Methods of Collecting Payment on Claims

The local office shall collect claims through one of the following methods: A. Lump Sum The local office shall collect payments for total or partial payments of a claim in one lump sum if the household is financially able to pay the claim; however, the household shall not be required to liquidate all of its resources to make this repayment. If the household requests to make a lump sum cash and/or food benefit payment as full or partial payment of the claim, the local office shall accept this method of payment. B. SNAP Allotment Reduction 1. The local office shall collect payments for claims from households currently participating in the Program by reducing the household's SNAP allotment. For claims where there is a court-ordered judgment for repayment, allotment reduction shall not occur. Prior to reduction, the local office shall inform the household of: a. The appropriate formula for determining the amount of SNAP to be recovered each month; b. The amount of SNAP the local office expects will be recovered each month; and, c. The availability of other methods of repayment. 2. The household's allotment will be reduced based on the recoupment amounts for each type of claim unless a payment schedule has been negotiated with the household. The local office may collect on a claim by invoking benefit allotment reduction on two (2) separate households for the same claim. However, the local office is not required to perform this simultaneous reduction. 3. The amount of SNAP to be recovered each month through allotment reduction shall be determined as follows: a. For AE claims and IHE claims, the amount of SNAP to be recovered each month from a household shall either be ten percent (10%) of the household's monthly allotment or ten dollars ($10) each month, whichever is greater. b. For IPV claims, the amount of SNAP benefit reduction shall either be twenty percent (20%) of the household's monthly allotment or twenty dollars ($20) per month, whichever is greater. 4. Benefits authorized for an initial month will not be reduced to offset a claim. Ongoing benefits will be recouped based on the above criteria. C. Benefits from an EBT Account 1. A household may pay all or a portion of the claim by using benefits from its EBT account. The local office shall obtain written permission from the household to deduct benefits from the EBT account to pay a claim. The written agreement shall be obtained prior to removing benefits from the EBT account and shall include: a. A statement that this collection activity is strictly voluntary; b. The amount of the payment; c. The frequency of the payments (i.e., whether monthly or one (1) time); d. The length of the agreement; and e. A statement that the household may revoke this agreement at any time. 2. If the household provides oral permission, the local office can make a one- time deduction from an active EBT account for a one (1)-time reduction. The county shall provide the household with a written receipt within ten (10) business days. The receipt shall contain the information used for an active EBT account and indicate that this is a one-time reduction. 3. When a local office pursues payment on a claim by applying SNAP benefits from the household’s stale EBT account, prior written notice shall be given to the household of the existing stale EBT account that may be applied to an outstanding claim. The county shall notify the household that the benefits will be applied to the claim unless the household objects to this offset. The household must be given ten (10) calendar days to object before the benefits can be applied as a payment to the claim. A stale EBT account means an account that has benefits but has not been accessed for at least three (3) consecutive calendar months. D. Offset Against Taxpayer's State Income Tax Refund 1. The state department and local office may recover over-issuances of PA benefits through the offset (intercept) of a taxpayer's state income tax refund. Rent rebates are subject to the offset procedure. This method may be used to recover over-issuances that have been: a. Determined by final agency action; b. Ordered by a court as restitution; or, c. Reduced to judgment. 2. Pre-Offset Notice Prior to certifying the taxpayer's name and other information to the Department of Revenue, the state department shall notify the taxpayer in writing at his or her last known address that the state intends to use the tax refund offset to recover the over-issuance. The pre-offset notice shall include the name of the local office claiming the over-issuance, a reference to SNAP as the source of the over-issuance, and the current balance owed. 3. Household Objection to Pre-Offset Notice The taxpayer is entitled to object to the offset by filing a request for a DRC or state-level hearing within thirty (30) calendar days from the date the state department mails the pre- offset notice to the taxpayer. At the hearing on the offset, the local office or administrative adjudicator shall not consider whether an over-issuance has occurred, but may consider, if raised by the taxpayer in his or her request for a hearing, whether: a. The taxpayer was properly notified of the over-issuance ; b. The taxpayer is the person who owes the over-issuance ; c. The amount of the over-issuance has been paid or is incorrect; d. The debt created by the over-issuance has been discharged through bankruptcy; e. Other special circumstances exist as described in Section 4.801.42. E. Federal Treasury Offset Program (TOP) The TOP, including the Federal Salary Offset Program (FSOP), is a mandatory government-wide delinquent debt matching and payment offset system in which Colorado SNAP participates. The TOP allows collection of delinquent debts by intercepting any allowable payment from the federal government. Federal payments eligible for offset include federal income tax refunds, federal employee salary, federal retirement payments (including military), contractor or vendor payments, and federal benefits such as Social Security and railroad retirement. 1. Claims Submitted for Offset a. A delinquent claim may be submitted to the USDA, FNS for the TOP. To submit a claim to the TOP, the claim must be determined to be past due and legally enforceable. To determine that a claim is past due and legally enforceable, it must be determined that notification and collection attempts have taken place. b. For purposes of the TOP, a delinquent claim is one which is past due more than one hundred twenty (120) calendar days. c. A claim is not considered delinquent if a fair hearing is pending concerning the claim; or the claim has either been discharged by bankruptcy or is subject to the automatic stay of the bankruptcy; or the claim is not considered delinquent as described within Section 4.801.4, E, 2. 