11000 Incorrect Benefits and Fraud Determination

11125 Establishing Claims and Repayment Agreements - Once the worker has determined the amount of overpayment, a recovery account shall be created on the system for the claim. The claim shall be designated as either a client, agency, or fraud claim. See KEES user manual for more information.

Collection action for client or agency claims with no restored benefits or supplemental payments due shall be initiated by sending the household a repayment agreement.

NOTE: Collection action should not be initiated on suspected fraud claims (either referred for prosecution or for an administrative disqualification hearing) until after the determination of fraud has been made. Refer to 11280 for initiating collection action on fraud claims.

After a claim determination has been made, the local office shall send a repayment agreement and proceed as follows:

Give the household 10 days to respond to the repayment agreement. The reason the claim occurred must be explained on the letter.

If the household responds with a payment on the claim, have the payment submitted according to established procedures.

If the household does not respond, or responds with a statement that it is unable to pay, promises to pay, or asks for a fair hearing, proceed as follows: If the household responds by saying it cannot repay, the worker shall refer the claim to the Central Collection Unit unless there is an active case. For a currently participating household, benefit reduction shall be invoked. See (b) that follows. If a currently participating household fails to respond to the written repayment agreement within 10 days of the date the notice is mailed, the agency shall invoke benefit reduction. If benefit reduction is invoked, only an adequate notice of action is required. Refer to 11126.1 (4) for calculating the amount of benefit reduction. For a currently participating household, benefit reduction shall begin with the first benefit issued after the household has elected benefit reduction, or failed to respond to the repayment agreement within the specified time. NOTE: See 11280 regarding initiating benefit reduction when an open case with an agreement to repay a fraud claim (with the court or the Fraud Unit) fails to make agreed upon payments. If there is ineligibility for continued assistance and the case is closed, the agency is still required to attempt recovery. At a minimum, the agency is required to initiate action to locate the former recipient and, if located, initiate some form of action to recover the overpayment. Such activities must be documented in the case record. To meet these requirements the agency must send a letter to the client at the last known address that advises the client to contact the Central Collection Unit to work out a repayment plan. If the letter is returned, the case record shall be documented as to why it was not delivered. No further action is required when the person cannot be located. However, should the client reapply or the agency later learns the whereabouts of the client, recovery efforts must be reinstituted. In addition, if any non-participating food assistance household does not respond to the repayment agreement sent by the local agency, the Central Collection Unit shall follow their procedures to collect on the claim. All repayment plans shall allow for complete repayment within 36 consecutive months, when possible. If total repayment is not possible within 36 months because of limited available resources, the plan will provide for complete recovery as soon as possible.