3.609.4 Recovery A.

The recovery of valid overpayments is required regardless of when the overpayment occurred. Overpayments may be recovered from the client who was overpaid or who fraudulently received the assistance payment or another liable individual. If a client is deceased, overpayments shall be recovered from the deceased client's estate. B. The following rules for recovery do not apply in instances where the state or county department seeks recovery in a case that was transferred to the district attorney and prosecuted through the courts: 1. The client shall be notified of the recovery action to be taken, using the notice rules found at section 3.609.1. 2. When the overpayment is caused by an unintentional error, the client's willful withholding or an administrative error, such overpayment shall be deducted, after notice has been given, from subsequent grant payments while the client is actively receiving Colorado Works grant payments. a. The client may choose to repay the county department the entire amount of the overpayment at one time. The client shall work with the county department to determine how a lump sum repayment can be made. b. When the recovery amount is not to be repaid in a single payment per subsection a above, and the case remains active, the county department shall establish a monthly recovery deduction from subsequent grant payments. The monthly rate of recovery shall be ten dollars or ten percent of the assistance payment, whichever is higher. The following procedure shall be used to arrive at the monthly recovery deduction amount: 1) If the error is a result of an agency error and the client does not meet criteria set forth in section 3.609.4.L, compute ten percent (10%) of the Colorado Works grant payment amount. If the resulting percentage amount is less than ten dollars ($10), the deduction from the grant payment amount shall be ten dollars ($10). 2) Deduct the percentage amount or ten dollars ($10), whichever is higher, from the grant payment. The result shall be rounded to the next lower whole dollar amount, if not already a whole dollar amount. This rounded amount is the final payment amount. 3) When the authorized payment amount is less than ten dollars ($10), the case is considered a “no payment” case and no deduction shall be made. 4) When the recovery is due to a fraudulent action on the part of the client and interest may be added thereto, the interest amount shall not be included in the grant payment deduction unless the client agrees to such inclusion. If the client does not so agree, the interest amount shall be collected separately. 5) The amount of the grant payment deduction for recovery shall be recorded in the client's case file and collected via the statewide automated system. c. The county department shall not establish a claim unless the amount of the claim is greater than $200, except in the following circumstances: 1) The overpayment is identified through a federal or state level quality control review; or, 2) The claim is being pursued as and results in an IPV. 3. When the overpayment is caused by an unintentional error, the client’s willful withholding of information or an administrative error, and the Colorado Works case is no longer active, recovery of such overpayment shall be based upon the public assistance repayment agreement form or other methods of recovery. a. The county shall establish a monthly repayment agreement with a former client. The repayment agreement shall not exceed twenty-five percent (25%) of available monthly income. Determination of the repayment amount must be clearly documented in the electronic case file. b. The client may choose to repay the county department the entire amount of the overpayment at one time. The client shall work with the county department to determine how a lump sum repayment can be made. c. The county department may write-off unpaid valid claims as follows: 1) Valid administrative error claims less than one hundred twenty-five dollars ($125.00) can be written off ninety (90) days after the termination of Colorado Works. 2) Valid claims for client error, fraud, and IPV less than three hundred dollars ($300.00). 3) Any unpaid valid claim of one hundred twenty-five dollars ($125.00) or more for an individual who was not convicted of an IPV or fraud specific to the overpayment, is no longer receiving public assistance from Colorado Works, Adult Financial, or SNAP, and the overpayment was established six (6) or more years ago, and the county department has determined that it is no longer cost effective to pursue collection. 4) Once written off, a claim is not subject to recovery. d. If the client begins to receive Colorado Works grant payments again after the overpayment has been established and still has a claim balance, the deduction of grant payments shall occur as described in section 3.609.5. C. The client may issue the state a refund of any overpayments from his or her existing balance of Colorado Works grant payments on his or her electronic benefits transfer (EBT) card by contacting the county department. This requires a written statement from the client. D. Clients are not entitled to payments that were paid in error or mistakenly provided to the client based on a data entry error into the statewide automated system or an error resulting from the statewide automated system. The county shall create a claim and may retrieve the payments from the client’s EBT card within twenty-four (24) hours of the issuance without prior written authorization by the client. The client shall have no appeal rights in relation to this payment because he or she was not eligible for the initial receipt of the payment(s) in the first instance. When payments issued in error are not retrieved from the client’s EBT card within twenty-four (24) hours, funds shall not be taken from the card using this method unless permission is granted from the client in writing using the state prescribed form. If permission is not granted, the county department shall pursue other methods of recovery. E. The client may request voluntary deductions be applied to the overpayment. These are considered to be an amount in addition to the deduction from the grant payment as established through the recovery calculations. The client shall be provided written confirmation of the amount to be deducted and that he or she has the right to stop the voluntary deduction at any time by written request. F. A claim may be filed against the estate of a client for overpayment. This includes