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DEPARTMENT FOR AGING AND REHABILITATIVE SERVICES AUXILIARY GRANT PROGRAM ADMINISTRATIVE ISSUES 11/18 CHAPTER L PAGE 14

5. Improper Payments

A payment made by a local department is improper when the following conditions exist:

• the payment is incorrect because:

 the assistance unit does not meet eligibility requirements in the category  payment is in an amount greater than the amount to which entitled (overpayment)  payment is in an amount less than the amount to which entitled (underpayment);

AND

• the incorrect payment was made:

 as an initial payment; or  later than the next possible month following the month in which the change affecting eligibility or the amount of payment occurred.

If there are both underpayments and overpayment, the agency must reconcile the amounts to determine if there is an underpayment or overpayment.

5.1. Underpayment

When it is learned that an underpayment has been made as a result of client error, there shall be no correction of underpayments made prior to the discovery of the error. When it is learned that an underpayment has been made as a result of agency error, including errors by other agencies, there must be correction of the prior underpayment by repayment to the individual as follows:

• the total allowable repayment to the individual shall be the amount of the underpayments. • retroactive repayment of prior underpayments shall be made either in one lump sum payment or by monthly installment payments to the individual until the full allowable repayment is made. The method of payment is to be selected by the local agency. • the retroactive corrective payment shall not be considered as income in determining need and the amount of the continuing