The Supplemental Nutrition Assistance Program (SNAP) has been the focus of many news stories this week.  Due to the federal government shutdown that began October 1, the U.S. Department of Agriculture (USDA) estimates that approximately 42 million individuals across the United States will not receive their SNAP benefits starting November 1st. This includes approximately 1.4 million people in North Carolina. Even if the impending possibility of unpaid SNAP benefits does not come to fruition or otherwise resolves, a number of changes are coming for SNAP in North Carolina as a result of the “One Big Beautiful Bill Act” (H.R. 1),” signed into law by President Trump on July 4, 2025. This post provides a brief primer on how SNAP is administered and funded in North Carolina, the impact of the current federal government shutdown and pending litigation on SNAP, and the changes occurring to SNAP as a result of H.R. 1.

What is SNAP and how is it funded in North Carolina?

SNAP is a federally funded program that provides food assistance to low-income individuals and households. In North Carolina, this program is referred to as Food and Nutrition Services (FNS) and was historically known as the “food stamp” program. For purposes of this post, I’ll be using the term SNAP to refer to the program. Currently, a family of three generally must be earning less than $2,221 in net income per month to be eligible for SNAP benefits. According to NCDHHS, 581,412 of North Carolina’s SNAP participants in September 2025 were children and approximately 151,793 of North Carolina’s SNAP participants in September 2025 were elderly adults over the age of 65.

Eligible families and individuals receive SNAP benefits through a monthly allocation on an Electronic Benefit Transfer (EBT) card, which works similarly to a debit card and can be used to buy groceries.  The federal government pays the full cost of SNAP benefits, meaning, the full amount that gets loaded on to the EBT card each month for eligible individuals. Currently, the federal government also pays half of the administrative costs for operating the SNAP program (though this will change due to H.R. 1, as explained in more detail below).  In North Carolina, counties now pay the other half of those administrative costs (see NCDHHS budget estimates here).

How is SNAP administered in North Carolina?

In North Carolina, the N.C. Department of Health and Human Services (NCDHHS) is responsible for supervising SNAP, while each county department of social services (DSS) is responsible for administering and operating SNAP at the local level. See G.S. 108A-51. A family or individual that wants to apply for SNAP benefits must do so through their county DSS, which is responsible for determining whether that family or individual is eligible for SNAP. G.S. 108A-52. Many elements of the program, including eligibility criteria, are largely determined by federal statutes and regulations. Based on those federal laws, NCDHHS is responsible for developing policies that counties must follow when administering the SNAP program.

Why are federal funds not available for SNAP benefits starting November 1?

On Oct. 10, the USDA directed NCDHHS and other state agencies across the country to delay issuing November SNAP benefits because of the federal government shutdown. On Oct. 24, the USDA sent a notice to states stating that it would not use its federal contingency funds—approximately six billion dollars—to fund regular SNAP benefits in November, explaining that these funds are intended for use in emergencies through the Disaster SNAP program. The USDA also notified states that they would not be reimbursed by the federal government if they use state funds to cover the cost of SNAP benefits during the lapse.

What happens next?

The answer to this question will depend on the outcome of ongoing litigation and congressional negotiations. Over a dozen state attorneys general (including North Carolina’s Attorney General) and three state governors filed a lawsuit on Oct. 28, seeking a declaratory judgment that the USDA is required to furnish the SNAP benefits that have already been calculated and determined by plaintiffs’ state agencies for November 2025 (the complaint is available at this link). The complaint in the lawsuit alleges that the USDA has six billion dollars in a contingency reserve available to fund benefits and State administrative costs. Further, the plaintiffs argue that the USDA’s claim that these contingency funds cannot be used to fund SNAP benefits during a federal government shutdown is contrary to the plain text of the Consolidated Appropriations Act, which states that the reserves are for use “in such amounts and at such times as may become necessary to carry out program operations” under the Food and Nutrition Act of 2008. According to NCDHHS’s declaration filed in the suit, the lapse in SNAP benefits may lead to an estimated $224,000,000 loss for North Carolina’s grocers, retailers, and stores (the declaration estimates that “between 11% to 18% of North Carolina’s grocers sales are from SNAP redemptions, with bigger impacts in rural communities.”

A separate lawsuit was filed in federal court in Rhode Island on Oct. 30 by a number of nonprofit organizations, businesses, and municipalities (including Durham, North Carolina), asking the court to compel the USDA to release available funds as necessary to pay SNAP benefits to eligible participants.

Rulings were issued in both lawsuits today. In the Massachusetts case involving a coalition of state attorneys general and state governors, Judge Indira Talwani found that the USDA and other defendants “erred in concluding that USDA is statutorily prohibited from using the contingency reserve to fund SNAP benefits during the pendency of the lapse in appropriations.” The judge ordered that by Monday, Nov. 3, the USDA and other defendants must advise the court whether they will authorize at least reduced SNAP benefits for November and, if so, provide their timeline for determining whether to authorize only reduced SNAP benefits using the contingency funds or to authorize full SNAP benefits using both the contingency funds and additional available funds. In the lawsuit filed in Rhode Island, Judge John J. McConnell Jr. ruled from the bench that “USDA must distribute the contingency money timely, or as soon as possible, for the November 1 payments to be made.”

How will the “One Big Beautiful Bill Act” (H.R.1 ) impact SNAP in North Carolina starting in November?