2. Processing Fee TOP, including the FSOP, is authorized to apply a processing fee each time a successful offset for collection occurs. Federal payroll offices participating in the TOP process may add another separate processing fee. The delinquent SNAP debtor is responsible for the fee each time it is applied. A TOP offset taken in error and later refunded will have the processing fee refunded, except for partially refunded offsets. 3. Notifying a Household of the TOP At the time delinquent debts are sent to be certified to the FNS for intercept by the TOP, all delinquent debts for every individual are sent at one time. Prior to a claim being certified to the FNS as a debt owed to the local office, the individual shall be mailed an offset notice. The notice shall provide the following information: a. The local office has documentation that the individual identified with his or her Social Security Number (SSN) is liable for the specified unpaid balance of the claim; b. The individual has been notified about the claim and prior collection efforts have been made. The claim is past due and legally enforceable. All adults are liable for the over-issuance of SNAP if they were household members when the SNAP benefits were over-issued. False statements concerning such liability may subject individuals to legal action (see Section 4.801.4, A); c. Debts over one hundred twenty (120) days delinquent to be referred to the Treasury for an administrative offset. The local office intends to refer the claim within sixty (60) days of the date of the notice unless the individual makes other repayment arrangements acceptable to the local office; d. Instructions on how to pay the claim, including the name, address, and telephone number of a person in the county who can discuss the claim and the intended offset with the individual; e. The individual is entitled to request a review of the debt’s eligibility for referral to TOP. Individual review requests must be honored, regardless of whether they are received after the deadline requested. Claims that are currently under review will not be referred for the tax intercept; and f. All claims for the household that are to be certified to TOP. 4. The individual may document any legitimate reason that the claim is not past due or legally enforceable. 5. The individual should contact the local office if they believe that a bankruptcy proceeding prevents the collection of the claim or if the claim has been discharged in bankruptcy. 6. In some circumstances, the married individual may want to contact the IRS before filing his/her income tax return. This is true if the individual is filing a joint return and his or her spouse is not responsible for the SNAP claim and has income and withholding and/or estimated federal income tax payments. In such cases, the spouse may receive his or her portion of any joint return based on procedures prescribed by the IRS. 7. A federal employee may have his or her net disposable pay subject to garnishment under the offset. The Treasury may garnish up to fifteen percent (15%) of the net disposable pay. A federal employee may petition for a hearing only at the federal level to dispute the existence or the amount of the claim. The hearing occurs after the review period at the state-level and the subsequent submission to the Treasury as a valid offset. 8. An OOA adjudicator within CDHS will review the proposed offset and issue only a final agency decision. The OOA shall find that the claim is past due and legally enforceable unless the household can provide documentation to show one (1) of the following: a. The claim is not delinquent or was already paid, and the individual provides proof of payment. b. The individual is not the person that is liable for the claim. c. A bankruptcy action prohibits collection of the claim because the automatic stay under Section 362 of the Bankruptcy Code is in effect with respect to the individual or his or her spouse, or that the claim was discharged by a bankruptcy proceeding. d. There is some other reason that the claim is not delinquent or is not legally enforceable. 9. The final agency decision by the OOA regarding the paper review will be issued by means of written findings. No oral argument is permitted. The written findings shall include the following: a. If the OOA determines that the claim is past due and legally enforceable: 1. The individual shall be notified that the claim will continue to be referred for the offset; and, 2. The individual is entitled to have the FNS review the OOA’s decision. FNS must receive a request to do so within thirty (30) calendar days after the date of the state agency's notice of review decision. A request for FNS review shall include the individual's SSN. The notice shall also provide the address of the regional office including the phrase “Tax Offset Review” in the address. b. If the OOA determines that the claim is not past due or legally enforceable, it shall notify the individual and the local office that the claim will not be referred for the offset. c. While the OOA or FNS is conducting a review of the debt, the debt is not eligible for referral to TOP. F. Pursuing Other Collection Activities 1. Local offices may pursue other collection actions, as appropriate, to obtain restitution of a claim against any household which fails to respond to a written demand letter for repayment of an agency error or inadvertent household error claim. In cases where a household member was found guilty of fraud by a court of appropriate jurisdiction, the local office may request that the matter of restitution be brought before the court or addressed in the agreement reached between the prosecutor and individual. 2. Other collection actions that the local office may pursue include the use of a collection agent, civil action, or criminal filing. 3. If the local office chooses to pursue other collection actions and the household pays the claim, payments shall be submitted to the Colorado Department of Human Services as required by Section 4.801.8. The local office's retention of recoveries shall be based on the actual amount collected from the household through such collections actions. 4. The local office shall not use other, involuntary collection methods against individuals in a household that is already having its benefit reduced.