3.609.3 Overpayments

The county department shall establish a claim on an overpayment before the last day of the quarter following the quarter in which the overpayment was discovered. A. An overpayment claim shall be adjusted if there is a record of any underpayment(s) for a prior period. Any underpayment must be applied to the overpayments in the following hierarchy: 1. Fraud or IPV claims first, 2. Client error claims second; and, 3. Administrative error claims last. B. Liability for an overpayment must be legally established. Methods for legally establishing an overpayment include but are not limited to: 1. An executed promissory note; 2. A court judgment; 3. A final agency action; or 4. A signed public assistance repayment agreement form. The state department’s public assistance repayment agreement form shall be provided to the client once an overpayment claim is established. C. Failure to sign the public assistance repayment agreement form shall be handled as follows: 1. If the client against whom a recovery has been initiated is currently participating in the Colorado Works program and does not respond to the public assistance repayment agreement form within eleven (11) calendar days of the date the notice containing the public assistance repayment form is mailed, grant payment reduction shall begin with the first month following the timely noticing period without further notice. 2. If the client against whom a recovery has been initiated is not participating in the program when a recovery for a claim is initiated or if a recovery has been initiated for repayment of a claim and no response is made to the public assistance repayment agreement form within eleven (11) calendar days of the date the notice is mailed, the county department shall pursue all legal recovery methods in order to recover the overpayment. Legal remedies include, but are not limited to, judgments, garnishments, claims on estates and the state income tax refund intercept process. D. The amount of the overpayments involving income shall be calculated to allow for income disregards described in section 3.606.2. E. All earned and unearned income received by the client are taken into consideration in the computation. In the instances where the overpayment is the direct result of actions tied to the determination of IPV and/or fraud, which resulted in receipt of grant payments in error, or grant payments received that the client was not eligible to receive, the overpaid grant payments shall be recovered from the client and/or a liable individual. F. The calculation of overpayment shall begin in the month that the overpayment occurred. 1. Start with the amount issued to the client; 2. Determine the correct payment; 3. Compare the amount issued to the client to the correct payment amount. a. If the amount issued to the client is greater than the correct payment amount, the difference is the overpayment amount. b. If the amount issued to the client is less than the correct payment amount, the difference is the underpayment amount; follow the procedures for underpayment in section 3.609.2.G. 4. If a client does not meet the non-financial eligibility requirements in any month, the client is totally ineligible for the month. Any payment received in such month(s) is an overpayment. G. When the county department has determined that a client has received an overpayment, the department shall: 1. Take action to research the overpayment and determine the amount of the overpayment. 2. Determine if the overpayment is to be recovered. 3. Document the facts and situation that produced the overpayment. Document whether the overpayment is to be recovered. Retain all associated documentation and notices until the overpayment is repaid in full. 4. Determine whether there was willful withholding of information, fraud, or IPV. 5. Provide the client with timely or adequate notice as required by section 3.609.1 of the amount due and the reason for the recovery including: a. The liable individual(s) responsible for the repayment; b. The amount of the claim; c. The period the claim is for; d. The reason for the overpayment including whether the overpayment is a result of fraud/IPV, client error, or administrative error; e. The client’s rights and responsibilities; f. The method of repayment; g. How to obtain free legal assistance; h. The applicable rules concerning the overpayment; and i. Provide the public assistance repayment form. 6. Send quarterly statements with the balance due.