Separate and apart from the immediate impacts of the federal government shutdown, some of H.R. 1’s changes to SNAP will begin to impact North Carolina on November 1. Some significant changes went into effect on July 4, 2025 when H.R. 1 was signed into law, but the USDA released guidance in September stating that states would be held harmless for quality control purposes for 120 days from the implementation date of these changes. This means that states, including North Carolina, will begin being held accountable for complying with these July 4 changes starting November 1. These changes include:

Changes to Work Requirements

Absent an exemption, individuals who are able to work are generally required to work or engage in work training in order to receive SNAP benefits. Able bodied adults without dependents (ABAWD) are required to work or participate in a work program (or some combination of the two) for at least 80 hours per month in order to receive SNAP benefits for more than 3 months in a 36-month period. This is referred to as the “ABAWD work requirement.” H.R. 1 changes the existing exceptions from the ABAWD time limit, so that more individuals will now be subject to work requirements. Specifically, H.R. 1:

• Increases the upper age exception so that only individuals 65 and older are exempt (previously, only ABAWD’s who were aged 18-54 had to meet the work requirements).
• Changes the exception from the ABAWD work requirement for those who are responsible for caring for dependent children. Previously, an individual was exempt from work requirements if they were responsible for caring for a child under 18 years of age. Now, this exception is limited to those adults with a child under 14 years of age.
• Removes work exceptions for homeless individuals, veterans, and individuals ages 18-24 who aged out of foster care at age 18 or older. These work-requirement exceptions were created through the Fiscal Responsibility Act of 2023, which I wrote about previously in this blog post. Individuals in these categories will now be required to meet the ABAWD work requirement.
• Establishes new exceptions to the ABAWD work requirement for Indians, Urban Indians, and California Indians, as those terms are defined in the Indian Health Care Improvement Act.

Some adults in North Carolina will be newly subject to work requirements as a result of these changes. Given that counties are responsible for shouldering 50% of the costs for the local administration of SNAP in North Carolina, these changes in work requirements may lead to an increase in county social services costs due to added administrative work for county DSS staff. However, if fewer people participate in the program as a result of the work requirements or other eligibility requirements described below, it is possible that may ultimately reduce some of the added administrative burden on counties.

Changes to Non-Citizen Eligibility

Unauthorized noncitizens—sometimes known as undocumented immigrants—are not and have never been eligible for SNAP benefits. But prior to H.R. 1, several categories of noncitizens with lawful presence in the United States were eligible to receive SNAP benefits if they otherwise met financial eligibility and work requirements. This included refugees, individuals granted asylum by the United States, victims of severe human trafficking, and Iraqi and Afghan individuals with Special Immigrant Visa status (a program created to offer legal status to individuals who worked with the U.S. government in Iraq and Afghanistan)—all categories of individuals with lawful presence and authorization to work in the United States. Now, under H.R. 1, SNAP eligibility is limited to those who are citizens, lawful permanent residents (green card holders), Cuban and Haitian entrants, or individuals allowed to live and work in the U.S. under the Compacts of Free Association (COFA). This means that refugees, asylees, victims of severe human trafficking, and Iraqi and Afghan individuals with SIV status are no longer eligible for SNAP benefits.

How will the “One Big Beautiful Bill Act” (H.R.1 ) impact SNAP in North Carolina in 2026 and beyond?

Other impacts of H.R. 1 are not as immediate but will have a more pronounced effect on state and county budgets over the next several years. 

Administrative Cost Sharing

As described earlier, the federal government funds 50% of the costs of administering the program (in North Carolina, counties pay the other 50%). Beginning in federal fiscal year 2027 (which starts Oct. 1, 2026), the federal portion of administrative SNAP costs will decrease from 50% to 25%, meaning states will become responsible for 75% of the administrative costs. It is currently unclear how much of this 75% nonfederal share of administrative costs North Carolina will require counties to pay. Per G.S. 108A-87(a), the nonfederal share of the annual cost of each public assistance and social services program “may be divided between the State and counties as determined by the General Assembly and in a manner consistent with federal laws and regulations.”

State Matching Funds Requirement for Benefit Costs

Historically, the federal government has funded 100% of the direct cost of SNAP benefits (the funds that are loaded on to individual EBT cards and used to pay for groceries). Under H.R. 1, beginning in federal fiscal year 2028 (Oct. 1, 2027), state agencies will be required to pay a percentage of SNAP benefit allotments if they have a SNAP Payment Error Rate above 6%. “Payment error rate” refers to the percentage of SNAP benefit payments that were made incorrectly based on a sample of participating households, which includes both overpayment and underpayment. See 7 USC § 2025(c)(2). According to USDA data, in fiscal year 2024, the national average of state payment error rates was 10.93% (North Carolina’s rate was 10.21%). Only eight states had an error rate of under 6%.

Under existing law (prior to H.R. 1), any overpayments of SNAP benefits are already required to be recouped and repaid to the federal government. See 7 C.F.R. Part 276. H.R. 1 now goes a step further by, in effect, penalizing states with error rates above 6% by requiring them to shoulder some of the direct cost of SNAP benefits. The state cost share will be 5% of benefits costs if error rates are between 6 to 8%, 10% of benefits costs if error rates are between 8 to 10%, and 15% of benefits costs if error rates are over 10%. For fiscal year 2029 and each fiscal year thereafter, to calculate the applicable state share, the USDA will use each state’s payment error rate for the third fiscal year preceding the fiscal year for which the state share is being calculated (essentially, looking back to the error rate from three years prior to determine cost sharing for the upcoming year). NCDHHS estimates that North Carolina’s state cost share could be around $420 million per year based on the state’s current payment error rate and current SNAP enrollment.