44-352 OVERPAYMENT RECOUPMENT

(b) Determine the month within the period in which the property value, on the first day of the month, was the highest and calculate the amount by which the property exceeded the eligibility limit.

(c) Calculate the total amount of aid actually paid to the recipient during the months excess property was held, subtracting any money, excluding child support recoupment, received by the county which was credited against the aid payment for those months.

STANDARDS OF ASSISTANCE

(d) Determine whether the recipient received aid in "good faith". The determination of "good faith" receipt of aid shall be based on a preponderance of evidence establishing that the recipient believed himself/herself to be eligible to the aid received. The county shall consider information in the case record and all other available information, including an interview with the recipient if he/she is available and willing to cooperate. The determination of "good faith" receipt of aid shall be reasonable, objective, and drawn from all available information.

(1) The county shall not determine that a recipient has received aid in "good faith" in cases where the county has informed the recipient of his/her reporting responsibilities and, under the circumstances, the recipient knew of his/her reporting responsibilities and failed to report within his/ her competence. See Section 40-105.

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(A) The following are examples of questions to be considered in making the determination. Not all questions necessarily apply in all situations.

1. How was the recipient informed of their reporting responsibilities? E.g., Mass Mailing? Personal Intake Interview? Home Visit? Never?

2. Is there information in the case record which indicates the recipient's apparent understanding of their reporting requirements with regard to property?

3. What is the recipient's history of reporting?

4. Did the recipient know the value of the property in question?

5. Did county actions contribute to the situation causing the overpayment?

6. Is there other information about the recipient's situation that would have an influence on the determination (i.e., language/age barrier)?

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STANDARDS OF ASSISTANCE

(e) If the county determines that the recipient received aid in "good faith", in accordance with .112(d) above, the amount of the overpayment is the lesser of the amount of excess property calculated in .112(b) above or the total grant paid as calculated in .112(c) above.

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(1) Recipient owned several stocks which fluctuated in value. At the time of their eligibility determination in January the combined value of their property, including stocks, was computed to be $1,850. The recipient was granted aid of $100 per month. At the redetermination the following January, their property was investigated in detail. It was found that twice during the prior year the recipient’s total property value had exceeded the property limit, both times due to fluctuations in stock value. However, neither occurrence had taken place in a Data Month, so the recipient was not mandated to report this fluctuation in income. There is no overpayment in this situation.

(2) Recipient is in an August through January SAR Payment Period and receives a $400 monthly grant. They own several stocks which fluctuate in value, but have always been reported as worth less than $9,000. At the time of their annual redetermination in January, their property is investigated in detail. It is discovered that beginning in April of the previous year, their stocks increased in worth to $10,500. On the June SAR 7, submitted timely on July 8, the recipient should have reported the increased value of the stocks and the county would have taken action to discontinue the case effective July 31, the end of that SAR Payment Period, for being over the property limit. The stocks dropped down in value to $9,500 in October. The ineligible months are August through October. The county determines that the recipient did not know that they were over the property limits and that they received aid in "good faith."

The total grant paid for the ineligible months is $1,200. The amount by which the excess property exceeded the property limit in the month the property value was the highest was $500. The overpayment to be recouped is the lesser amount, in this case, $500.

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STANDARDS OF ASSISTANCE

(f) If the county determines that the recipient did not receive aid in "good faith", the amount of the overpayment shall be the total grant paid during the month(s) the excess property was held, as calculated in .112(c) above.

.12 Overpayment due to income or need or circumstances other than excess property.

An overpayment shall be assessed when an AU receives more cash aid than entitled to as a result of not reporting income or circumstances timely, or the county does not act correctly on a recipient report, or the county did not act timely. The county shall redetermine the cash aid the recipient should have received based on the required report and correct county action.

.121 Compute the correct grant amount based on correct information for the month involved in the overpayment. If the recipient was totally ineligible for that month, the correct grant amount is zero (0).

In this computation, allow all income disregards which would have been allowed if the grant had been computed correctly. The regulations in effect at the time the overpayment occurred shall be used to determine the correct amount of the grant, with the following exceptions:

(a) Regulations subsequently invalidated by a court decision shall not be used in determining the correct grant for the applicable period(s) as required by the court decision. Instead, the instructions (e.g., All-County Letter, regulations, etc.) implementing the court decision shall be used.

(1) If a recipient fails to report income timely or the county fails to act correctly or timely on a recipient report, the county shall redetermine the cash aid the recipient should have received based on an accurate report and correct county action. If the recalculation results in an overpayment, the date that the overpayment begins is the first date that the change would have been made if timely and correct action had been taken based on the complete, timely and accurate recipient report.

(2) When recomputing cash aid results in an overpayment, the county shall recreate case circumstances using the correct county processing time frames based on what the recipient should have reported.

