat.

People on welfare need to learn financial literacy.  We should set that up for them.

Okay, but just so you know that’s going to add even more money to the budget.  I think everyone needs to learn some financial literacy.  To assume that just because someone is in a bad financial situation means that they are an idiot with money is misled.  Maybe they became disabled and are unable to earn a living.  Maybe they’d love to be out there earning their keep and keeping up with their bills independently, but are physically unable to. Maybe they haven’t been able to find a decent job in order to meet all of those financial goals.  It’s hard to invest in an emergency fund or a Roth IRA when you’re struggling just to get enough cash together to make rent and put food on the table.  You may end up working a ton of hours at a job that doesn’t pay much more money while you’re trying to get back on top.  That doesn’t leave you a whole lot of time to do things that might increase your earning potential.

SNAP benefits may be able to take a little of the edge off.  Maybe they’re giving that person a few less worries so that they’re able to work less hours and have time to get career training.  Or actually be able to go on job hunts.  Maybe they’re doing all that and they just can’t find jobs.  The economy’s gotten better, but when it comes to interviews and hiring the power balance still lies largely with employers.  There’s tons of competition.

I’m all for financial literacy.  But middle-class families fund their lifestyle through debt all the time.  They may have a big house and decent car, but how much of that is financed?  They may have groceries on the table, but how much money is left in their bank account after that?  Financial incompetence is not a problem unique to the poor.  It may just be more visible with them.

We should give people incentives to get off the system.

Agreed.  That seems to be the opposite of what’s happening, though.  At least in the state of Pennsylvania.  Not too long ago, they lowered how much money you could have in savings/as assets in order to qualify. Now, the total value of your second car, savings account, and any other assets (I believe home values are not included) cannot exceed $5,000.  That seems like a good rule.  If you have assets, you should liquidate them before turning to someone else for help.  The problem is is that if you are trying to encourage someone not to rely on credit cards or to build up an emergency fund so that they don’t have to, limiting the amount they’re allowed to save is counterproductive.  If anything, it’s going to keep them reliant on welfare longer.  I take umbridge with the second car thing, too.  Sure, you shouldn’t be driving around a Maserati.  But if you’re a dual income household that has need of two cars in order to get to work, something that’s worth $5k is just barely above the beater range.  And maybe not even.  At least in this part of the country.  A car that’s in bad shape is going to cause you to have more repairs.  So you’ll need a bigger emergency fund. OH, WAIT…..

I saw this lady checking out in front of me at the grocery store and she got $50 of junk food.  We should have rules that tell poor people they can only buy healthy food.  This makes me angry.

Well, then calm down, friend.  You don’t know what she has at home in her pantry.  She might be completely set on fruits and veggies and whole grains.  You don’t know how big her family is.  Maybe she has five kids and her husband just lost his job.  That $50 in junk food might be a week’s worth of snacks (though they may be unhealthy…have you never eaten an Oreo?)  Maybe there’s a trunk-or-treat event her kids really want to participate in, but everyone has to pass out candy.  (Things like that are going to be a pretty rare occurrence.)  Or maybe, just maybe, she can’t afford to feed her family healthily, even with the food stamps.  Because healthy food tends to be more expensive.  (If you’d like to learn how to eat healthily on an extremely tight budget, check out The Frugal Exerciser’s article.  It’s amazing.)

It always blows my mind when people think the government should interfere less in people’s lives by letting them “earn their keep” and provide less benefits, but it would be okay to govern their diet down to the grocery list.  If the government came in and told richer people which foods they were and weren’t allowed to buy, I imagine there would be an uproar.

Once I was at a gas station where they accept EBT cards.  There was a girl checking out.  She was getting a pop after she had just pumped some gas.  She ran her debit card through several times, and it kept getting declined.  Clearly embarrassed, she pulled out her EBT card.  “Sorry about that,” she said.

“Oh, don’t worry about it,” came back a snarky cashier.  “I pay taxes so I’ve already paid for your pop.”

And then something amazing happened.  Instead of being ashamed, she told him off.  “You know what, I work hard, too.  I don’t make a lot of money.  I have a kid.  But I also have a job and pay taxes.  I’m taking classes online so that I can get off of the system.  But I know I paid more than $1.79 in taxes last year.  So don’t worry…this one’s on me.  I’m not taking j@*# sh!t out of your pocket.”

I cheered like we just won the Super Bowl.

I would actually be willing to pay more in taxes for a supplemental program that you could only buy healthy foods on.

