WAG 23-03-02: Figuring a Cash Overpayment

PM 23-03-02

NOTE: If the case is in EZ REDE status, the customer is not required to report changes within 10 calendar days.

Example 1: The April fiscal month is 04/01 to 04/30. On 05/05 the customer tells the Family Community Resource Center that she began working on 04/03. The actual wages received in April make her ineligible in April. Cancel the case for June. May is the first month of ineligibility.

  • April - Income began (change plus 10 days = 04/13)
  • May - FCRC learns of income
  • June - Case canceled

May is the first month that could have been affected on the regular roll and is therefore an overpayment month.

Example 2: The fiscal month for an AABD customer is the first through the 30th. On 05/05 the customer reported employment beginning on April 3rd. The wages for May and June caused ineligibility. The case was canceled starting in July.

  • April - Earnings should have been reported by 04/13
  • May - Ineligible based on May income
  • June - Income reported
  • July - Case canceled

May is the first overpayment month.

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Example 3: text revisedA TANF customer calls on 05/16 to report she began employment on April 30th. The case is prospectively eligible. She received her first pay on 05/07. Earnings are budgeted for June.

There is no overpayment for the May earnings.

Example 4: text revisedA TANF customer calls on 05/09 to report she began employment April 21. The case is prospectively eligible. She received her first pay on 04/30. Earnings are budgeted for June.

There is no overpayment.

Example 5: text revisedA TANF customer reports on 11/10 that she is now employed, will be paid weekly, and will receive her first paycheck on 11/18.

The case is prospectively eligible. Earnings are budgeted for January.

Since the customer reported employment in sufficient time to affect the December payment month and those earnings were not budgeted until January, an overpayment based on agency error exists for December.

Example 6: On March 1st the customer moves out-of-state. The FCRC learns of the move in June. April is the first overpayment month.

Case Was and Is Ineligible

When a case is currently ineligible and was ineligible for a previous month, it is automatically ineligible for all the months between even if the reasons for ineligibility were different.

Use the cash benefit amount for each ineligible month to figure the total overpayment.

NOTE: Do not figure each month separately.

Example 1: Ms. H received AABD Cash benefits. She began receiving SSA in January. The FCRC learned of the income in April. The income makes the customer ineligible. Aid is ended effective May.

  • January - Income began
  • February - Income continues
  • March - Income continues
  • April - FCRC learns of income, prospective decision for May
  • May - Case canceled

Overpayment is for February through April.

Example 2: text revisedA customer received TANF cash benefits. The customer's 2 children left the home on December 1st to go live out-of-state with their grandmother. The FCRC learned of the change in the family unit in April. The case is canceled effective May.

  • December - Children leave home
  • January - Ineligible
  • February - Ineligible
  • March - Ineligible
  • April - FCRC learns of change
  • May - Case canceled

Overpayment is for January through April.

Case Was Ineligible and Is Now Eligible

When a case was ineligible but a change occurred that made the case eligible again, ineligibility exists from the first applicable month through the month the change ended.

Make a prospective decision of continued eligibility for the first applicable month and the following month. Continued eligibility and the cash benefit amount are based on a prospective decision. Allow income disregards, as appropriate, when income continues.

Example 1: For an AABD customer, earned income began in January. Income received causes ineligibility and would have caused cancellation for February had the customer reported it within 10 calendar days. The income ended in March. The FCRC learned of the income in May. The ineligible months are February and March. Make a prospective eligibility decision for April and May to determine eligibility and the cash benefit amount.

  • January - Earned income began, case ineligible
  • February - Ineligible
  • March - Earned income ended
  • April - Determined prospectively eligible
  • May - FCRC learns of employment, determined prospectively eligible.

The months of overpayment are February and March.

Example 2: text revisedThe FCRC learns in May that a TANF customer began employment on January 2nd. The income caused ineligibility for February. In March the customer's employment hours were reduced to part-time. The ineligible months are February and March.

Prospective eligibility exists for April and May even without allowance of the 3/4 earned income disregard. To figure the overpayment, calculate the April overpayment based on income actually received in April without allowing the income disregard. Calculate the May overpayment based on the income expected for May without allowing the income disregard.

The first month the case is put into EI REDE status and income is actually budgeted is June. The customer is eligible for income disregards for the June payment month.

