Permanent Disqualification from SNAP
Permanent disqualification from the Supplemental Nutrition Assistance Program (SNAP) is a big problem. It doesn’t just limit your store’s ability to accept EBT, it impacts your personal credit and reputation for the rest of your life. To add insult to injury, it will also result in a Transfer Civil Money Penalty (TCMP) fine if you sell your store to someone else after you receive a disqualification.
SNAP Permanent disqualifications can be prevented, and can be addressed and mitigated. The trick is to be organized, prepared, and careful in how you handle these types of disqualifications.
When are Permanent Disqualifications Issued?
The USDA issues permanent disqualifications under only a handful of circumstances: (1) a violation of the SNAP rules, specifically SNAP trafficking; (2) owner or manager ineligibility under the SNAP authorization guidelines; or (3) repeated violations of the SNAP rules and regulations. Any of these can land you on the permanent disqualification list with as little as ten (10) days’ notice.
SNAP trafficking is the most common cause of a permanent disqualification. In these cases, the USDA has determined that your store has exchanged cash for SNAP benefits (or something similar), and the Department decided they don’t want you to participate in the program anymore. This type of case can be the result of undercover investigations or data analysis. However, once the decision has been made that trafficking occurred, permanent disqualification is the most likely outcome. The USDA has very little flexibility on this point.
Owner and manager ineligibility is a common problem in SNAP authorizations and SNAP reauthorizations. Though this isn’t a disqualification on grounds of a violation, the effects are the same. Usually, ineligibility is the result of past criminal convictions, or disqualifications from reciprocal programs like WIC.
Repeated SNAP violations aren’t as common, but under the SNAP rules, three suspensions from the program results in a permanent disqualification. This means that if your store sells ineligible items and is suspended three times, it turns into a disqualification. This type of disqualification is rare because most stores that are suspended once aren’t likely to be suspended again.
What are the Impacts of a SNAP Permanent Disqualification?
The most obvious result is that your EBT machine is going to be turned off. The SNAP regulations and the statute state that a store owner/manager who has been disqualified from the program is never eligible to accept SNAP ever again. We have checked with the Department to see if there are any exceptions, and the answer to that is “no, there are no exceptions.” This means that a disqualified owner/manager can never again participate in a store that has SNAP, except as a clerk or other employee who has no authority.
Other than the loss of the EBT machine, the next issue is the inclusion on the government’s SAM list. This is the System for Awards Management disqualification, debarment and suspension list. At the moment, inclusion on this list is automatic for store owners with SNAP permanent disqualifications. The effects of inclusion on the list vary. It makes it impossible to get a job with a private company that does work with the federal government (like pharmacies, hospitals, government contractors), and it makes it difficult to get home loans and SBA loans. Inclusion on the SAM list also shows up in other types of credit checks and criminal background checks.
The last impact of a permanent disqualification is the issuance of the Transfer Civil Money Penalty (TCMP). This section only applies to SNAP trafficking disqualifications. Typically $11,000 per trafficking infraction, this is a bill that gets sent to you after you sell your store. There is no time limit on this. If you sell your store 30 years after a disqualification, you’ll still receive the fine.
How To Avoid a Permanent Disqualification
The most important part of avoiding a SNAP disqualification is employee training. Good EBT and SNAP retailer training programs serve to do two things: (1) teach your employees how to avoid silly mistakes; (2) protect your store by qualifying for a Civil Money Penalty (different than a TCMP) in lieu of a permanent disqualification.
We participated in the development of Syllabi’s EBT Training Course, which is administered through cell phones and is translated into several different languages. It’s cheap, it’s thorough, and it prevents permanent disqualifications.
However, if you’ve already received a Charge Letter, the training won’t prevent a permanent disqualification (even if it helps how the Department views your store). Accordingly, if you’ve already received a charge letter, the right answer is to fight the charges. Hiring our firm will give you access to our proprietary strategies and library of case materials from the hundreds of cases that we have defended over the years.
The USDA does not negotiate SNAP permanent disqualification cases. Unlike many state agencies, the goal of the USDA isn’t to promote compliance with your store, but rather to make an example out of you. They do not value fines, only disqualifications.
If you have received a letter from the USDA, don’t wait. Avoiding a permanent disqualification is difficult and needs to be handled quickly by professionals who understand how to win your case. Call us today for your free consultation, 1-833-SNAP-Law.