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the department fails to verify that nonexempt group members completed a current work registration form, or the department erroneously classifies a group as categorically eligible and this mistaken classification is the fault of the department (not the fault of SSA or the recipient).

Circumstances Under Which Overpayments are Not Charged or Recovered 6.3.2 BOTH Overpayment claims are not established when: • DHS fails to verify that a group signed the application; • the department has documentation that shows the group cannot be located (such as returned mail with no forwarding address); • the claim amount is $125 or less and the household is not currently participating, unless the overpayment was discovered through a quality-control review; or • an overpayment occurs based on changed circumstances, but the circumstances were reported promptly by the recipient and DHS acted on the reported change in a timely manner. The department must take action on a reported change within 10 days of the report of the change to be considered timely action. (The action taken generally means recalculating benefits and issuing adequate and timely notice of the reduced benefit to the recipient.) If a recipient promptly reports a change but the Department does not act on a reported change within the 10-day standard, an agency error overpayment can be charged for excess benefits that were provided because the Department did not act within the 10-day standard. If a TANF group was subject to quarterly reporting, the group was not required to report income or asset changes between quarterly reporting submissions. Thus, overpayments should not be charged based on income fluctuations for groups subject to quarterly reporting, provided that the quarterly reports were submitted in a timely manner (note that reporting requirements were changed 5/01/01.) For groups now subject to semi-annual or simplified reporting, if a group reports an income change between semi-annual certifications, no overpayment is charged when the income is below the reporting threshold, though benefits are changed prospectively based on the updated income information. Prior to reducing benefits based on new information, adequate and timely notice must be provided (see Chapter 10: Notice of Adverse Action in this Part.) If an overpayment claim is found to be unjustified in an administrative review, fair hearing, or court determination, the claim will be terminated and any money already recovered through recoupment or any other mechanism will be returned to the recipient. Example 1 Ms. Wright receives TANF. In June, she finds a job and gets her first paycheck. She calls her caseworker June 17, two days after receiving her paycheck. She is paid twice a month and earns $150 per paycheck. The caseworker issues a notice on June 19 informing Ms. Wright that her TANF benefits will decrease by $47 per month and her FS benefits will be reduced by $58 based on her new earnings. These changes cannot be effective until August 1 because there are not 15 days between the date the notice is issued (June 19) and July 1, when July benefits are issued. The recipient promptly reported the income change (she reported the earnings by the 10th day of the month following the month she received her first paycheck) and the Department swiftly acted on the information (the notice of reduced benefits was issued within 10 days of receiving the new