137.57 Overpayments

A Diversion overpayment will occur in the following situations:

It is later determined that the household was not eligible for benefits.

Receiv es TANF benefits within a Diversion period.

Receiv es a Diversion payment in a month containing any days when a recipient received cash assistance.

Receiv es more than one Diversion payment in a Diversion period (by same ES relative).

Receiv es more than one Diversion payment in 12 months.

NOTE: When TANF and Diversion benefits overlap, the CAO will calculate the resulting Diversion overpayment for full calendar months. To enter the overpayment for Diversion, the CAO will use Reason Code 59. See ARRC Data Entry Procedures in Using ARRC .

O VERPAYMENT BEGIN DATE

If Diversion and cash assistance benefits overlap in the same month, the overpayment begins on the first day of the Diversion month in which cash assistance is authorized -- through the last day of the Diversion perio d .

EXAMPLE: Ms . Hughes and infant son receive a Diversion payment for the Diversion period, April 1 through June 30. Ms . Hughes spends Diversion funds, moves to another county, and receives ongoing TANF benefits beginning May 15. This means the new CAO, in error, authorized TANF benefits in a Diversion period. Ms . Hughes’ situation does not qualify as an exception. See Section 137.521 . The new CAO files a Diversion overpayment from the first day of the Diversion month that overlaps the TANF benefits (May 1) through the end of the Diversion period (June 30).

NOTE: When a family moves to another county where the new CAO, in error, authorizes benefits resulting in a Diversion overpayment, the new CAO is responsible for handling the Diversion overpayment and contacting the first CAO for relevant details of the case.

PAYING DIVERSION OVERPAYMENT AND RE-APPLYING FOR DIVERSION

Although a recipient budget group has paid a Diversion overpayment in full, the CAO may not authorize Diversion again until the 12-month time frame from the original date of the Diversion application has expired.

EXAMPLE: The CAO files a Diversion overpayment because the Lyon family received both Diversion (April 17 application date) and TANF benefits in April. The Lyons pay the overpayment in full, and their TANF benefits end in June. Later that year, the Lyons apply for another Diversion payment and tell the CAO they are entitled because they paid back the April Diversion overpayment. The CAO cannot authorize Diversion for the Lyon family until April 17 of next year (application date of the original Diversion payment).

WHEN TO FILE AN OVERPAYMENT

RECEIVING DIVERSION, THEN CASH ASSISTANCE DURING SAME MONTH(S)

The CAO may authorize cash assistance benefits in a Diversion period in error – or may make a valid exception. See 137.521 . In either case, the CAO must file an overpayment.

EXAMPLE: The CAO authorizes a Diversion payment for Ms. Burns and two children to cover February, March, and April needs. On March 10, the budget group applies for TANF and verifies their home flooded the previous day. With BOP approval, the CAO determines the budget group's situation is an exception, authorizes TANF and informs Ms. Burns of an overpayment for March 1 through April 30 (two full months of Diversion).

RECEIVING TANF, THEN DIVERSION IN SAME MONTH

To be eligible for Diversion, an applicant family cannot have received cash assistance any days in the Diversion application month. The budget group may be eligible for Diversion the following month.

EXAMPLE: When Ms. Web and child move to another county, Ms. Web requests TANF benefits be closed. Ms. Web’s last semi-monthly TANF check covers five days in July. In the new county, Ms. Web receives a Diversion payment to cover July needs until a new job start. Because the family already received TANF benefits for five days in July, the new CAO should not have authorized a Diversion payment for July. The new CAO files an overpayment from July 1 through 31 (1 full month of Diversion).

RECEIVING OVERLAPPING DIVERSION BENEFITS

An overpayment occurs when a budget group receives a second Diversion payment within 12 months – or receives two Diversion payments in any given month.

EXAMPLE: With a January 11 th application, Mr. Willis receives a Diversion payment for January, February, and March needs. The same year, the family moves to another county, and the new CAO authorizes another Diversion payment for September needs. Discovering the family received two Diversion payments in 12 months, the new CAO files an overpayment for September 1 through September 30 (1 full month of Diversion). The family cannot receive a TANF Diversion payment until January 11 of next year.

W HEN NOT TO FILE AN OVERPAYMENT

NOT SPENDING DIVERSION FOR INTENDED PURPOSE

Although an applicant does not spend a Diversion payment on the specific needs indicated at application, the CAO will not file an overpayment. If the family returns to the CAO for help with original needs that Diversion should have covered, the CAO will assist the family in the best possible way.