I have such great news for you!  You already are!  At least for women who are pregnant or for children.  It’s called the Woman Infant Child program (WIC) and it does exactly that:  gives people “checks” that allow them to buy fruits vegetables, grains, and proteins that aren’t through meat on a monthly basis.  They have to buy things that are a certain size and of a certain brand, therefore ensuring nutritional value is met.  They literally can’t check anything out that doesn’t meet the programs standards.  The fact that this exists is another reason you should not judge the lady who checked out in front of you with all junk food.  Maybe she’s set on healthy food because she’s already used her WIC checks for this week.

The surfer from California was able to buy sushi.  I couldn’t buy sushi when I was on food stamps.  But I could buy red bull.  But not tea.

If you look closely at the package in the video, it looks kind of like DIY sushi…I don’t think it’s rolled up.  I could be wrong.  But generally the rule is you cannot buy hot, prepared dishes.  While sushi meets the prepared part, it doesn’t meet the hot.  Maybe that’s how he’s able to buy it in California.

Either way, the discrepancy in what you were allowed to buy vs what he could may be that you live in different states.  The federal program lays out rules, but states have a little bit of wiggle room in changing them.  For example, when I lived in Idaho, I briefly had a side job as a cashier at a grocery store.  So I know that people could not buy energy drinks there using their SNAP benefits.  But you can.  I’m assuming the states tweak the restrictions a little bit as they see fit.  I’m pretty sure I’ve seen people here in PA buy tea.  I could be mistaken on that, though.

Another interesting anecdote:  also when I lived in Idaho, I once ordered a pizza.  I paid a normal pizza price to a place I had heard rave reviews about and had it delivered.  The delivery guy handed it to me….uncooked and wrapped in saran wrap.  “What the hell is this?”  (Hell is a swear word in eastern Idaho, just so you know.)

“Your pizza?”

“Why didn’t you cook it?”

“You have to come in to the restaurant if you want cooked pizza.  We only deliver them this way.”

“Why?”

“It’s just what we do.”

That’s one of the few times I haven’t given someone in the service industry a tip.  I feel like a jerk retrospectively.  It wasn’t his fault that the business had neglected to do half of their job.

A few months later I found out why they delivered uncooked pizzas.  I lived in a college town, which would normally make you ineligible for food stamp benefits in most states.  But this was a Mormon college, and Mormons usually have kids very, very young.  So you have a bunch of college students with babies and they’re all eligible.  You can’t get hot/prepared food on food stamps.  But you can order a frozen pizza.

This business saw a need and they filled it.  They were geniuses.  I have no doubt that adjusting their product to meet eligibility requirements for the large SNAP beneficiary base was the biggest reason for their wild success and those rave reviews I heard.

The surfer guy is a jerk face.

Agreed.  But he really is a rarity.  You might not believe it.  You might look at all the people who are receiving benefits and judge them all the be committing food stamp fraud by the few lazy scammers.  That would be a terrible shame, though.  Because most recipients are honest people just trying to get by.  Some of them even have bigger plans in the works, and are using the system the way it’s intended to be used:  as a stepping stone.

28 thoughts on “Is Food Stamp Fraud Ruining Our National Budget?

  1. John S @ Frugal Rules

    “Financial incompetence is not a problem unique to the poor. It may just be more visible with them.” I could not agree more. I’ve spoken with thousands of people over my career who were making well more than me and making completely foolish financial decisions so I saw on a daily basis how your income level has absolutely nothing to do with your financial literacy level. My point on touching on this in the post was not necessarily that it be a requirement to get off food stamps, but that it’s needed as a whole in our society. With nearly 50 million on food stamps there is bound to be some abuse (how much I don’t know – but it’s inevitable.) I agree that many middle class families finance many of their things – heck I saw it growing up…that doesn’t excuse it though. We need to see growth in this and while it may mean more cost – I don’t know that it would be at crazy high levels. Many local banks and libraries offer these classes for free. These should be encouraged. There are other things that can be done, but the framework is there – we just have to champion it so future generations can improve on this and not make the same mistakes we have.

    Anyway, thank you for your thoughtful response to my post. 🙂 Like I sort of touched on in the post, I don’t know where I necessarily stand on the issue. I do believe some change is needed, but how that will happen or what it needs to be I don’t know. I do believe this guy from California is completely over the top, though I think arguing if the food is prepared or not is missing the point a bit. He willingly admitted that he was basically gaming the system and even encouraged others to do the same. That is what I have issue with. This program is huge in terms of money spent and fully believe that those who do need it…children, disabled, those who can’t work should get every dime of help they can, but individuals like this man make it harder on all involved. He’s taking tax money from us hard workers and taking the money away from those who truly do need it.

