Intentional program violation claims.

(i) For each month that a household received an overissuance due to an act of intentional program violation, the social services district must determine the correct amount of food stamp benefits, if any, the household was entitled to receive. The amount of the intentional program violation claim must be calculated retroactive to the month the act of intentional program violation occurred, regardless of the length of time that elapsed until the determination of intentional program violation was made. However, the social services district must not include in its calculation any amount of the overissuance which occurred in a month more than six years from the date the overissuance was discovered. If the household member is determined to have committed an intentional program violation by intentionally failing to report a change in its household's circumstances, the first month affected by the household's failure to report is the first month in which the change would have been effective had it been reported.

(iii) When determining the amount of benefits the household should have received, the social services district must not apply the 20 percent earned income deduction to that portion of the earned income which the household intentionally failed to report.

(iv) Once the amount of the intentional program violation claim is established, the social services district must offset the claim against any amount of lost benefits that have not yet been restored to the household.