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503.7 TANF MANUAL 12/04 Page 2b

D. Support Related Overpayments - When an overpayment occurs which is the result of the client's failure to redirect support, the client's needs are not to be removed for purposes of calculating the overpayment.

E. Income Related Overpayments - The local agency must determine the correct amount of the payment the assistance unit should have received for those months the assistance unit actually received an overpayment.* Using conversion factors of 4.3 and 2.15, if appropriate based on Section 305.1.B.2.b, screen the income at 185% and at the standard of assistance to determine the monthly payment amount. In cases involving changes required to be reported or payments made pending an appeal decision, the local agency must determine the month that the overpayment initially occurred and all other months as follows:

1. If, due to a misunderstanding or inadvertent error on the part of the assistance unit, an assistance unit failed to report a change in its circumstances within 10 days of the date the change became known to the assistance unit, the first month of an overpayment will be the first month in which the change would have been effective had it been reported in a timely manner.

The local agency may not determine as the first month in which the change would have been effective, any month later than two months from the month in which the change in income occurred, unless it is determined that a verified disability affected the person’s ability to understand the reporting rule. In that situation the local agency worker has the discretion to determine that the overpayment began at the time that the agency first learned about the overpayment or first determined that it had failed to act upon information correctly provided by the individual.

2. If the assistance unit reported a change within the prescribed time limits, but the local agency did not act on the change timely, the first month affected by the local agency's failure to act must be the first month the local agency should have made the change effective. Therefore, if an advance notice was required but was not sent, the local agency must assume that the maximum advance notice period as provided in Section 401.4.C would have expired without the assistance unit requesting a fair hearing.

3. If prospectively ineligible, the full assistance payment is an overpayment.

4. If the prospective determination renders the case eligible, calculate each month's overpayment and apply earnings disregards as indicated in Section 503.7.C., if applicable.

F. Overpayments Not Related to Income - If an overpayment is the result of any factor other than income, the overpayment is to be based on the actual circumstances of the case each month.

* 45 CFR 233.20(a)(13) TANF Transmittal 27