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What Claims May Be Compromised

A Food Stamp claim may be reduced through compromise when:

 the claim is not the result of court-determined fraud nor a finding by the Office of Administrative Hearings that the customer committed an intentional program violation (IPV);  the claim cannot be repaid within three (3) years; and • the claimant’s gross income at the time of the request to compromise the claim does not exceed 200% of the Federal Poverty Level in effect during the month of the request for the household size as it is during the month of request. When calculating the income: o all types of income that would be counted for Food Stamps will be counted, and o all countable income from any adult in the household during the month of request who was also an adult in the Food Stamp household at the time of the overpayment will be counted.

Determining if the Claim Can Be Repaid Within Three (3) Years

When Food Stamps are over-issued to a customer, FNS allows a state Food Stamp agency to collect 10 percent of the customer’s monthly Food Stamp benefits through recoupment. This amount will never exceed 10 percent of the maximum allotment. When determining the amount of a claim that can be repaid within 3 years, IMA must ensure that the Food Stamp recipient is not expected to repay more than the maximum amount that could be collected through recoupment of active benefits.

The amount of the over-issuance that may be expected to be repaid within three (3) years is based on:

a) the total amount of Food Stamp benefits that was over-issued;

b) the size of the claimant’s Food Stamp group in the month the compromise is requested, or if the Food Stamp case is closed, the group size if the household applied for Food Stamps during the month of request; and

c) the maximum Food Stamp Allotment for the Food Stamp group size in effect in the month the compromise is requested. To determine the amount that the Food Stamp claimant may be expected to repay within three years, take ten (10) percent of the maximum allotment for the group size and multiply by 36 (months). If the amount of the claim that can be repaid within three years is more than the total over-issuance, the claim may not be compromised.

Amount of the Claim Reduced by Compromise

If the claimant meets the requirements of “What Claims May Be Compromised” above, the claim may be reduced to the amount that the claimant may be expected to repay within three (3) years. A hardship reduction may also be given when the claimant’s shelter cost, as determined by FS rules, exceeds one-half Example 1

Ms. Barnes is charged a $1,000 over-issuance. She requests a compromise on April 19, 2010. Ms. Barnes’ household in the month of April consists of two persons. The maximum allotment for two persons in April 2010 is $367. Ten (10) percent of $367 is $36.70. Ms. Barnes is expected to repay $1,321 ($36.70 x 36 = $1,321) within three (3) years. Since the over-issuance is only $1,000, the claim cannot be compromised.