    All that said, this is an issue much bigger than us and want to see those in power handle these things thoughtfully (though, based off what they’re currently doing I am highly pessimistic). There do need to be some changes, as long as it does not infringe on those who truly need it.

    Reply
    1. femmefrugality Post author

      Thanks for writing such a great post! The comments gave me so much to reply to. I agree that the framework is there for everyone to learn financial literacy, but not necessarily within the welfare program. There are some outreach groups that offer things like this, but to require it as part of eligibility would require some type of program/relationship building that does not currently exist, at least in my area.

      I also agree that whether or not the food was cooked is a moot point. That guy is just a loser. The reason I went into it was because someone had expressed a discrepancy from their own experience.with specific foods that do and don’t qualify.

      I think there are bigger fish to fry before this one. Though if the scammers were caught I would be happy!

      Reply
  2. brian503

    I certainly believe the food stamp system needs better regulations. It’s tough to generalize the whole system, but I’m sure there are some that take advantage, some that work hard to get off the system, and some that truly need the help. Each state has different rules. I think the common goal should be to educate and help people move off the system where ever possible. These requirements should be included in the application or renewal for food stamps, and not just be based solely on income.

    Reply
    1. femmefrugality Post author

      I agree. Though now that I am thinking about it more, what would happen if a parent dropped the ball and didn’t attend their education class or whatever they would be called? How would you handle the children who didn’t have a choice in the matter? And then if you can’t enforce it (because I’m assuming we’d still give the kids food,) how could it be a requirement? I like your idea. I want to flesh this point out.

      Reply
      1. brian503

        I would think the parents would need justification for why they missed the classes. If they were working or out looking for a job that would be okay, just not showing up is not acceptable. There has to be some responsibility taken here.I agree the children should be punished, but we can’t continue to have a free for all type system.

        Reply
        1. femmefrugality Post author

          I so want to agree that responsibility has to be taken by the individual parents. But then I think of crackhead’s kids….those kids should still be able to eat even if their parents are irresponsible drug addicts. But then I guess I would hope that there was some way to get CYS involved. Then there’s the issue of child care for single parents. There already is a way to subsidize child care for single parents who are working. I hope these benefits are extensive, because many, many times wages won’t even cover the childcare bill nonetheless other monthly expenses like rent, food, electricity, etc. I like it. I think it could work if everything was coordinated effectively.

          Reply
          1. becca

            Around here (Michigan), state subsidy for child care maxes out about $2.6/hour (or about $105/week). I saw $2.66/hour for Pell grant eligible students with preschoolers at the local university childcare center (as opposed to community members with toddlers, where it’s $7.3/hour), but most daycare centers are more typically priced (e.g. $200/week).
            This makes it particularly brutal to try to get onto TANF cash assistance, which requires that you put in 40 hours per week of classes, job search, or community service if you are not working 40 hours/week. Cash assistance is, of course, less than $100/week for daycare + $100/week for rent.
            So essentially, unless you can find someone to babysit your child for $2.6/hour or less, or you have no rent payment, there’s a good chance you will go into debt by following the guidelines for cash assistance.
            (in contrast, in Pennsylvania, getting childcare subsidy to contribute *toward* daycare worked really well for getting me through my PhD program. If you make about $20k, childcare subsidy is the difference between making raising a kid manageable and having to drop out of grad school)

            The problem with food stamps is coordinating everything effectively. Someone with a preschooler doesn’t need as much as somebody with a toddler, and I would appreciate it if the system were a bit more reasonable this way. But this is fairly minor, and actual food stamp fraud is absurdly low (~1%). Overall, the program is pretty impressively good, sushi dude notwithstanding.

            Cash assistance, on the other hand, is much more riddled with problems. It’s not just a matter of coordinating everything effectively, it’s a matter of treating people decently and having enough funding. The system is brutal, and ugly, and most maddeningly, utterly utterly stupid.

