WAG 23-06-02: Procedures for Disqualification

PM 23-06-02

Inactive Clients

  1. Inactive Clients
  2. Active Clients
    1. Single Member Cash or Medical Payee Case
    2. Single Member Category 08 Case
    3. Category 08, Cash, or Medical Payee Case with 2 or More Members
      1. Persons Born in US
      2. Persons Born Outside US
  3. Returning a Disqualified Person to Active Status
    1. Category 08, Cash, or Medical Payee Cases with 2 or More Members
    2. If a client was disqualified in error, complete Form 552 with the following to resume active status:
  4. At Application
    1. Mercury Approvals
    2. Regular Approvals
      1. Persons Born in US - Regular Approval
      2. Persons Born Outside US - Regular Approval

Inactive Clients

  1. (BOI) Completes Form 2550.
  2. (BOI) Sends Form 2550 to the client.
    1. Sends a copy of Form 2550 to the BOC.
  3. (BOC) Enters information in DRS.

    NOTE: Once Form 2550 is sent and the disqualification starts, the disqualification period cannot be changed. 

  4. (BOC) Sends copy of Form 2550 and Form 2550D, Inter-0ffice Memorandum, to the Family Community Resource Center.
  5. (FCRC) Recompute the overpayment deleting the 20% earned income deduction, if indicated.
    1. Follow the instructions on Form 2550D.
  6. (FCRC) File the information in the case record. No other FCRC action is required unless the client reapplies for food stamps.

Active Clients

  1. (BOI) Sends a partially completed Notice of Disqualification for Intentional Program Violation (Form 2550/2550C) to the Bureau of Collections (BOC) to inform them of the disqualification.
  2. (BOC) Enters the information into the Disqualified Recipient System (DRS) using the month following the month of the IPV decision.
  3. (BOC) Sends Form 2550/2550C and Form 2550A to the Family Community Resource Center.
  4. (FCRC) Complete the rest of Form 2550/2550C.
  5. (FCRC) Distribute Form 2550/2550C:
    • original for FS payee,
    • copy to BOC, and
    • copy in the case record.
  6. (FCRC) Decide if the FS unit remains eligible for food stamps:
    • if the rest of the FS unit is still eligible, a list, "Persons in Active Food Stamp Cases Whose Disqualification is Ending", is sent to the Family Community Resource Center to alert the Family Community Resource Center to remove the disqualification. A case first appears on the list that is printed 2 months prior to the end of the disqualification period. The list instructs the Family Community Resource Center to remove the disqualification for the first regular roll month after the month and year listed in Code 241 LMD.
    • cancel the case if other members are ineligible or all members are disqualified.
    1. Complete Form 552 to cancel food stamps if the client(s) is ineligible:

      • Single Member Cash or Medical Payee Case

      • Item 2 -Enter the effective date (MMYY).
      • Item 3 -Enter TA 31.
      • Item 15 -Enter a dash.
      • Item 33 -Enter TAR 20.
      • Item 39 -Enter code 90. (Family Community Resource Center sends Form 2550/2550C.)

      • Single Member Category 08 Case

      • Item 2 -Enter the effective date (MMYY).
      • Item 3 -Enter TA 22.
      • Item 33 -Enter TAR 60.
      • Item 39 -Enter code 80. (Family Community Resource Center sends Form 2550/2550C.)
    2. To remove a person who has an IPV from an FS case of any category with 2 or more members, complete Form 552 as follows:

      • Category 08, Cash, or Medical Payee Case with 2 or More Members

      • Item 2 -Enter the effective date (MMYY).
      • Item 3 -Enter TA 31.
      • Item 15 -Enter 4.
      • Item 23 -Reduce the number of people listed in this item by the number of people being disqualified.
      • Item 33 -Enter TAR 47.
      • Item 39 -Enter code 80 or 90, as appropriate. (Family Community Resource Center sends Form 2550/2550C.)
      • Item 64 -Enter one of the following in the first position:

      • Persons Born in US

      • 01 -First Disqualification (12 months)
      • 02 -2nd Disqualification (24 months)
      • 03 -3rd Disqualification (permanent)

