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IMA POLICY MANUAL
PART VIII: CASE MAINTENANCE
Chapter 6: Overpayment and Underpayment
Reporting Overpayment 6.4.4
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The SSR must submit the following information on Form 726, Report of Overpayment:
- identifying information on the recipient (minimally name, SSN, and case number)
- the day, month, and year the overpayment was discovered
- the type of overpayment alleged
- the time period covered by the claim
- the reason for the overpayment
- the signature of the supervisor who reviews the submittal.
The SSR must also submit documentation that supports the overpayment claim along with a copy of the case narrative that explains the reason for the overpayment and records when the overpayment was discovered.
The documentation must include:
- copies of any recertification or application forms completed during the period of the overpayment
- any case record documentation that verifies that the customer had contact with DHS during the period of the overpayment, but failed to report the change
- verification of monthly income, including the start and end dates of employment, if the income was earnings.
Overpayments are calculated for period not to exceed 12 months prior to the month in which the overpayment is discovered, except in situations where the SSR suspects that a client has a possible IPV or fraud overpayment. In these instances, the SSR must submit wage verification along with the recertification forms for the entire period of the suspected IPV, provided that the entire period does not exceed six years from the date the overpayment was discovered.
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Ms. Jenkins receives TANF. In July, 1999, she found a job, but never reported this change to her caseworker. Ms. Jenkins has recertified every six months from 1999 through 2004. In January 2005, her caseworker discovers that Ms. Jenkins is employed and has received unreported earnings since July 1999. The caseworker suspects an IPV. When the caseworker submits the TANF overpayment, she will submit a copy of the wage verification showing all earnings received since Ms. Jenkins started work and each recertification/application form that Ms. Jenkins completed for the period 1999 through 2004.
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The SSR must complete the Possible Claims (POCL) screen in ACEDS. The SSR must also compile and submit to the Overpayment Unit a claims package that includes:
- the Form 726, Report of Overpayment, signed by a Supervisor
- a printout of the POCL screen
- all required documentation that supports the claim.
Additional information shall be kept by the Overpayment Unit in the claim record such as:
- the method of recovery
- overpayment notices and billing records
- the amount of the overpayment recovered to date.
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| ALL |
Persons are underpaid if they do not receive the benefits for which they are eligible (i.e., a recipient of public assistance receives a payment or series of payments in an amount less than that for which the recipient is eligible).
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| TANF |
TANF Underpayments cannot be corrected for more than 12 months prior to the date whichever of the following has occurred:
- The recipient requested correction of benefits.
- The date the agency is notified or otherwise discovers that a loss to a group has occurred.
If both occurred, the underpayment shall be corrected for the 12 months prior to whichever occurred earlier.
Underpayments are not corrected when a recipient fails to timely report a change in circumstances except in cases of the addition of a mandatory group member such as a newborn. If a recipient reports the addition of a mandatory group member (such as a newborn), the underpayment is corrected regardless of the timeliness of the report (see Section 1.7: Adding a Newborn in Part IV).
Mr. Johnson and his two children receive TANF. Mr. Johnson works and earns $350 per month. Mr. Johnson loses his job in October but does not report the loss of income until December. No underpayment correction is issued for the underpayment that occurred in October, November or December. January benefits must reflect the lost income. If there is insufficient time from the date of the reported change to affect January's benefit amount, a supplemental payment must be issued. |
Ms. Pike and her three-year-old receive TANF. In March, Ms. Pike has a baby, but she does not report the newborn until September. Ms. Pike must receive supplemental benefits to correct the underpayment for the period of March–September. |
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| GC |
See TANF
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| IDA |
See TANF |
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FS
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The date that an underpayment is discovered affects how it is corrected. The discovery date is whichever of the following occurs first:
- the date someone notifies the department (verbally or in writing) of the underpayment
- the date the department discovers the underpayment.
Underpayments caused by a DHS error must be corrected, even if the household has not requested the correction. In addition, underpayments that are the result of a reversal of department actions at administrative review or fair hearing or the reversal of a fraud/IPV disqualification must be corrected.
Underpayments that are caused by a recipient error, such as a delay in reporting a change that results in increased benefits, are not corrected. However, the change must be made prospectively, if applicable.
Underpayments cannot be corrected for more than 12 months prior to the date of discovery.
When a household adds a newborn or other mandatory group member, the group’s benefits are increased in the first available month after the birth or addition of the group member is reported (see Section 5.6: Adding a Newborn in this Part).
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Ms. Allison contacts DHS on April 25, 2005 and requests correction of FS benefits for a three-month time interval from February to April of 2005, since the increased shelter costs she reported in January were not entered in ACEDS. Since she made the discovery within 12 months of underpayment, she can receive a supplementary payment for the entire period. | |
Determining Over/Underpayment Amounts 6.6
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The overpayment or underpayment is the difference between the benefit amount the client actually received before recoupment and the benefit amount the client should have received before recoupment.
The FS 20 percent earned income disregard and the two-thirds (2/3) TANF earned income disregard are not allowed if earned income is not reported timely (See Section 6.3: Income Disregards and Deductions in Part VI.) If group was on periodic reporting and did not submit its report by the 10th of the month in which it was due, the earned income disregard was not allowed.
When policy for determining overpayments has changed, the policy in effect for the payment month is used. For a group on standard reporting prior to October 1, 2005, a report is considered timely when income is reported within ten days from the date the income was received. For a group on standard reporting on or after October 1, 2005, or for a group on semi-annual or simplified reporting, a report is timely when the income is reported by the 10th day of the month following the month in which their total income exceeds their reporting threshold. The $160 work expense deduction in TANF is allowed even if income is not reported timely. The earned income disregards are allowed prospectively once the income is reported.
If a recipient does not cooperate by providing actual information to determine the amount of the incorrect payment, the best estimate or the best information available may be used. One source of information is IEVS. If the SSR has information from some months in an earlier quarter, the information is used for subsequent months. If the SSR has quarterly wage information (from DOES or the recipient's previous employer) and the recipient is unwilling or unable to provide monthly earnings amounts, average the quarterly wages over the quarter and use the resulting monthly average to determine the correct payment amounts. The SSR must attempt to get monthly wage information directly from the recipient’s employer, before using an estimate or best available information to report or establish the claim.
When there is one month or more of total ineligibility and then one month or more of eligibility, the unit is presumed to have reapplied on the first day they were eligible. The amount that the unit should have received based on the first day they were eligible (prorate if necessary) is calculated.
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TANF
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Recipients must report changes in their household composition. When a mandatory unit member enters a household and the unit fails to report the change in a timely manner, the underpayment is calculated starting with the month the mandatory unit member arrives.
| Ms. Leidy gave birth to her son Abraham on May 18. She does not report the change in household composition until June 4. She has already been issued June benefits. When calculating her underpayment, it will start with May benefits. | |
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FS
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See TANF except no overpayments or underpayments are established because of changes (e.g., person becomes elderly or disabled and becomes eligible for a higher shelter deduction) that were not required to be reported by the unit during the certification period. Also, when a group member is added to the group, the change is made prospectively after the change is reported.
When calculating overpayments or underpayments for FS households who also receive TANF, the amount of TANF cash assistance actually received in the payment month is used, even if the cash assistance was later determined to be an overpayment.
DHS keep a record of underpayments, corrective payments, overpayments and recovery. The information must be sufficient to keep track of people who:
- currently receive assistance (including people who move from one unit to another)
- no longer receive assistance.
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