Permanently Disqualified from SNAP – Is There Any Recourse?

Permanently Disqualified from SNAP – Is There Any Recourse?

Being permanently disqualified from the Supplemental Nutrition Assistance Program (SNAP) can be devastating for retail food stores and farmers markets. But is there any way to fight back against disqualification? This article examines the SNAP disqualification process, reasons for permanent disqualification, and whether there are viable legal defenses or alternatives.

SNAP Disqualification Basics

The Food and Nutrition Service (FNS), part of the U.S. Department of Agriculture (USDA), oversees SNAP and can penalize retailers for program violations. Penalties include:

• Disqualification from SNAP for a set period
• Permanent disqualification
• Monetary fines
• Barring “responsible officials” from future SNAP participation

Disqualification means a retailer’s SNAP authorization is revoked and they can no longer accept EBT cards. It can be temporary (6 months to 10 years typically) or permanent. Fines allow avoiding disqualification in certain cases. Barring responsible officials prevents individual managers from working for other SNAP retailers.

Reasons for Permanent Disqualification

Permanent disqualification is reserved for the most serious SNAP violations:

1. Trafficking – Exchanging cash for EBT benefits. This includes:
   • Direct trafficking – Giving customers cash for their SNAP benefits.
   • Indirect trafficking – Buying inventory from customers using SNAP benefits.
2. Multiple violations – 3+ sanctions results in permanent disqualification.
3. False information – Knowingly providing false info on SNAP application.

Trafficking is the main trigger for permanent disqualification. Both direct and indirect trafficking are prohibited. Retailers cannot give customers cash in exchange for EBT benefits, or buy inventory from customers using SNAP benefits. Doing so even one time can lead to permanent disqualification.

Getting hit with SNAP sanctions 3+ times will also lead to permanent disqualification, even if none of the violations involved trafficking. Providing false information on a SNAP application that impacts eligibility can also result in permanent disqualification.

The Disqualification Process

Here are the steps in a civil SNAP disqualification proceeding:

1. Charge letter – FNS sends a letter alleging violations and potential penalties.
2. Response – Retailer can respond within 10 days to explain or contest the allegations.
3. Final determination – FNS reviews response and issues a final decision on disqualification/fines.
4. Appeal – Retailer has 30 days after final determination to appeal in court.

The process starts with FNS sending a charge letter outlining the alleged SNAP violations. The retailer then has a short window to respond and make their case. FNS reviews the response and decides on a penalty, communicating the final determination to the retailer. If dissatisfied, the retailer’s last option is filing an appeal in federal or state court within 30 days.

Defending Against Permanent Disqualification

Successfully defending against a permanent SNAP disqualification is very difficult. Still, here are some potential arguments:

Contesting the allegations

The retailer can argue the facts and deny committing trafficking or other SNAP violations. However, FNS often has extensive documentation like transaction data, undercover investigations, and fraud hotline tips supporting the allegations. Simply denying the charges is usually not enough.

Compliance policy defense

For permanent disqualification based on multiple sanctions, retailers can potentially avoid disqualification by showing they implemented an “effective” compliance policy to prevent SNAP violations. However, the compliance policy must be concrete, established before violations occurred, and actively enforced.

Hardship argument

Retailers can argue disqualification would create undue hardship for SNAP recipients who rely on the store for food access. USDA may decide to impose a fine rather than disqualification to avoid harming SNAP customers. However, fines can be steep, up to $100,000 per violation.

Trafficking was unintentional

Retailers can try claiming trafficking violations were unintentional or the result of misunderstandings. However, USDA typically takes a strict liability approach – retailers are responsible for all violations regardless of intent.

Violations were minor/isolated

Retailers may argue SNAP violations were minor or isolated incidents unlikely to reoccur. This can potentially help for lesser sanctions, but is unlikely to overcome permanent disqualification for trafficking or repeat violations.

In general, retailers face an uphill battle contesting permanent disqualification. Preventing violations in the first place through training, monitoring, and deterrence is critical.

Alternatives to Disqualification

Two alternatives to disqualification exist but both have major limitations:

Civil monetary penalties

As mentioned, FNS can impose fines instead of disqualification to avoid hardship in some cases. However, fines are often steep – up to $100,000 per violation. High fines can put retailers out of business, so disqualification may be preferable.

Permitting purchase of store

SNAP rules allow retailers subject to permanent disqualification to sell their store under certain conditions. However, the buyer must be completely independent of the seller, which is hard to establish. The store’s inventory and facilities must also be totally overhauled, an expensive endeavor.

So while alternatives exist, successfully avoiding permanent SNAP disqualification remains extremely difficult. For most retailers, the best recourse is preventing violations before they occur.

Key Takeaways

• Permanent SNAP disqualification is reserved for the most serious violations like trafficking.
• Contesting permanent disqualification is very difficult but some limited defenses exist.
• Alternatives like fines or selling the store also have major limitations.
• Prevention through training, monitoring, and deterrence is the best recourse.