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503.8 TANF MANUAL 10/23 Page 3

503.8 NOTIFICATION, RECOUPMENT AND RECOVERY OF OVERPAYMENTS - The local department must promptly recoup or recover any overpayments including overpayments resulting from assistance paid pending hearing decisions. Repayment by either a former or current recipient of the overpayment can occur through recoupment or recovery or both. The agency should discuss voluntary repayment with the client prior to initiating a recoupment. Note: Relative Maintenance Support Payment overpayments for benefit months July 2022, and after, are not subject to recoupment.

A. Notification to the assistance unit must be given before recoupment or recovery of an overpayment begins. After calculating the total amount of the overpayment, the local department of social services must send the Request for Repayment of TANF Payments and/or Payments for VIEW Services’ form. The form is available in the Forms Drawer on the FUSION page. The first page of the form displays the period over which the overpayment occurred and the total amount of the overpayment. The second page allows the individual to select the method of repayment.

A copy of the form must be sent to the TANF recipient or payee or previous TANF recipient or payee and a signed copy filed in the case record. The signed form must remain in the case record until the overpayment has been satisfied. Note: If the recipient or payee fails to sign the form, the unsigned copy must be retained in the case record.

When the signed form is not returned, if 30 days have passed since the initial demand letter was sent on an active TANF case or on a case receiving a VIEW Transitional Payment (VTP), recoupment should begin the following month. When the TANF case closes prior to the month in which recoupment was scheduled to begin and the recipient or payee later reapplies for TANF assistance, she will be advised that recoupment will begin in the first month that the case is eligible for assistance.

B. Recoupment consists of withholding all or part of the assistance payment. An overpayment made to a current recipient or payee must be recouped by reducing the amount of any future assistance payable to any assistance unit of which the individual is a member or payee. Recoupments and withholdings must not be applied to Emergency Assistance payments and Diversionary Assistance payments.

1. When the recipient or payee has no cash reserve or countable income (payment equals the Standard of Assistance for the AU), 10% of the assistance payment may be recouped until the overpayment has been repaid. Under the Repayment Agreement Section on the Claim Information Screen, enter the amount that equals 10% in the “Amount Agreed To Pay” field or the percentage amount in the percentage field.

Example: TANF Payment of $577; Recoup 10% ($57.70); amount of recoupment = ($57.70); New payment amount is $519.30.

2. In situations where a recipient (but not a payee) has earned income, unearned income, or any combination thereof, in addition to the assistance payment, part or all of the assistance payment may be recouped as long as the assistance unit retains at least 90 percent of the standard of assistance when the total gross income and the amount of the current payment are considered.

To calculate the client’s ability to repay the overpayment, the worker will follow steps a - d below:

a. Determine the amount of the overpayment.

* 45 CFR 233.20(a)(13)(i) * §63.2 - 512

TANF Transmittal 77