  • January - Full-time employment began
  • February - Ineligible
  • March - Part-time employment began, ineligibility continues.
  • April - Prospective determination without disregards
  • May - FCRC learns of employment, prospective determination without disregards
  • June - Prospective budgeting with disregards.

Eligibility Continued Despite a Change (TANF)

When there was an overpayment in a prior month because of a change but eligibility still existed, be sure to use overpayment policy, rather than budgeting policy:

  • Use budgeting policy to decide eligibility and cash benefit amount.
  • Use overpayment policy to decide if there is an overpayment, when it begins and ends, and the amount of that overpayment.

Complete a separate budget calculation for each month of overpayment using prospective budgeting for each month.

NOTE: Apply earned income deductions to prospective budgeting to decide current TANF cash payment amount. Do not apply earned income deductions for a prior month when deciding prospectively how much the cash payment should have been.

Example 1: revised textA code C appears on the November PAL for Ms. P. The FCRC did not know that Ms. P was employed. It is learned she began in late March and is still working. Allowing for the 10 calendar days, cut-off for April would have passed.

Ms. P's earnings started in March and:

  • from May through July, she was prospectively eligible,
  • starting August, she became prospectively ineligible, and
  • she is currently prospectively eligible.

Ms. P's earnings are budgeted prospectively for January.

To figure the overpayment, figure prospectively the overpayment for May through July payment months.

Since Ms. P was prospectively ineligible starting August, the cash assistance received in August through December is an overpayment.

Example 2: Ms. B begins receiving earned income in January. She started on January 3rd. FCRC learns of the employment in April. Ms. B verifies employment ended in March and the last paycheck was received in March.

Eligibility continued without allowing the income disregards. Complete a separate prospective calculation for February and March without allowing income disregards.

Budget prospectively for April. There is no overpayment for April since there were no earnings in April.

  • January -Earned income began. Allowing for 10 calendar days, first possible month affected is February.
  • February -Eligible based on February income, prospective overpayment completed for February.
  • March -Eligible for March, earned income ended, prospective overpayment completed for March.

Eligibility Continued Despite a Change (AABD)

When there was an overpayment in a prior month because of a change but eligibility still existed:

Use prospective budgeting to complete a separate budget calculation for each month of overpayment.

Example: Ms. A begins receiving earned income in January. She started January 3rd. The FCRC learns of the employment in April. Ms. A verifies employment ended in March and the last paycheck was received in March.

Complete a separate prospective calculation for each month. The first overpayment month is the February payment month. Use income received in the February and March budget months to figure the overpayment for February and March.

  • January -Earned income starts
  • February -Eligible based on February income
  • March -Prospectively eligible for March, earned income ended, prospective decision using March income.

Overpayment Caused by Too Many Assets new text (AABD)

  1. Use 10 days from the date the asset was received to decide if the customer is eligible. It does not matter if the asset did not exist at the end of the month the change occurred.
  2. When the amount of the asset is more than the asset limit, the overpayment amount is the lesser of:
  • the amount of the asset above the asset limit, or
  • the cash payment amount for the entire period there were too many assets.

Overpayment With No Verifications

When attempts to get verifications have failed, treat the entire cash payment amount as an overpayment.

Example: The FCRC finds out that a customer was self-employed for 5 months and did not report the income. The FCRC asked the customer for information but the customer did not provide the information. A request was made to BOI for the information, but they were unable to get the information. Treat the entire cash payment amount as an overpayment.

If the customer provides the needed information within 90 days of being notified of the overpayment:

  1. Refigure the overpayment amount.
  2. Revise the overpayment, if needed.
  3. Send Change of Overpayment Information (Form 2404C) to BOC to tell them of the changed amount.

If the customer provides the information after 90 days of being notified of the overpayment, no action is needed since the appeal period has expired.

Case Being Transferred to Another Family Community Resource Center

When a case with pending overpayment verifications moves to an address served by another FCRC:

  1. (Old FCRC) Process the overpayment before transferring the case:
    • Figure the overpayment amount.
    • Process the overpayment through ACM.
    • For AABDtext deletedcases, start recoupment.

      NOTE: Do not delay transferring the case to the new FCRC because of pending verifications. 