STANDARDS OF ASSISTANCE

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In the AR/CO Payment Period designated as July through June, an AU has no income and is receiving the Maximum Aid Payment amount. On October 10, the county determines through an IEVS match that the AU got income that exceeded the IRT beginning on January 5 of the previous AR/CO Payment Period. The AU is still receiving the same level of income in the current AR/CO Payment Period and has never reported the income. The county determines that the AU should have reported this change by January 15, and should have had their grant decreased due to the increased income effective January 31. The AU’s grant shall be decreased on November 1, with a 10-day notice, and an overpayment would be established for February through October.

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(b) If the overpayment occurred prior to January 1, 1998, and if the overpayment is due to any earned income that the recipient failed, without good cause, to report timely, no earned income disregards shall be allowed for that individual in that month.

STANDARDS OF ASSISTANCE

.122 Subtract the correct grant amount from the amount of aid actually paid.

.123 Subtract any money, excluding child support recoupment, received by the county and credited against the aid payment from the aid actually paid.

.124 The total overpayment for each month is the lesser of the amount computed in Sections 44-352.122 or .123.

.125 The total overpayment is the sum of all amounts calculated in Section 44-352.124.

STANDARDS OF ASSISTANCE

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EXAMPLES

Factors Computations

1. * 50% Earned Income Disregard and Net Nonexempt Income must be rounded down to the nearest dollar amount: MPP Section 44-315.34

Factors | Aid Paid | (.121) Correct Grant | (.125) Overpayment Earned Income | $1, 400 Reported Income | 1, 400 Remaining DBI Disregard | - 600 Subtotal | 800 50% Earned Income Disregard | - 400 Total Net Nonexempt Income | 400 MAP for Five | $ 1,308 | $ 1,308 Total Net Nonexempt Income | - 400 Aid Payment | $ 1,308 | $ 908 Potential Overpayment (Aid Paid | $ 1,308 Less Correct Grant) | - 908 Total Potential Overpayment | $400

2. * 50% Earned Income Disregard and Net Nonexempt Income must be rounded down to the nearest dollar amount: MPP Section 44-315.34

Factors | Aid Paid | (.121) Correct Grant | (.125) Overpayment Earned Income | $ 875 Reported Income | $ 875 Income Disregard | - 600 Subtotal | 275 50% Earned Income Disregard* | - 137 Total Net Nonexempt Income* | 137 MAP for Three | $ 1,035 | $ 1,035 Total Net Nonexempt Income* | - 137 Aid Payment | $ 1,035 | 898 Potential Overpayment (Aid Paid | $ 1,035 Less Correct Grant)* | - 898 Total Potential Overpayment | $ 137

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STANDARDS OF ASSISTANCE

.2 Amount That Can Be Recovered

The amount that can be recovered is the total amount calculated under 44-352.11 or 44-352.12, with the following exceptions:

.21 Collection of overpayments shall not be demanded from any individual of the overpaid AU no longer receiving aid when:

.211 The overpayments are nonfraudulent; and

.212 The total amount of the overpayments is less than $250.

.22 Where the nonfraudulent overpayments owed by any individual no longer receiving aid totals $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, or the county's approved higher threshold amount per Section 44-350.161.

.3 Priority Order For Overpayment Recoupment

Overpayments shall be recouped in the following priority order unless specifically exempted under Section 44-352.2.

.31 Caretaker Relative Recipient

When the caretaker relative was a member of the AU at the time of the overpayment, the county shall first seek recoupment from the caretaker relative recipient.

.311 Recovery

The county shall continue to seek recovery of the overpayment from the caretaker relative even when he/she:

(a) Moves to another AU, or

(b) Is no longer on aid.

.312 Members of the AU

The county shall only initiate recovery of the overpayment from the other members of the overpaid AU after all efforts to collect from the caretaker relative recipient have been exhausted, and the caretaker relative recipient:

STANDARDS OF ASSISTANCE

(a) Dies and the county cannot collect the entire unpaid balance of the overpayment from the caretaker relative's estate; or

(b) Is unlocatable; or

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(1) In locating former recipients who have outstanding overpayments, appropriate date sources include, but are not limited to: State Employment Insurance Records; State Department of Revenue Records; State Department of Motor Vehicle Records; and Payment Verification System.

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(c) Has the overpayment discharged in bankruptcy; or

(d) Is no longer on aid; the overpayment is less than $250 pursuant to Section 44-352.211, and there are other members of the overpaid AU who remain on aid; or

(e) Is no longer on aid, and the county has determined that it is not cost effective to collect the overpayment from the caretaker relative pursuant to Section 44-352.22.

.32 Unaided Caretaker Relative

When the caretaker relative was not a member of the AU at the time of the overpayment, the county shall seek recovery from the members of the overpaid AU as specified under Section 44-352.33, unless Section 44-352.34 applies.

.33 Recovery from AU Members

There shall be no priority order in seeking collection of the overpayment from members of the overpaid AU who were not the caretaker relative.

.331 Sequential/Concurrent

Collection may occur in sequence against any one member at a time or concurrently from any of the members, when in separate AUs or when not receiving aid.

