7.4.1 Benefit Underpayment

7.4.1.1 Supplement Benefits Due to Underpayment

7.4.1.2 Calculating the Amount of the Underpayment

7.4.1.1 Supplement Benefits Due to Underpayment

7 CFR 273.17 (a) and (b)

7 CFR 273.17(e)

Supplement FoodShare benefits when a FoodShare food unit received fewer benefits than it was entitled to receive. Only supplement benefits if the food unit did not cause the underpayment. Do not supplement benefits if the underpayment occurred more than 12 months before the month the underpayment is discovered.

Supplement benefits even if the FoodShare assistance group is currently ineligible. The food unit does not need to request the supplement. Supplement benefits as soon the underpayment is discovered.

The local agency servicing the FoodShare case handles the correction if the case is receiving FoodShare. If the case is closed, the local agency that last serviced the case corrects the error.

Supplement benefits for a member disqualified due to an IPVIntentional Program Violation only if the disqualification is reversed. Compare the allotment the FoodShare assistance group received with what it would have received if the disqualified member had participated, and supplement the difference.

IM workers must issue the appropriate supplement benefit as soon as possible, but always by the 10th day of the month the increase in benefits is effective. Issuing supplemental benefits prior to the QC sample pull (1st Saturday of each month) may result in the case being correct for a QC review rather than in error. If a member is already getting benefits and requests a hearing before the benefits change, the assistance group can keep getting the same benefits until the hearing officer makes a decision. If the hearing officer decides that the agency was right, the assistance group may need to return the extra benefits received after the benefits were supposed to change.

7.4.1.2 Calculating the Amount of the Underpayment

7 CFR 273.17(d)

Supplement the difference between the issued allotment and the correct allotment. Issue the supplemental benefits in addition to the FoodShare assistance group's regular allotment. Consider the food unit’s reporting requirements when calculating the underpayment. Do not use income, expenses, or changes in income and expenses that were not reported and were not required to be reported.

The system will allow a worker to offset the supplement amount, as long as it is not an initial allotment.

If the FoodShare assistance group was eligible but received an incorrect allotment, calculate the underpayment amount (supplement) only for those months the group was participating in the program.

If the FoodShare assistance group was found erroneously, determine the date the ineligibility began based on the following:

Incorrect Action Taken	Underpayment Month(s) Outcome
Incorrect denial or delayed application	Use the application month
Terminated erroneously	Use the month the loss first occurred
Incorrect denial of renewal	Use the month following the expiration of the certification period

Calculate the underpayment amount for each month the FoodShare assistance group was, or should have been, eligible. Use the food unit's income and expenses reported or required to be reported for each month of the adjustment period. Benefits cannot be supplemented beyond 12 months from the month the underpayment is discovered.

Example 1: On May 22, 2017 an IM worker discovers that benefits had been underpaid since February 2016. The IM worker counts back 12 months from May 2017 and supplements benefits from June 1, 2016 to May 31, 2017.

To calculate an underpayment:

Review the income and/or expenses in error. Do not review income and/or expenses that were not the cause of the error.
Use only the income and/or expenses that were reported or were required to be reported.
Request any verification necessary to determine correct eligibility and benefit amounts. Do not re-verify income and/or expenses that were not found in error. If requested verification is not provided in 10 days, do not issue a supplement for the months the requested verification would have impacted eligibility or benefit amounts.

Example 2: On June 10, Brian’s IM worker discovers that she did not allow Brian the full dependent care deduction that he was eligible to receive since February 1. The IM worker uses the full dependent care deduction of $200 per month to determine the difference between what Brian received and what he should have received from February to June. The IM worker does not request verification of Brian’s income and other expenses because they were not found in error.

7.4.1.3 Notice of Underpayment

CARES will issue a notice to food units at the time a supplement has been issued. The notice will include:

The reason for the supplemented or replaced benefits,
The supplemental benefit amount,
Any amount of the supplement that was applied to offset an overpayment claim,
The remaining amount of supplemental benefits the assistance group will be issued on the QUEST card after the offset has been applied,
Information regarding the QUEST card,
A list of key contacts,
Information regarding the food unit’s right to request a fair hearing.
FoodShare rights and responsibilities, and
USDA nondiscrimination statement.

If the documents to support eligibility for supplemental benefits are not obtained, the food unit may provide an affidavit explaining why it is eligible. The affidavit is signed under penalty of perjury. The local agency, a food unit member, or the food unit member's designee may draft the affidavit.

7.4.1.4 Method of Supplementing

7 CFR 273.17(f) and (g)

Issue a supplemental benefit allotment to correct the underpayment, regardless of current eligibility. If the FoodShare assistance group's composition has changed, supplement benefits to the group containing the most FoodShare assistance group members when the loss occurred. If you cannot find or determine the group with the largest number, supplement benefits to the primary person at the time of the loss.

Document your calculations and the reason for issuing a supplement in the case comments.

This page last updated in Release Number: 16-01

Release Date: 05/31/2016

Effective Date: 05/31/2016