EXAMPLE: On June 4, Mr. Nickels receives a June Diversion payment to cover the $500 June rent. On June 15, Mr. Nickels applies for and receives an ESA to pay the June rent to prevent eviction. Mr. Nickels tells the CAO that the Diversion funds were used for other expenses. The CAO can authorize ESA with no need for a Diversion overpayment.

RECEIVING UNEXPECTED INCOME IN DIVERSION PERIOD

If a budget group receives a Diversion payment, and unexpected income arrives during the Diversion period, the CAO will not file an overpayment. The CAO will consider this income as meeting the family’s unspoken needs.

EXAMPLE: The CAO authorizes a Diversion payment for Mr. Angus, and family to cover February, March, and April expenses. On February 20, earlier than expected, Mr. Angus receives a $3,000 income tax refund. The CAO does not file a Diversion overpayment.

STARTING NEW JOB EARLIER THAN EXPECTED

If a new job starts earlier than expected, to give the Diversion recipient earned income during the Diversion period, the CAO does not file a Diversion overpayment.

EXAMPLE: The CAO authorizes a Diversion payment for Ms. Matthews and child to cover September, October, and November expenses until work begins at a new candy factory on December 1. When the factory opens ahead of schedule, Ms. Matthews starts work on October 2. The CAO does not file a Diversion overpayment.

EXPERIENCING CERTAIN HOUSEHOLD COMPOSITION CHANGES

If a single-parent family receives a Diversion payment, and the spouse, who was not part of the Diversion household, moves back into the household -- the CAO will not file an overpayment, even if the spouse has substantial income.

EXAMPLE: Mrs. Sims and children receive a Diversion payment to cover April, May, and June needs until employment begins in July. A year ago, Mrs. Sims separated from spouse , whose whereabouts were unknown. On May 10, Mr. Sims unexpectedly shows up, moves in the household, and supports the family with income from a high-salaried job. The CAO does not file a Diversion overpayment.

If a parent who is an ES for a Diversion payment moves from the household during the Diversion period, the children may move into another household with an adult who was not an ES as part of the original Diversion budget group. The CAO can authorize a Diversion payment for the household with the new caretaker as the ES (if meeting all ES criteria). An overpayment will not apply.

EXAMPLE: Mr. Blank is an ES for his family’s Diversion payment covering January, February, and March needs until self-employment as an exterior house painter resumes April 1. In late January, Mr. Blank relocates to a warmer climate to paint year-round. Until Mr. Blank can move the children at the school year’s end, they live with their Aunt Jane. To meet February and March family needs until a new job start, Jane becomes the ES for a new Diversion payment. The CAO does not file an overpayment because Jane was not part of Mr. Blank’s Diversion budget group.

RECEIVING OVERLAPPING DIVERSION PAYMENTS IN ANOTHER STATE

The CAO does not file an overpayment when a budget group has overlapping Diversion benefits in another state.

EXAMPLE: Ms. Ritter and child receive a Diversion payment to cover needs for October and November in another state. In late October, the Ritter's move to Pennsylvania and apply for Diversion to cover November needs until Ms Ritter’s new job start. The CAO can authorize this November Diversion payment although it overlaps a Diversion period in another state.

CALCULATING OVERPAYMENTS

Because a Diversion overpayment occurs when a budget group receives cash assistance during a Diversion period -- a Diversion overpayment extends from the first day of the Diversion month in which TANF is authorized, through the last day of the Diversion period. This means that the recipient is responsible to pay back a full month of Diversion for each Diversion overpayment month. A Diversion overpayment is deducted from the cash assistance benefit, to be reduced by up to 5 percent, as specified in the Agreement of Mutual Responsibility (AMR) (PA 1661) .

NOTE: Diversion overpayments cannot exceed a three-month period and will not overlap any other cash overpayments associated with the recipient.

DATA ENTRY OF DIVERSION OVERPAYMENTS

The CAO will file the overpayment in the ARRC system with Reason Code 59 via ARCAPA.

On ARCAFA, the client error field = N. The category = C or U. All Diversion overpayments are coded as administrative error, so the overpayment can be recouped from the TANF grant at a rate of five percent.

The automated screen progression will pass the claim of to a new screen, ARCADV CAO must enter the begin date of the overpayment, which is the first day of the month that TANF is authorized within the Diversion period. The CAO must enter the end date of the overpayment, which is the last day of the Diversion period.

Updated January 31, 2025; replacing April 14, 2023