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STANDARDS OF ASSISTANCE

.34 CalWORKs Overpayment Recovery from Child AU Members

The county shall not collect an overpayment from an individual who was a non-head-of-household child-member of the overpaid AU at the time of the overpayment, under the following circumstances:

.341 The child moves to another AU,

.342 The child attains the age of 18 years or is an emancipated minor.

.35 Section 44-352.34 shall not apply to collections of overpayments made under the former AFDC program, as required by federal law.

.4 Methods of Recovery

All of the following methods may be used concurrently. However, those methods should be used that will result in the maximum recovery.

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STANDARDS OF ASSISTANCE

.41 Grant Adjustments

(SAR) Under SAR, recoupment by grant adjustment shall only be initiated at the beginning of a SAR Payment Period. Grant adjustment shall be discontinued mid-period when the debt is paid in full. A new overpayment collection may continue mid-period by grant adjustment if the new collection of the overpayment does not decrease aid mid-period.

(AR/CO) Under AR/CO, recoupment by grant adjustment shall be initiated mid-period. Grant adjustment shall be discontinued mid-period when the debt is paid in full.

.42 If the overpayment is to be recovered by grant adjustment, the following method shall be used:

.421 Agency Error

For overpayments caused by agency error,

(a) The AU's adjusted grant amount is the AU's computed grant amount for the payment month minus 5% of the MAP amount for the AU rounded to the next lower dollar.

.422 Other

For all other overpayments,

(a) The AU's adjusted grant amount is the AU's computed grant amount for the payment month minus 10% of the MAP amount for the AU rounded to the next lower dollar.

.423 Step Five

The overpayment shall be adjusted from the current aid payment. The adjustment shall be the lesser of the following:

(a) The overpayment balance, or

(b) The maximum adjustment amount, or

(c) The current aid payment.

STANDARDS OF ASSISTANCE

.424 Step Six

Any remaining overpayment balance shall be applied to succeeding months and the adjustment process shall be repeated.

.43 Balancing - See Section 44-351.3.

.44 Demand for Repayment

Using the appropriate Notice of Action form, the county shall demand repayment of any amount not recovered by grant adjustment, or otherwise repaid, except that no demand shall be made for nonwillful overpayment due to factors other than excess property that occurred prior to April 2, 1982.

.45 Civil Judgment

.451 If the recipient or an individual no longer receiving aid refuses or is unable to repay the amount demanded, the county shall refer the case to the appropriate county official for action on a civil judgment, unless specifically exempted under MPP 44-352.2.

(a) An abstract of civil judgment shall be recorded pursuant to Section 674, Code of Civil Procedure, in any county in which the recipient or former recipient owns real property.

(b) If a recipient is ineligible for further aid due to current income, property or other factors affecting eligibility, the county shall take all appropriate action pursuant to Section 681, et seq., Code of Civil Procedure, to execute the judgment.

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(c) Except that if the recipients' sources of income include Social Security or SSI/SSP benefits, these benefits are exempt from collection and will not be used to repay an overpayment unless agreed to by the client.

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.46 Nothing in .44 or .45 above shall preclude the county from arriving at a reasonable settlement of its demand for repayment with the recipient or former recipient.

.47 Voluntary Cash Recovery - See Section 44-351.1.

.48 Voluntary Cash Offset - See Section 44-351.2.

STANDARDS OF ASSISTANCE

.5 Referral to Special Investigative Unit (SIU).

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.51 Chapter 20-000 through 20-009 discusses referrals to the Special Investigative Unit and referrals to law enforcement officials. Chapter 20-350 discusses referrals made in cases of alleged IPV.

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.511 All overpayments determined to be caused by an applicant's or recipient's failure to report information shall be referred to the SIU, including overpayments caused by an alleged IPV.

.52 The Determination of Failure to Report.

.521 A failure to report occurs when the recipient has:

a. Made oral or written misstatements in response to oral or written questions from the county or state concerning his/ her income, resources or other circumstances which may affect the eligibility or grant amount; or

b. Failed to report changes in income, resources or other circumstances which may affect the amount of the grant; or

c. Failed to report receipt of a grant amount which he/she knew represented an erroneous payment.

NOTE: Authority cited: Sections 10553 and 10554, Welfare and Institutions Code Senate Bill 726 (Chapter 930, Statutes of 2018). Reference: Sections 10553, 10554, 11004, 11004.1, 11008 (Ch. 270, Stats. 1997), 11017, 11155, 11155.1, 11155.2, 11257, 11265.1, 11265.2, 11265.45, 11265.47, 11450, 11450.5, 11451.5, 11452, 11453, and 11453.2, Welfare and Institutions Code; Darces v. Woods (1984) 35 Cal.3rd 871:201 Cal.Rptr. 807, and Ortega v. Anderson, Case No. 746632-0 (Alameda Superior Court) July 11, 1995.

STANDARDS OF ASSISTANCE