EBT Eligibility: Three Steps to Fight Fraud from the Get Go – by Naveen Nukala

Fraud amongst supplemental nutritional assistance program (SNAP) beneficiaries continues to drop, but when even just one percent fraud can equal tens of millions of dollars, it’s no wonder that administrators are so set on eliminating waste to the program’s 20 million households nationwide.

The first step in fraud prevention is to thoroughly verify eligibility. The more fraudsters are kept out of the system from the start, the less harsh is an after-the-fact cure.

Eligibility Fraud Challenges

Challenge One: inconsistencies in calculating EBT eligibility. Under federal guidelines, the maximum gross monthly household income for qualifying participants is set at 130 percent of the poverty level, according to household size. However, how states compute income for benefits eligibility varies – Alaska has special rules that allow for higher benefits in rural areas, for example. Also, the documents required to verify income differ among states. Some of the more populous states access verification resources such as LexisNexis Risk Solutions while some don’t use it at all. As a result, a household might qualify for an EBT card in one state, but not in its neighboring state.

Challenge Two: pressures to verify eligibility quickly. States also are under pressure to reduce their backlog of applications, sometimes more quickly than the stated 30-day waiting period. Applicants in states recovering from disasters such as hurricanes have often lost everything, including the documents required to verify income and meet other eligibility requirements. On one hand, slow response in distributing benefits during disasters easily becomes fodder for negative press articles. On the other hand, rushing through a huge backlog of requests without thorough verification often results in discovering, after-the-fact, that some beneficiaries don’t meet eligibility requirements or are receiving benefits in more than one state. It’s hard to reclaim spent funds.

Enlisting EBT Processors in the Fight against Eligibility Fraud

Step One: reduce duplicate benefits. A coalition of five states – ones often affected by hurricanes – led by Mississippi and supported by a grant from the USDA Food and Nutrition Service – has succeeded in significantly reducing dual participation in SNAP by detecting fraud in real-time. States also can enlist their EBT processors to mitigate cross-border, dual participation fraud. For example, FIS can provide a single point of contact for states to verify that SNAP applicants aren’t attempting to receive duplicate benefits in any of the 31 states that FIS serves.

Step Two: verify real, not just reported, income. Typically, states review documents such as pay stubs, income tax returns, and bank statements to verify income. However, some people are paid by other means and don’t use bank accounts. Available tools to root out the real income of people who, for example, are unbanked but cash their paychecks at a check-cashing merchant include FIS’ ID Verification (IDV).

Step Three: verify that beneficiaries are still living and not fugitives. IDV cross-references more than 23 billion public and proprietary records for identity verification screening. It matches records on elements required for U.S. Patriot Act compliance, verifies that an individual isn’t on the Office of Foreign Assets Control (OFAC) watch list and confirms that the person is still living.

FIS is poised to help states combat eligibility fraud and reduce the current waste of funds that should be directed toward improving benefits for deserving beneficiaries.