      2. Mathias

        Regulate the system in the fashion of WIC! True, telling a rich person what he or she may buy wouldnt fly. It’s their personally earned income. But funds generated by a system subsidized by the tax payer for people qualifying for the program is NOT an individuals personal earned income and therefore should be regulated accordingly. Taking into account that if they cannot afford food then they almost certainly do not pay for their families healthcare. How are the 2 related? As we see the decline in the liveable wage versus the coat of living and food we also see a massive decline in the health of the general population. The is more true for the lower income families of today than ever before! FACT. In the latter half of the last century the poor were thin which made sence! But now those same people are among the most obese in the nation and a burden on the health care systems again at the expense of everyone else. Teach a man to fish he eats for a life time once was the saying. Now the practice is, teach a man to fish and you waste a business opportunity! Wic works by providing actual nutrition. While snap is about business and subsidies, rife holes for advantage to be taken maintaining the status qou while keeping the lower socio-economic rungs in their place and feeding the machines of big agri-business and healthless care! Ignorence is a tool but education is a weapon! You must arm yourself lest you fall victim to the misinformation of these systems of control.

        Reply
  3. donebyforty

    I’m hesitant to get into political discussions. But I’ll just say that I’m not particularly concerned with the level corruption or inefficiencies involved with the social program that feeds the poor in the wealthiest country in the world. If it feeds the poor, I am happy. The program represents a tiny sliver of our budget and I would rather that efforts of efficiency, governance, and cost cutting be aimed at larger programs to get big wins. Apply the Pareto principle.

    Reply
    1. femmefrugality Post author

      I hear you. This is probably the singular most political post I’ve written. And AMEN! There are so many other programs that could be examined before this one. I feel like this argument, because it tends to be polarizing, is just something to divert the people’s attention from the bigger programs that could make huge differences if cut.

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    2. A

      I totally agree that it is just not worth it to freak out about some degree of welfare abuse. Stricter rules would mean cutting off some people from welfare who should qualify, but wouldn’t be able to prove it or fall out due to some legal technicalities, and add to the workload on both the “deserving” poor and the case workers. Actually, I would assume that it would be benificial to lighten up the rules in many western countries.

      Reply
  4. Alexa Mason (@SingleMomIncome)

    THANK YOU!! THANK YOU!! THANK YOU!!! I had to delete my Facebook page because I couldn’t hold off on commenting when people posted rude things about others on Food stamps. I would post like five paragraph reasons why they were wrong and they’d always have nothing to say back.

    I find the people who talk shit about others on government assistance have NO IDEA what its like to be in a position to take help. It hurts your pride – you don’t want to do it- you have to do it. The majority of people who are on assistance do not want to be on assistance – they don’t want a free hand out. I get so pissed off when people group Food Stamp recipients into one category because they know one or two people who abuse the system.

    Yes some people abuse the system. MOST do not. Most people only think about the ones who do abuse the system and that’s why they talk so much shit. If you’ve never been in the position or close to being in the position of being on government assistance then you really don’t know what you are talking about. I love this post so much!!

    Reply
    1. femmefrugality Post author

      I’m no longer on facebook, either! Though it was more privacy concerns with me, I certainly don’t miss arguments with people who don’t really know what they’re talking about. (The people on facebook—not John. John is very knowledgeable.)

      I’m so glad you liked it! I was really nervous to actually publish it….thought a lot more people would be on the other side of it and not incredibly happy. Which would be okay. As long as we could talk about our differing opinions like grown-ups.

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    2. Diane

      Amen! The lack of even an attempt at empathy is beyond belief. Especially given most people are one financial hiccup away from disaster and therefore needing government assistance themselves.

      Reply
  5. The Frugal Exerciser

    You can eat healthy on a budget and I have written many articles on that but like you said, we don’t know if she was buying for a kids party or etc that day. I agree that poor money management skills is not a rich or poor issue because how many famous rich people have we known have filed for bankruptcy? I also wouldn’t look down or make nasty comments to anyone receiving government assistance because I might be in that situation one day, I hope not, but I wouldn’t want anyone giving me a lecture. Kudos to that woman who told off that clerk, I hope he or she was embarrassed.

    Reply
    1. femmefrugality Post author

      Oh, he was. Either that or pissed. He turned dark red and just fumbled and grumbled his way through the rest of the transaction.

      Reply
  6. anna

    Incredibly comprehensive and thoughtful post – loved this! I couldn’t agree more with your responses, and I agree that the guy isn’t the norm. If someone like him is highlighted in the media, then that makes me scrutinize how the media plays a part in portraying some people, not the people themselves.

    Reply
    1. femmefrugality Post author

      Absolutely! I’m not the biggest fan of the news source that produced the video in the first place. Seen a lot more drama than news on that station.