  2. (Old FCRC) Complete Inter-Office Memorandum (Form 139) to advise the new FCRC that an overpayment has been processed.
    1. Address Form 139 to the Financial Recovery Coordinator (FRC) and staple it to the transferred case record.
  3. (Old FCRC) Include any information about pending verifications or BOI referrals.
  4. (Old FCRC) Send information received from pending verifications or a response from BOI to the new FCRC with a cover Form 139 to the FRC in the new FCRC.
  5. (New FCRC) Review all transferred-in cases for existing recoupments or overpayment referrals.
    1. Complete an ARS clearance (PF/F10) to see if there is a current overpayment.
    2. Use Form 2404C to notify BOC if an overpayment exists and is not being recouped.
  6. (BOC) Changes overpayment information, if the new FCRC uses TA 40 to transfer the case onto its payroll.

When the transfer is done by canceling the old case and reopening a new case:

  1. (New FCRC) Use Form 2404C to report the change in case numbers to BOC.
  2. (BOC) Updates ARS manually.
  3. (FRC) Establishes a control when the case includes information about pending verifications.
  4. (New FCRC) Review information received from pending verifications or a response from BOI.
    1. Refigure the overpayment, if appropriate.
    2. Revise the overpayment, if needed.
    3. Send Form 2404C and Form 2404X, Notice of Overpayment, to BOC to tell them of the changed amount.

NOTE: If pending verifications are received and the overpayment had not been previously reported, the new FCRC uses Form 2404 and Form 2404X to report the overpayment. Enter the old FCRC's number in Item 5, Responsibility Code, of Form 2404, and the former case ID number in Item 22.

Change of Categories

When changing a case's category:

  1. Review the case for existing cash or SNAP overpayments, including completion of an ARS clearance (PF10/F10).
  2. Send Form 2404C to BOC to report the category change if an overpayment was reported.

NOTE: A Category 04 or 06 cash overpayment can only be recouped from another Category 04 or 06 case.

Federal Crossmatches

If the customer does not respond to a request for verifications (see WAG 23-03-00) within the 10-day period, do not refer the case to the Bureau of Investigations.

  1. (FCRC) Figure the monthly income amount by:

    • dividing the quarterly amount on the PAL by 3 to get a monthly income amount, or
    • dividing the amount on the crossmatch listing by the appropriate number of months.
  2. (FCRC) Figure the overpayment by using the monthly income amount to project income for the entire overpayment period.

    NOTE: The overpayment period starts with the first month of the PAL or crossmatch period and extends to the month of cancellation. 

  3. (FCRC) Cancel the case for failure to cooperate.
  4. (FCRC) Complete Form 2404 and Form 2404X to report the overpayment.
  5. (CO) Sends Form 157 or Form 157C to customer.

If the employer returns the wage information within 30 days:

  1. Figure the overpayment using the information from the Form 266/266A, Request for Employment Verification.
  2. Send Form 1447 to TPL unit.
    1. Code TPL information on Form 552, if appropriate.

If the employer does not respond within 30 days:

  1. (FCRC) Figure the monthly income amount by:
    1. dividing the quarterly amount on the PAL by 3 to get a monthly income amount or
    2. dividing the amount on the crossmatch listing by the appropriate number of months.
  2. (FCRC) Figure the overpayment by using the monthly income amount to project income for the entire overpayment period.

    NOTE: The overpayment period starts with the first month of the PAL or crossmatch period and extends to the current month or the month the income ended if it can be verified.

  3. (FCRC) Complete Form 2404 and Form 2404X to report the overpayment.
    1. Process the overpayment through ACM or send Form 2404 and Form 2404X to BOC.
  4. (CO) Sends Form 157 or Form 157C to customer.

If the employer returns the Form 266/266A after the 30 days:

  1. Refigure the overpayment using the new information.
  2. Complete Form 2404C and Form 2404X.
    1. Send Form 2404C and Form 2404X to BOC.
  3. Complete Form 1447, Health Insurance Resource Report, if the Form 266/266A shows a TPL resource.
    1. Send Form 1447 to TPL unit.
    2. Code TPL information on Form 552, if appropriate.

When income information on a previously canceled case comes from the PAL, to figure the monthly income:

1. Figure the monthly income amount by:

  • dividing the quarterly amount on the PAL by 3 to get a monthly income amount or
  • dividing the amount on the crossmatch listing by the appropriate number of months.

2. Figure the overpayment by using the monthly income amount to project income for the entire overpayment period.

NOTE: The overpayment period starts with the first month of the PAL or crossmatch period and extends to the month of cancellation.