cases where overpayments were made and not recovered. The county department's legal advisor must be consulted in determining the amount of assistance payments for which a claim is to be filed. G. In accordance with sections 26-2-133 and 39-21-108, C.R.S., the State and county departments may recover overpayments of public or medical assistance benefits through the offset (intercept) of a taxpayer's state income tax refund. Tax refunds shall not be offset in instances where the taxpayer is making regular, ongoing payments as agreed to in the public assistance repayment agreement and/or based on arrangements between the taxpayer and the county(ies). Unless agreed to by the client, the county shall not offset tax refunds during the same month the client makes a payment on a claim if the payment agreement was established prior to the offset. Rent rebates are subject to the offset procedure. The offset of the taxpayer state income tax refund and/or rent rebate may be used to recover overpayments that have been: 1. Determined by final agency action; or, 2. Ordered by a court as restitution; or, 3. Reduced to judgment. H. Prior to certifying the taxpayer's name and other information to the Colorado Department of Revenue, the Colorado Department of Human Services 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 overpayment. In addition to the requirements of section 26-2-133(2), C.R.S., the pre-offset notice shall include the name of the county department claiming the overpayment, the program that made the overpayment, and the current balance owed. I. Effective August 1, 1991, the taxpayer is entitled to object to the offset by filing a request for a county conference or state level fair hearing within thirty (30) calendar days from the date that the state department mails its pre-offset notice to the taxpayer. In all other respects, the procedures applicable to such hearings shall be those that are stated in section 3.609.7. At the hearing on the offset, the county department or ALJ shall not consider whether an overpayment has occurred because overpayment has already been otherwise legally established, but may consider the following issues if raised by the taxpayer in his or her request for a hearing: 1. Whether the taxpayer was properly notified of the overpayment; 2. Whether the taxpayer is the person who owes the overpayment; 3. Whether the amount of the overpayment has been paid or is incorrect; 4. Whether the debt created by the overpayment has been discharged through bankruptcy; or, 5. Whether other special circumstances exist, (i.e., facts that show that the taxpayer was without fault in creating the overpayment and will incur financial hardship if the income tax refund is offset). J. If a tax refund offset is established, an overpayment shall not be recovered using another method in the month the offset occurs unless prior authorization is received from the individual making the recovery payments. K. The county department is required to pursue collection of the overpayment from the client/responsible payee who managed and administered the Colorado Works funds. The county department shall pursue all available overpayment recovery options to collect the overpayment from the client/responsible payee first and then any other liable individuals legally responsible for overpayments, unless otherwise specified. 1. In instances where a trustee has used a client's trust income or property in a manner contrary to the terms of the trust, the county department shall: a. Determine whether an overpayment has occurred as a result of the client’s loss of income based on the trustee’s improper actions; b. Consult with the county attorney or other legal resource to determine how to pursue action against a trust/trustee; c. Advise the trustee of the overpayment circumstances; and d. If the trustee disagrees with such circumstances and overpayment, pursue the recovery establishment and collection through appropriate legal means; or e. Take appropriate steps to secure repayment with the cooperation of the trustee; or, f. Report such behavior or action by the trustee to the county protective services to ensure the protection of the client’s rights in the trust. 2. In instances where a power of attorney has used his or her legal authority for purposes other than for the benefit of the client, the county department shall: a. Determine whether an overpayment has occurred as a result of the power of attorney’s improper actions; b. Consult with the county attorney or other legal resource to determine how to pursue action against a power of attorney; c. Advise the holder of the power of attorney of the overpayment circumstances; and, d. If the holder of the power of attorney disagrees with such circumstances and overpayment, pursue the recovery establishment and collection through appropriate legal means; or e. Take appropriate steps to secure repayment with the cooperation of the holder of the power of attorney; or f. Report such behavior or action by the trustee to the county protective services to ensure the protection of the client’s rights and benefits. L. In any case in which an overpayment has been made, there shall be no recovery from any person: 1. Who is without fault in the creation of the overpayment; and, 2. Who has reported any increase in income or other circumstances affecting the client's eligibility within the timely reporting requirements for the program; and, 3. Who would be deprived of income required for ordinary and necessary living expenses such that it would be against equity and good conscience to seek recovery. The fact that the client is receiving public assistance shall not be the only factor in making a determination that the person would be deprived of income required for ordinary and necessary living expenses and that equity and good conscience exist. a. If a client has ten (10) percent or more of income remaining after necessary living expenses, he or she shall not be considered deprived of income. b. If a client’s expenses exceed his or her income, additional questions must be asked to determine how he or she is meeting expenses to ascertain if other income (i.e. gift, in-kind) needs to be included in the income calculation. M. When the overpayment recovery is not pursued, such fact, together with the reason, shall be documented in the statewide automated system. All information pertaining to the reason, establishment, and collection of claims shall be retained in the case record until the claim is written off or paid in full.