1142.055.05 Compromising Claims – DSS Manuals

IM-20 March 12, 2021 ; IM-82 August 28, 2007 ; IM-142 December 2, 2005

“Compromise” is the reduction of a claim balance. Agency Error (AE) and Inadvertent Household Error (IHE) claims may be considered for compromise when the household contacts the Family Support Division (FSD) and requests a reduction. Intentional Program Violation (IPV) and Suspected Program Violation (SPV) claims are not compromised. Claims may be compromised if it can be reasonably determined that the household’s economic circumstances dictate the claim will not be paid in three years.

The demand letter advises the household to contact the Family Support Division (FSD) to request a compromise.

Claims are compromised as follows:

A demonstration of need. If a household is receiving SNAP benefits at the time the request is made, this is a sufficient demonstration of need. A Request for Reduction of Claim ( CARS-8 ) form is not necessary in this situation. Make a comment in the case file regarding the request and email the details of the request to the SNAP Program and Policy Unit by email at ColeFSPolicy@dss.mo.gov

To determine the new claim balance after compromise, use the current monthly benefit amount and multiply by 10%, then multiply by 36 months. The resulting number is the reduced claim amount. Record the reason and action taken in the eligibility system. Notify the household of the decision on an Action Taken on Your Food Stamp Case ( IM-112 ).

The claim is re-paid by recoupment as long as the household receives SNAP benefits. If the household’s SNAP case closes and the claim has not been paid in full, the remaining balance is subject to collection.

EXAMPLE: An AE claim is established for $800. The household is receiving SNAP benefits of $190 monthly. Applying a 10 percent, reduction is $19. Multiply $19 by 36 months to equal $684. Reduce the claim amount to $684.

A demonstration of hardship. A household proves that financial, physical or mental hardship would exist if forced to pay. Such situations include, but are not limited to medical hardships, loan payments, etc.

For situations where a household is requesting a compromise due to a hardship, a summary of the household income, expenses, and reason is captured on the Request for Reduction ( CARS-8 ) form and is submitted to the SNAP Program and Policy Unit by email at ColeFSPolicy@dss.mo.gov . Program and Policy staff will render a decision after considering household circumstances and will notify the participant of the decision on an IM-112 Action Taken on Your Food Stamp Case and they also notify Claims and Restitution by email at DLS.CANDRTEAM@dss.mo.gov , of the outcome.

Court ordered restitution. A claim reduced by a decision made through the court shall be established as a separate claim and may be considered for a compromise. The FSD Director and WIU Chief of Investigations will review and make a determination.

WIU seeks prosecution of claims that are based on the household committing fraud. The course of action is ultimately under the authority of the Court. If at disposition the Court orders restitution in an amount less than the claim amount, PIU will establish two (2) separate claims. (A reason for this could be the additional amount is outside the statute of limitations for prosecution.) PIU will first establish a claim for the Court ordered amount, which will be coded SPV. PIU will establish a separate second claim for the remaining amount, which will be coded IHE. The SPV claim shall not be compromised, as modifications to Court orders are to only be made by the Court.

If a household requests a compromise, complete a Request for Reduction of Claim ( CARS-8 ) form and send to the WIU Chief of Investigations. FSD and WIU reviews the circumstances, makes a determination, and notifies the Claims and Restitution Unit. The Claims and Restitution Unit notifies the household on an IM-112 of the decision.

EXAMPLE: A case with an overpayment of $60,000 is submitted for prosecution. At disposition, the Court orders restitution in the amount of $40,000. FSD establishes two claims: $40,000 coded SPV; $20,000 coded IHE. If the household requests a compromise, only the $20,000 IHE claim may be considered.