      Reply
  7. Shannon Ryan (@TheHeavyPurse)

    A very thoughtful response. In any program, there is going to be abuse and we do need to be mindful in our frustration of those taking advantage of the system, how many other people are not and truly need this assistance. Living in California, it’s truly annoying to think that guy is being shown as the representation of people on food stamps in my state. Forget about the thousands who are not abusing the program. I do agree with your thoughts that if we really want change – i.e. tighten it up so less fraud – we actually need to invest more money in the program, not less.

    Reply
    1. femmefrugality Post author

      Thanks so much, Shannon! Where would you stand on that conundrum—expanding the budget to catch these people or just letting it go since it would put even more of a burden on taxpayers to build the infrastructure to pursue them?

      Reply
  8. femmefrugality Post author

    Becca! I wish I could reply in line, but that thread got too long for me to be able to! Thank you so much for your insightful comments! I think that’s a big thing people don’t consider: these benefits all vary from state to state. I’m on the same page as you as far as coordination goes, and unfortunately I don’t think there’s a whole lot of it in the system the way it’s set up. Here’s to hoping it can change.

    I’ve heard the ~1% quoted for people selling their food stamp benefits to others. That’s good to know that it’s for overall fraud.

    Reply
  9. eemusings

    #4 is a big, big, one IMO. How can you ever be expected to get ahead and stand on your own two feet if you can’t build up some sort of emergency savings buffer? The system is set up so that it’s basically impossible to get out, unless you magically land an insanely high paying job with a big signing bonus, which is highly unlikely for most. I keep pondering ways for some of my partner’s family members to break their own welfare cycle (well, one of the family members, since all the rest of them show no motivation to do any better for themselves) and I just don’t see any clear way out, especially while she’s caring for certain other family members. Transport is a biggie – in our city you need a car, there are very few areas where you could live without a car, and that would only work if you work in certain areas as well. Heck, even for us (a one car household) vehicles have basically been the undoing of us – they’re a money suck.

    Reply
    1. femmefrugality Post author

      I know, right? How are people supposed to get off of the system if you don’t allow them to have metaphorical vehicles in order to do so? Restrictions like that one end up keeping more people on the system long-term, costing the tax payers more money. And most people don’t want to be on welfare for the rest of their life. It’s so sad. Cars are such a money suck. But in many cases a necessary one. (In the US, we have large expanses that have literally no public transport. My city has some, but it’s not sufficient to provide transport to work for many people.)

      Reply
  10. Diane

    Demonising the poor seems to be endemic, worldwide. In Australia we have a lot of the same noise about welfare recipients, “dole bludgers” but in truth, the number of people ‘scamming’ the system is very, very low.

    In retail, you know you’re going to lose stock to the occasional light fingered customer. It’s considered a cost of doing business. The odd welfare scammer is the cost of doing business when your business is supporting those least able to support themselves. Something that every civilised society ought to do.

    You want the government to save money? Tell politicians to pay for their own meals, out of their own pocket.

    You want to get people off welfare? Raise the minimum wage.

    An eye opening documentary everyone should watch is: A Place at the Table.

    Thank you for such a thoughtful post.

    Reply
    1. femmefrugality Post author

      And thank you for your comment! And that’s the truth, isn’t it? How large of a portion of our budget is allotted to politician’s salaries, (in the US’s case) health care, and work expenditures? Going to have to check out that film.

      Reply
  11. Diana

    I love this post! I thought it would be another one of those articles blasting people who use Food Stamps, but I was pleasantly surprised. I live in an urban area, and I see people using Food Stamps almost all the time. These people do not live in luxury, and are using Food Stamps in order to survive and feed their families. I hate it when ignorant people make comments about how Food Stamps recipients are living off the government and stealing from other people’s taxes. That is entirely untrue. Most of the people I see using Food Stamps also use coupons to stretch how much money they receive each month. It’s true that some people abuse the system. I once watched a woman get out of a BMW to wait in line at the welfare office. But all in all some of the people who aren’t qualified to receive food stamps aren’t doing so good either.

    Reply
    1. femmefrugality

      Absolutely! And being on the cusp of qualifying but not quite being there is one of the worst places to be. You don’t quite have enough to get by on, yet you can’t get help. So things get messy financially despite your best efforts until you do qualify. I see a lot of coupon use around here, too. And even dollar store shopping…though I don’t know if I could be so brave!

      Reply
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