Collecting Payments on Claims

A. Claim Liability 1. Liable Individuals All adult household members aged eighteen (18) years or older at the time the over- issuance occurred, sponsors, or other persons, such as an authorized representative who trafficked or otherwise caused an over-issuance or trafficking to occur, that are connected with the household shall be jointly and severally liable for the value of any over-issuance of benefits to the household. 2. Initiating Collection Action a. Local offices shall initiate collection action against all adult members or persons connected to the household at the time an over-issuance occurred. Under no circumstances shall the office collect more than the amount of the claim. b. The local office may pursue collection action against any household that has a member that was connected to the household that received or created an over- issuance. c. The local office shall initiate collection action for an unpaid or partially paid IPV claim even if collection action was previously initiated against the household while the claim was being handled as an IHE claim. Collection action shall be initiated unless the household has already repaid the over-issuance because of an IHE demand letter described in section 4.801.4, C, 1, below, or the local office has documentation that shows the household cannot be located. B. Postponing Collection Action Collection action on IHE claims may be postponed in cases where an over-issuance is being referred to an ADH or a court of appropriate jurisdiction, and the local office determines that collection action will prejudice the case. For cases in which the household is appealing an AE or IHE claim, collection action shall be suspended pending a final decision. A household’s appeal may include, but not be limited to, the establishment of the claim, the amount of the claim, and/or the household’s liability to repay the claim. C. Notifying a Household of a Claim 1. Notice of Over-Issuance and Repayment Agreement Local offices shall initiate collection action on agency error and inadvertent household error claims by sending the household a State-prescribed written demand letter for the over-issuance. The letter shall inform the household of its rights and responsibilities concerning repayment of the claim as well as providing information on the availability of free legal services. All households that owe a claim shall be sent a demand letter. If the claim or the amount of the claim was not established at a fair hearing, the state agency must provide the household with a one-time Notice of Adverse Action. If the hearing official determines that a claim does, in fact, exist against the household, the household must be re-notified of the claim. The demand for payment may be combined with the notice of the hearing decision. Delinquency must be based on the due date of this subsequent notice and not on the initial pre-hearing demand letter sent to the household. 2. Calculation of Claim The local office shall mail the household an explanation of how the claim was calculated, showing each individual month and the cause for the claim. The State-prescribed form shall be used to determine and calculate the amount of the claim and to notify the household of the calculation. The form shall be mailed on a schedule that coincides with the mailing of the demand letter. D. Negotiating Payment Plans Households participating in the program are subject to allotment reduction in accordance with Section 4.801.41. B, unless the claim is being collected at a higher amount, per agreement with the household. Allotment reduction must begin with the first allotment issued ten (10) calendar days after the demand letter is mailed. When a household is subject to allotment reduction, then a repayment agreement is not necessary unless the household wants to make voluntary payments in addition to the allotment reduction or elects to make monthly payments in amount greater than what would be repaid through allotment reduction. If a household is not participating in the program, then the local office shall negotiate a payment schedule with the household for repayment of any amounts of the claim not repaid through a lump sum payment. 1. Establishing a Payment Plan The local office shall negotiate a payment schedule with the household for repayment of any amounts of the claim not repaid through a lump sum payment or through allotment reduction. Payments shall be accepted in regular installments. The household may use SNAP benefits as full or partial payment of any installment. The local office shall ensure that the negotiated amount of any payment schedule to be repaid each month through installment payments is not less than the amount that could be recovered through an allotment reduction. Once negotiated, the amount to be repaid each month through installment payments shall remain unchanged regardless of subsequent changes in the household's monthly allotment. However, both the local office and the household shall have the option to initiate renegotiation of the payment schedule if they believe that the household's economic circumstances have changes enough to warrant such action. 2. Household’s Failure to Respond to the Repayment Agreement If the household is not participating in the program when collection action for claim is initiated or if collection action has been initiated for repayment of a claim and no response is made to the first (1st) demand letter, additional demand letters shall be sent at reasonable Intervals, such as thirty (30) calendar days apart. The demand letters shall be sent until the household responds by paying or agreeing to pay the claim, until the criteria for suspending collection has been met or until the local office initiates ether collection actions. E. Determining Delinquency 1. Claims shall be considered delinquent under the following circumstances: a. If a claim has not been paid by the due date on the demand letter or a satisfactory payment arrangement has not been made. The claim shall remain delinquent until payment is received in full, an allotment reduction is invoked, or a new repayment schedule is negotiated. The date of delinquency for such claims is the due date on the initial demand letter. b. If a satisfactory payment arrangement has been made for a claim and payment has not been received by the due date specified in the established repayment schedule, the date of delinquency for such claims is the due date of the missed installment payment, unless the claim was delinquent prior to entering into a repayment agreement, in which case the due date will be the due date on the initial demand letter. The claim will remain delinquent until payment is received in full, allotment reduction is invoked, or once the local office resumes or renegotiates the repayment schedule. c. For purposes of the Federal Treasury Offset Program (TOP), a delinquent claim is one which is past due more than one hundred twenty (120) calendar days. 2. Claims shall not be considered delinquent under the following circumstances: a. If another SNAP claim for the same household is currently being paid, either through an installment agreement or an allotment reduction, and the local office expects to begin collection on the claim once the prior claim(s) is settled; b. If collection is coordinated through the court system and the local office has limited control over collection action; and c. If a household timely requests a fair hearing on the existence or amount of the claim and the local office suspends collection action pending a final agency decision. A claim awaiting a fair hearing decision shall not be considered delinquent. If the hearing officer determines that a claim does in fact exist against the household, the household shall be sent another demand letter. Delinquency shall be based on the due date of this subsequent demand letter and not on the initial pre-hearing demand letter sent to the household. If the hearing officer determines that a claim does not exist, the claim is deleted and shall be terminated, and all collection activity ceased. F. Joint Collections Received for a Combination SNAP and PA Claim An unspecified joint collection is when funds are received in response to correspondence or a referral that contained both the SNAP and other program claims, and the debtor does not specify to which program to apply the payment. The local office shall ensure that unspecified joint collections are pro-rated among the programs involved. When an unspecified joint collection is received for a combined PA and SNAP claim, each program shall receive its prorated share of the amount collected.