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7.3.1 Benefit Overpayment

7.3.1.1 Overpayment Claims Against Food Units

7.3.1.2 Liability

7.3.1.3 Offsetting an Established Claim Amount

7.3.1.4 Exception

7.3.1.5 Moves

7.3.1.6 15% Local Agency Retention

7.3.1.7 Overpayments Due to Receipt of Tribal Food Distribution and FoodShare in the Same Month

7.3.1.8 Notice of Overissuance (Overpayment)

7.3.1.9 Overpayment Due to Client and Non-Client Error

7.3.1.1 Overpayment Claims Against Food Units

Establish a claim against any food unit that has received more FoodShare benefits than it was entitled to receive. Since the method used to determine the food unit’s income for certification purposes was converted prospective budgeting, that is the method that is to be used for calculating overpayment claim amounts, not actual income received during the overpayment period. Prospective budgeting is calculated by converting a weekly, bi-weekly or semi-monthly payment into a monthly amount. This is the income an applicant or member is expected to receive during the current and future months. Income prospectively budgeted over the claim period should use converted monthly income and expenses (weekly times 4.3, biweekly times 2.15, and semimonthly times 2) when applicable. Do not use actual income to calculate the claim, even if all information is received for the entire overpayment claim period.

 

There are three types of overpayment claims: client error, non-client error, and Intentional Program Violation (IPV). Collect claims for all types of errors, regardless of the date of origin. Only collect the amount of the claim.

 

In claim calculations, disregard income that was not previously reported and was not required to be reported.

 

Historically, DHS has used the terms “overpayment” and “overissuance” interchangeably. As used in this handbook, these terms refer to the same concept.

7.3.1.2 Liability

7 CFR 273.18(a)(4)(i)

 

All adults or emancipated minors who were included** in the food unit, or should have been included in the food unit at the time the overpayment occurred, are liable for the repayment of the overpaid FoodShare benefits. If a liable member moves to another food unit, responsibility of the overpayment is maintained and follows that member to the new food unit.

 

**If someone was included but should not have been included, they are not liable. An example may be a household reporting a change in household composition (someone moving out) and the agency failing to remove the individual. The overpayment still exists, but the person who should have been removed would not be liable.

 

Example 1: Jack and Jake apply for FoodShare in January and include their 22 year old son, Jeff, in their request. Their application is approved and they receive the maximum monthly allotment for an assistance group of three. Jeff calls the agency in September to apply for FoodShare and is told he cannot receive the benefit because he is already receiving FoodShare on his parents’ case. Jeff tells the worker that he just moved back to Wisconsin after graduating from college and has been out of state for the last four years. Once the IM worker determines that an overpayment exists, the worker should create an overpayment claim with Jack and Jake as the liable parties. Jeff is not liable because, although he was included in the assistance group, he did not reside in the household during the overpayment period and is not responsible for the overpayment.

 

 

Liability for a FoodShare overpayment is not split evenly among liable parties. Liable individuals are responsible for 100% of the overpayment until the debt is repaid in full.

 

7 CFR 273.18(a)(4)(ii)

 

An authorized representative applying on behalf of a resident of a drug or alcohol treatment center, or a group living arrangement (GLA) (3.2.1.5 Group Living Arrangement), is responsible and liable for any FoodShare overpayments to the member due to misrepresentation or IPV which the authorized representative knowingly commits in the certification of treatment centers, GLA residents, or individual representatives.

 

Example 2: Susan is receiving FoodShare, and her 21-year-old daughter Jane lives with her. Because Jane is Susan's daughter, she must be included in the FoodShare determination with her mother (3.3.1.3 Relationship Rules), but the agency failed to include her. The overpayment must be calculated using Jane’s income and information. Both Jane and Susan are liable for the overpayment.

 

Example 3: Ellen is receiving FoodShare for herself and her two children but does not report that the father of the children lives in the home. The father has earned income, which causes an overpayment of benefits. The father must be and should have been added to the case (3.3.1.3 Relationship Rules) as if the change was reported timely. He is equally liable for the overpayment of FoodShare benefits.

7.3.1.3 Offsetting an Established Claim Amount

7 CFR 273.18(g)(3)

Offset an existing FoodShare overpayment (claim) with the calculated FoodShare underpayment (supplement) amount when both situations exist. Offset the claim against any amount that has not been supplemented to the FoodShare assistance group. An IM worker may offset a suspended or terminated claim amount against an underpayment amount.

