Food Stamp Overpayments Add to Concerns Over New DHHS Processing System

May 26, 2016

The Maine Department of Health and Human Services has overpaid nearly $2 million in food stamp benefits, and now the department is attempting to collect that money back from over 3,000 elderly and poor Mainers.

Such payment errors are not uncommon in other states, but the magnitude of this one is rare, and it comes amid the department’s effort to radically overhaul the state’s welfare system.

DHHS Chief Mary Mayhew and the LePage administration have repeatedly vowed to reform the state’s welfare programs. And they’ve made a lot of changes: reducing the amount of time people can receive benefits, hotly pursuing fraud cases and clashing with the federal government over attempts to put photos on benefit cards.

Many of the changes have been politically popular. But, at times, implementation of other changes has been rocky. That has been true of the department’s efforts to automate its application system for food stamps, also known as the Supplemental Nutrition Assistance Program, or SNAP.

Now, over 3,000 SNAP recipients are receiving letters ordering them to repay the benefits the state mistakenly gave them. That could pose a hardship for people who, on average, receive a monthly benefit of about $116.

“What ends up happening is that their food supplement monthly benefits are reduced by 10 percent. And when you’re getting the bare minimum start with and you’re reducing it by 10 percent, that’s very hard to deal with,” says Jack Comart, the litigation director for Maine Equal Justice Partners, an advocacy group for the poor. “For most of us, if we had to reduce our food budget by 10 percent there’s enough flexibility. But for poor people living on the bare minimum, that’s extremely difficult.”

And Comart says that SNAP recipients will have no choice but to pay back the money. The federal government requires it. SNAP is a federal program, but states are responsible for administering it and distributing the funds.

In April, more than 230,000 Mainers have received SNAP benefits totaling more than $21 million, according to federal data.

DHHS officials did not respond to request for an interview, and the department has not specified what caused the error.

Comart believes the change in the application system is to blame. Last year those changes were cited as the reason for slow application processing times that fell well below the federal standard.

The feds issued a sternly worded letter to DHHS, ordering the agency to quicken the pace or face a significant loss in federal funding. DHHS chief Mary Mayhew did not dispute the problem, but she said it stemmed from the department’s efforts to modernize its system.

Comart doesn’t disagree. But, he says, the processing change is likely driving a surge in overpayments — from 600 two years ago to 2,200 last year. While overpayments, and underpayments, are normal for state agencies, the increase in Maine, he says, is unusual.

“The fact that the department was so far behind in processing applications and renewals contributed to the increase in the agency error overpayments,” Comart says.

DHHS told the Bangor Daily News that the agency is typically flexible with payment plans unless a recipient has a court-ordered payment program or has previously been convicted of fraud.

If the state doesn’t receive payment, a recipient could face garnished Social Security benefits or federal income tax returns.