Last week, the U.S. Department of Agriculture (USDA) published a proposed rule on the suspension of Supplemental Nutrition Assistance Program (SNAP) benefits to retailers. The proposed rule codifies a provision of the Food, Conservation, and Energy Act of 2008 that authorizes USDA to suspend the payment of redeemed SNAP benefits to retailers pending administrative action to disqualify them for fraudulent activity. Currently, the Food and Nutrition Service (FNS) sends a letter of charges to retailers suspected of fraudulent activity and gives them an opportunity to respond before making a determination on disqualification. During this time, the retailer continues to receive SNAP benefits. USDA is proposing that FNS immediately suspend unsettled benefits to retailers that are suspected of engaging in flagrant trafficking violations, among other changes. The proposed rule may have some cost impact on state agencies whose contracted electronic benefit transfer (EBT) systems need enhancement or do not have the functionality necessary to hold SNAP benefit payments. USDA anticipates working with state agencies and EBT contractors, and is seeking comments regarding necessary system changes, costs, timelines for functional ability to hold unsettled funds, alternative processes for suspending funds and any other associated challenges. Comments must be submitted by April 23, 2013.

Link: Proposed Rule