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.1 General
.11 Any overpayment which occurred prior to April 2, 1982 and which is determined to be nonwillful, in accordance with regulations in effect during the month that the overpayment occurred, shall not be recouped except through voluntary repayment.
.12 For any willful overpayment which was discovered prior to April 2, 1982 and the maximum adjustment period had not expired prior to April 1982, adjustment shall be continued as long as necessary to recover the overpayment.
.13 For any overpayment, except those described in 44-350.11, which is discovered on or after April 2, 1982, the overpayment shall be recouped in accordance with regulations in effect on the date of discovery.
.14 When the overpayment is determined to be due to excess property, the overpayment is to be recouped in accordance with the regulations in Section 44-352.11.
.141 For cases in which an overpayment caused by excess property was recouped under former MPP Section 44-352.11, which was effective on April 2, 1982, the county shall take the following steps:
(a) Recompute the overpayment in accordance with the April 1986 amendments to Section 44-352.11;
(b) Determine if the revised overpayment is less than the overpayment computed under the April 2, 1982 regulations.
(c) If the revised overpayment is less, issue a payment to correct the underpayment for any amount which has actually been recouped which exceeds the revised overpayment amount.
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Note: In accordance with the Edwards v. McMahon final court order, payments are to be issued to correct underpayments even when the family is not currently aided.
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STANDARDS OF ASSISTANCE
.142 The case review, recomputation, and correction of any underpayments shall be completed as soon as possible and not later than the deadlines set forth below:
(a) The date of the next annual redetermination of eligibility or the date of termination, whichever is earlier, for all current recipients on the effective date of this regulation;
(b) Sixty days from the date aid is granted for reapplications and requests for restoration of aid within one year of the effective date of this regulation;
(c) Sixty days from the date of a request for review in all other cases.
.15 An overpayment is any amount of any aid payment an AU received to which it was not eligible. An overpayment may be all or a portion of an aid payment. This includes, but is not limited to, an immediate need payment, a special need payment or aid paid pending a state hearing.
.151 An overpayment shall not include aid paid where all four of the following prerequisites are met:
(a) An applicant or recipient fails to perform an act constituting a condition of eligibility for aid. Acts which constitute conditions of eligibility shall include, but are not limited to those contained in Sections 40-105.21, 42-625, 43-106, 43-119.23, 44-103.23, and .24.
(b) The applicant's/recipient's failure to perform an act constituting a condition of eligibility is caused by a state agency error or by a County Welfare Department (CWD) error, and not by an applicant/recipient error.
(1) "State agency error," for purposes of this section is the agency's failure to promptly notify the CWD that the applicant/recipient does not or no longer meets a specific condition of eligibility.
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(A) For example: EDD fails to notify the CWD that an applicant/recipient has been deregistered from Job Services (JS).
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STANDARDS OF ASSISTANCE
(2) "CWD error," for purposes of this section, is the CWD's failure to inform an applicant/recipient that he/she must perform an act which constitutes a condition of eligibility.
(3) "Applicant or recipient error," for purposes of this section, shall occur only when the applicant or recipient was notified, either verbally or in writing, of the need to perform the act which constitutes a condition of eligibility and did not perform the act in question after notification, within a reasonable period of time under the circumstances.
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(A) For example, where a child becomes six years old on April 6 and the CWD informs the parent of the requirement to WIN register on July 12, the parent's failure to WIN register in July would probably be a "recipient error" and, therefore, cause an overpayment for July. However, if the parent is informed of the WIN registration requirement on July 29, a failure to register within that month would probably not be a "recipient error" and there would be no overpayment for July because the recipient did not have a reasonable period of time to WIN register before the end of the month. In either case, there is no overpayment for April, May and June.
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(c) The amount of aid paid would have been the same had the act constituting the condition of eligibility been performed.
(d) The state agency or CWD error is discovered or an overpayment is being calculated or an overpayment is being recouped on or after January 1, 1985.
.16 The county must take all reasonable steps necessary to promptly correct and collect any overpayments that are known to the county including recovery of overpayments due to either applicant/recipient and/or county administrative errors, with the following exceptions:
.161 The county shall not demand collection of nonfraudulent overpayments totaling less than $250 from individuals no longer receiving aid. Where the nonfraudulent overpayment amounts owed by the individuals no longer receiving aid is $250 or more, the county shall send a demand notice for repayment. If the overpayment is being repaid in installments, the county shall cease collection efforts once the balance of the outstanding overpayment falls under $250. A county may request a threshold higher than $250 and the Department may approve a county's request if the Department determines that a higher threshold would be more cost effective.