        New text07 - 10-year Disqualification

      • Persons Born Outside US

      • 51 -First Disqualification (12 months)
      • 52 -2nd Disqualification (24 months)
      • 53 -3rd Disqualification (permanent)
      • New text57 - 10-year Disqualification
      • Item 80 -Enter code 241 LMD (Last Month of Disqualification). Enter a date (MM/YY) in the PERSONS column. This date identifies the last month of the disqualification period. Do not enter this code when canceling food stamps for an IPV disqualification, only use it when disqualifying someone.
      • NOTE: If the disqualification is permanent, enter 99/99.
      • When disqualifying more than one person, enter only one 241 LMD code and date. If the ending dates of the disqualification periods are not the same:
        • enter the earliest end date, and
        • update the 241 LMD code with the ending date of the next disqualification period when the first period ends.
      • Item 90 -Enter any new or changed income codes or amounts.
      • Item 91 -Complete, if appropriate.
  7. (BOC) Changes the disqualification period on DRS, if needed.

    NOTE: The disqualification period starts no later than the 2nd month after the calendar month of the IPV decision.

Returning a Disqualified Person to Active Status

  1. (System) Sends list, "Persons in Active Food Stamp Cases Whose Disqualification is Ending," to alert the Family Community Resource Center to remove the disqualification. A case first appears on the list that is printed 2 months prior to the end of the disqualification period.
  2. (FCRC) Determine eligibility for the effective month after the disqualification period ends.
  3. (FCRC) Complete Form 552:

  • Category 08, Cash, or Medical Payee Cases with 2 or More Members

  • Item 15 -Delete code 4. Enter the code for the FS unit's participation status.
  • Item 23 -Increase the number of persons by the number being added.
  • Item 39 -Enter code 80, 90, 91, or 92.
  • Item 64 -Enter code 50 or dashes, as appropriate.
  • Item 80 -Remove (or update) code 241 LMD and the disqualification end date. Enter any other Item 80 changes, as needed.
  • Item 90 -Enter any new or changed income codes or amounts.
  • Item 91 -Complete, if appropriate.

  • If a client was disqualified in error, complete Form 552 with the following to resume active status:

  • Item 2 -Enter the effective date (MMYY) of the transaction.
  • Item 3 -Enter TA 31.
  • Item 15 -Delete code 4. Enter the code for the FS unit's participation status.
  • Item 23 -Increase the number of persons by the number being added.
  • Item 33 -Enter TAR 48.
  • Item 39 -Enter Client Notice Code 00, 80, 90, 91, or 92.
  • Item 64 -Delete the disqualification codes and replace with dashes.
  • Item 80 -Remove code 241 LMD and the date from the PERSONS column. Enter any other needed changes.
  • Item 90 -Enter any new or changed income codes or amounts.
  • Item 97 -Complete, if appropriate.

At Application

The Disqualified Recipient System (DRS) shows the "STRT" (start) date of the disqualification as the month after the month of the IPV decision. The "THRU" date is entered as a 6-digit date.

If a disqualified client files an application and the "THRU" date on DRS has:

  • not passed - deny the client for the months left in the disqualification period (see WAG 17-04-03); or
  • passed - process the application as usual.

Mercury Approvals

Use the AIS or IPACS to process Mercury FS approvals when an FS unit member is disqualified for an IPV. The system counts the income and assets of the disqualified member when calculating Mercury benefits. If not suppressed, the central approval notice tells the FS unit why the member was not included in the benefits.

Regular Approvals

(FCRC) Complete Form 552:

  • Item 15-Enter 4.
  • Item 23-Enter the number of people eligible for FS. Do not include the disqualified person.
  • Item 24-Change to end the same month as the disqualification end date in Item 80 if the date is later than the date in Item 80.
  • Items 60-78-Enter information on the disqualified person except for Item 64 (see WAG 25-08-04 , Approving Ongoing Benefits).
  • Item 64-Enter one of the following in the first position:

    • Persons Born in US - Regular Approval

    • 01 -First Disqualification (12 months)
    • 02 -2nd Disqualification (24 months)
    • 03 -3rd Disqualification (permanent)
    • New text07 - 10-year Disqualification

    • Persons Born Outside US - Regular Approval

    • 51 -First Disqualification (12 months)
    • 52 -2nd Disqualification (24 months)
    • 53 -3rd Disqualification (permanent)
    • New text57 - 10-year Disqualification
  • Item 80 -Enter code 241 LMD, Last Month of Disqualification. Enter a date (MM/YY) in the PERSONS column. This date identifies the last month of the disqualification period. If the disqualification is permanent, enter 99/99.