7.3.1.4 Exception

An initial allotment and a DSNAP benefit allotment must not be reduced to offset a claim. This includes retroactive initial allotments. Person Adds are not initial allotments. Therefore, the IM worker can offset claims against person add supplements. Offset the entire supplement, if the claim balance is more than the supplement. If the claim balance is less than the supplement, CARES will correctly apply the amount of supplement that will zero out the claim and issue the remainder of the supplement as a benefit to the member.

7.3.1.5 Moves

7 CFR 273.18(i)

Pursue collection of FoodShare claims even if the food unit moves out of a county/tribal area or out of Wisconsin.

 

The agency that overpaid benefits to the FoodShare assistance group has the first opportunity to collect an overpayment. If the agency does not act promptly to collect, and the group moves, the new agency can begin collection action. The new agency must contact the agency that overpaid the benefits to see if they intend to pursue collection.

7.3.1.6 15% Local Agency Retention

When the cause of overpayment is client error, the local agency that establishes the claim may keep 15% of any collection that is made against that claim.

 

When the cause of overpayment is an IPV, the local agency may, in some circumstances, keep 15% of any collection against the claim.

7.3.1.7 Overpayments Due to Receipt of Tribal Food Distribution and FoodShare in the Same Month

A FoodShare assistance group cannot receive commodities from a Tribal Food Distribution program (3.11.1) and FoodShare at the same time. Make a claim against any group that receives FoodShare in the same month it also participates in a Tribal Food Distribution Program. If the group receives:

 

  1. FoodShare and then receives Food Distribution Program commodities in the same month, the Food Distribution agency must process the claim.

  2. Food Distribution Program commodities and then receives FoodShare in the same month, the FoodShare agency must process the claim

7.3.1.8 Notice of Overissuance (Overpayment)

7 CFR 273.18(d)

A Notice of FoodShare Overissuance, F-16028, a completed FoodShare Wisconsin Under/Overissuance Worksheet or FoodShare Wisconsin Overpayment Calculator worksheet, F-16030, and a FoodShare Repayment Agreement, F-16029, must be sent to the member for all types of claims.

 

Mail all correspondence to the last known address reported to the agency, unless through investigation it is verified that the member no longer lives at that address. In this instance, agencies must demonstrate and document the due diligence process in obtaining the best known address for the member.

 

Attempt a personal contact with the food unit in the initial collection efforts. The agency may request the repayment be brought before the court or addressed in an agreement reached between the prosecutor and accused person.

 

All Repayment Agreements are due on the 25th of the month. In all cases, if the FoodShare assistance group is receiving FoodShare benefits, recoupment will take place. If the member signs and returns the repayment agreement, they are expected to make a monthly repayment in addition to the recoupment from the FoodShare benefit allotment.

 

If FoodShare benefits are not being issued and the member does not sign and return the FoodShare Repayment Agreement, dunning notices will be issued through CARES. The local agency may also pursue other collection action. The State of Wisconsin Public Assistance Collection Unit may also pursue collection action.

 

If the FoodShare assistance group fails to make a scheduled payment or underpays, send a dunning notice stating that the group must contact the local agency to renegotiate the payment schedule.

 

The FoodShare assistance group must either:

  1. Negotiate a new schedule, or
  2. Pay the overdue amount and continue to pay based on the previous schedule.

7.3.1.9 Overpayment Due to Client and Non-Client Error

Federal regulations require that corrective action must be taken to establish a claim for any error discovered through a Quality Control (QC) review, regardless of the size of the error. Failure to take timely corrective action may result in liquidated damages against the agency in the amount of $250 or more.

 

A client error occurs when the food unit unintentionally:

 

A non-client error occurs when the state or local agency:

 

Do not establish a claim if:  

 

Example 4: Mary’s W-2 payment ended and she became eligible for TFS. CARES incorrectly set a 12 month certification period instead of a five month certification period. Because Mary did not receive a timely notice that her TFS benefits were ending after the fifth month, she would not be responsible for paying back any benefits that were issued incorrectly after the fifth month.

 

Do not establish a claim if Social Security, SSI, or Wisconsin Unemployment updates from data exchange are incorrect. These updates cannot be recovered or found in error because the information comes from a trusted third party source.

 

Expedited Issuance

In general, expedited FoodShare is issued on the best information available and not recoverable. There are certain situations where expedited benefits can be recovered. In instances where an individual would not be eligible for expedited issuance and the agency either incorrectly entered information or failed to include known information (data exchange information, for example), resulting in expedited eligibility, the agency can recover. If the agency establishes an intentional program violation (IPV), the agency can recover benefits. For client errors, do not pursue recovery of expedited benefits since the issuance is based on best available information and the application can only pend for identity prior to the expedited determination.

 

 

This page last updated in Release Number: 21-04

Release Date: 08/30/2021

Effective Date: 08/30/2021