STANDARDS OF ASSISTANCE
(a) Counties shall provide supporting evidence of reasonable cost effectiveness when requesting a higher threshold amount for Department approval. Costs which counties may consider and submit evidence for when requesting a higher threshold include, but are not limited to total administrative and personnel costs, legal filing fees, investigative costs.
(b) Counties shall maintain information regarding the uncollected overpayments to enable recoupment should any individuals from the prior overpaid AU reapply.
.162 The county must not establish an overpayment for aid paid to an aided CalWORKs recipient on behalf of a deceased child in the AU in the month of and the month following the death of the child. However, the county may continue to pursue overpayment recovery for an already established overpayment.
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.163 Any nonfraudulent overpayment claims established on or after August 1, 2021 which include any overpaid months during the COVID-19 pandemic emergency period, beginning April 2020 through June 2022, shall be classified as administrative error overpayments. If an overpayment claim is classified as an administrative error pursuant to this paragraph, and the claim also includes overpaid months before or after the period specified, the entire overpayment claim shall be classified as an administrative error. Any overpayments originally established as agency error pursuant to this requirement shall not be reclassified when the COVID-19 pandemic emergency ends, except that overpayments classified as administrative error pursuant to this section must be reclassified to intentional program violation (IPV) if later determined to be fraudulent.
(a) Example 1: The county welfare department (CWD) established an overpayment claim in October 2021 for the overpaid months of November 2019 through April 2020. This entire claim should be classified as administrative error because it includes the pandemic month of April 2020.
(b) Example 2: The CWD established an overpayment claim in December 2022 for the overpaid months of January 2022 through June 2022, during the public health emergency. This claim should be classified as administrative error because the claim includes months occurring within the pandemic timeline of April 2020 through June 2022.
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STANDARDS OF ASSISTANCE
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(c) Example 3: The CWD established an overpayment claim in February 2023 for the overpaid months of July 2022 through January 2023. This claim could be established as either client error or administrative error because the overpaid months are outside the April 2020 through June 2022 pandemic timeline.
(d) Example 4: The CWD established an overpayment claim in July 2021 for the overpaid months of January 2021 through June 2021. The county classified the claim as administrative error since it included months within the pandemic timeline. In June 2022, an IPV related to the aid received during the overpayment period was substantiated through a criminal court. The claim which was originally classified as agency error must be reclassified to IPV.
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.164 A CWD shall only establish a nonfraudulent overpayment if all or a portion of the overpayment occurred within 24 months prior to the date of discovery.
(a) When calculating an overpayment, a CWD shall not include for collection any overpaid months that occurred beyond 24 months prior to the date of discovery, except when an IPV, as defined in Section 20-351(i), has been determined by a criminal court, administrative disqualification hearing, or waiver of such a hearing. In such cases the 24-month timeframe for establishing and collecting an overpayment shall not apply.
(b) The date of discovery is defined as the date the county determined by computation that an overpayment has occurred.
(c) An overpayment claim will be considered established as of the date that the initial demand letter or written notice was sent to the recipient.
.17 A supplemental payment which was correctly computed, based on the county's determination of reasonably anticipated income, shall not be subject to an overpayment determination provided that the recipient's report, upon which the county based its determination, was complete and accurate. If there is a computational error, the supplemental payment shall be corrected.
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(SAR) .18 An overpayment shall not be assessed based on any differences between the amount of income the county reasonably anticipated the recipient would receive during the SAR Payment Period and the income the recipient actually received during that period, provided the recipient's reports were complete and accurate.
(AR/CO) An overpayment shall not be assessed based on any differences between the amount of income the county reasonably anticipated the recipient would receive during the AR/CO Payment Period and the income the recipient actually received during that period. If the recipient's reports were incomplete or inaccurate, the county shall assess an overpayment based on what should have been reasonably anticipated at the time of the report, had the recipient reported completely and accurately.
.2 Definitions (in Alphabetical Order)
a) Action for Civil Judgment - The action taken by the appropriate county official to take the recipient or former recipient to court.
b) Administrative Error Overpayment - Except as provided in Section 44-350.151, an overpayment caused by error on the part of the county when all information necessary to a correct determination of the grant was in the possession of the county.
c) Aid - The amount of assistance issued to a recipient.
