Balance soars past $20,000 in SNAP account

The Hawaii system that administers federal Supplemental Nutrition Assistance Program dollars, formerly called food stamps, has allowed at least one recipient to accumulate more than $20,000 in unused benefits.

The Honolulu Star-Advertiser questioned the state Department of Human Services about its SNAP system after reviewing a photo of a local store receipt from Aug. 7 that showed the beneficiary had accrued $20,207.31 in available funds on an electronic balance transfer card.

DHS spokeswoman Keopu Reelitz confirmed last week that the receipt was authentic, but called the case “unusual.”

Most Hawaii EBT card holders promptly use SNAP benefits, which are 100 percent federally funded, Reelitz said. Some 166,807 Hawaii residents, including 85,108 households, received SNAP benefits in July 2017. The average monthly benefit per person statewide was $255.97, for a total of about $42.7 million.

Historically, high balances haven’t been the norm nationally, either. On average, 86 percent of households redeem more than half of their benefits by the second week of receiving them, according to a 2011 report from the U.S. Department of Agriculture. In a typical month, the average household did not spend $7.61 of its monthly issuance and by month’s end had a carryover account balance of $19.09. Less than 6 percent of all households that received a monthly benefit didn’t make a purchase that month.

Reelitz said Hawaii SNAP balances can mount because unused benefits roll forward. Also, benefits are calculated according to household size and there is no cap on what a household can receive, she said. Card carryover balances aren’t capped, but Reelitz said they are expunged and returned back to the state after 12 months of inactivity.

“Generally speaking when someone has a concern about fraud or misuse of benefits we will look into it. The amount in this case is telling us that someone is not using their benefits, which is different than saying they are abusing or misusing them,” she said.

Majority Floor Leader Rep. Dee Morikawa (D, Niihau-Koloa-Kokee), former chairwoman of the state House Committee on Human Services, said DHS has had valid explanations for past SNAP recipients carrying large balances. She said she is confident that DHS’ current “investigation will find out exactly what is going on.”

“I can only assure you that the Department of Human Services enforcement branch is doing a great job now that they are fully staffed and I trust that they will do what is right,” Morikawa said.

Robert Rector, a senior research fellow at the Heritage Foundation, a Washington, D.C.-based conservative think tank, said the state should investigate this case, but that the whole system needs an overhaul.

“Anything with that level of asininity is a symptom of a much larger structural problem,” Rector said. “This example tells me that the program is not at all well-administered and the people who are administering it don’t have any particular incentive to remove waste.”

He said supporting the Trump administration’s proposals to add a work requirement for able-bodied SNAP recipients and to require states, which currently don’t fund SNAP, to provide 25 percent of the program’s support, would go a long way to resolving the program’s problems in Hawaii and elsewhere.

“Setting job requirements weeds out fraud and making states fiscally responsible ensures that they will operate their programs more prudently,” Rector said.

Stacy Dean, vice president of food assistance policy at the left-leaning Center on Budget and Policy Priorities, disagrees.

“What would Hawaii have to give up in order to continue to maintain food assistance — support for public education, health and safety,” said the Washington, D.C.-based Dean. “State budgets are strained and the notion that they could take over is ill-informed.”

Hawaii should investigate high balances, but “it’s not sensible to draw conclusions about the whole program based on one case,” she said.

Dean said the Food and Nutrition Act, which governs SNAP, already makes clear how Hawaii and other states should handle accrued benefits.

“The law says if benefits haven’t been used for 12 months, they are expunged,” she said. “States also have an option after six months of non-use to take accounts offline. The household can still have them, but they would have to explain why they haven’t been using them.”

Dean said Hawaii should avoid knee-jerk reactions, but could look to Massachusetts, which modified its program after discovering a number of high-balance households.

Massachusetts requires case reviews for SNAP recipients who accumulate more than $5,000 in benefits to determine that they need them and that they can access them.

DHS’ Reelitz could not immediately say last week how many SNAP recipients in Hawaii have a balance of $5,000 or more, or if there were any others with accumulated benefits topping $20,000.

In Massachusetts, six months of inactivity renders a client’s benefit inactive and requires a case assessment to get them back. Follow-up after the Massachusetts changes revealed that the vast majority of high-balance holders there were seniors and people with disabilities, Dean said.

The Massachusetts model makes sense, said Hawaii state Sen. Josh Green (D, Naalehu-Kailua-­Kona), chairman of the Senate Committee on Human Services.

“Anyone who has a large amount of money building up on a card should have some follow-up or be checked on to know that they are OK. They could be dead or have had a stroke or (been) incapacitated in some other way,” Green said. “Having said that, SNAP is meant to be a safety net. If some people aren’t using it, let’s find a way to get it to those in need.”

Green said he hopes the high-balance-carrying recipient is an outlier, but will encourage DHS to do a system-wide audit to check for others.

“If they don’t do it, I’ll hold an informational briefing and get data and start looking at utilization,” he said. “We need to make sure that there isn’t waste going on.”

Reelitz said DHS is committed to ensuring SNAP clients get access to the “healthy, nutritious foods that they need.”