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d) Balancing - A method for the recovery of all or a portion of an overpayment by applying it against a repayable underpayment.
e) Demand for Repayment - The notification to a recipient or former recipient that an overpayment occurred for which there is a right for judicial restitution. Where demand for repayment is appropriate, it may be used concurrently with other methods of adjustment.
f) Grant Adjustment - Recovery of an overpayment by reducing the grant of a presently eligible individual or family.
g) (Reserved)
h) (Reserved)
i) Month of Discovery - The month of discovery is the month in which the county obtained, or could have obtained by taking prompt action, information sufficient to support a determination both that an overpayment occurred and the amount of such overpayment.
j) Nonfraudulent Overpayment - An overpayment which is not determined to be fraudulent pursuant to MPP 20-003.1.
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MPP 20-003.1 provides that fraud exists when a person, on behalf of himself or others, has:
(1) Knowingly and with intent to deceive or defraud made a false statement or representation to obtain benefits, obtain a continuance or increase of benefits, or avoid a reduction of benefits.
(2) Knowingly and with intent to defraud failed to disclose a fact which, if disclosed, could have resulted in denial, reduction, or discontinuance of benefits.
(3) Accepted benefits knowing he/she is not entitled thereto, or accepted any amount of benefits knowing it is greater than the amount to which he/she is entitled.
(4) For the purpose of obtaining, continuing, or avoiding a reduction or denial of benefits, made statements which he/she did not know to be true with reckless disregard of the truth.
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k) Recovery - Grant adjustment, voluntary grant offset, voluntary cash recovery, demand for repayment, action for civil judgment and balancing.
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l) Unlocatable - Means either of the following:
(1) When the county is unable to determine the physical whereabouts of the caretaker relative; or
(2) When the county is able to locate the caretaker relative, but unable to execute a legal process to collect.
m) Voluntary Cash Recovery - Repayment voluntarily made to the county by a recipient who has incurred an overpayment.
n) Voluntary Grant Offset - Voluntary repayment made to the county by a recipient’s foregoing all or a portion of a grant for which he or she is eligible.
.3 Investigation of Overpayments
When information indicates that an overpayment may have occurred, the county shall take the following actions:
.31 Review the eligibility and grant factors to find what the correct grant amount should have been;
.32 Calculate the overpayment;
.33 Determine from whom the overpayment may be recovered (see Section 44-352.3);
.34 Determine the appropriate recovery method and the amount to be recovered.
.35 If appropriate (see Section 44-352.5), initiate any referrals to the SIU for an investigation.
.4 Aid Paid Pending
Aid paid pending a state hearing decision (see Section 22-022) is a recoverable overpayment except to the extent that the claim is granted. However, the amount of a proposed overpayment adjustment which is stopped because of a recipient's timely request for a state hearing is not an overpayment.
STANDARDS OF ASSISTANCE
.5 Overpayments Due to the Inability to Provide Ten-Day Notice of Adverse Action
(SAR) .51 An overpayment shall be assessed when the AU receives more cash aid than the AU was entitled to receive because the county was unable to provide ten-day notice of an adverse action following receipt of a mandatory recipient report, including reports on the SAR 7, the SAWS 2, or mandatory mid-period reports of income over the IRT.
(SAR) .52 An overpayment shall not be assessed for the month following a change in income over the IRT for the first through fifth months of a current semiannual reporting period if the recipient has reported the change and the county was unable, before the first of the month following the change, to provide 10-day notice of the termination or reduction of benefits.
(AR/CO) .51 An overpayment shall be assessed when the AU receives more cash aid than the AU was entitled to receive because the county was unable to provide ten-day notice of an adverse action following receipt of a mandatory recipient report, including reports on the SAWS 2, or mandatory mid-period reports of income over the IRT.
(AR/CO) .52 An overpayment shall not be assessed for the month following a change in income over the IRT or household composition for an AU that does not include an eligible adult for the first through fifth months of a current semiannual reporting period if the recipient has reported the change and the county was unable, before the first of the month following the change, to provide 10-day notice of the termination or reduction of benefits.
NOTE: Authority cited: Sections 10553, 10554, and 11004, Welfare and Institutions Code and Senate Bill 726 (Chapter 930, Statues of 2018). Reference: Sections 11004, 11004.1, 11056, 11265.1, 11265.3, 11265.47 and 11450.05, Welfare and Institutions Code; Federal Register, Vol. 75, No. 19, dated January 29, 2010, pages 4928 and 4929 [7 CFR 273.12(a)(1)(vii)].
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STANDARDS OF ASSISTANCE