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503.9 - 503.10 TANF Manual 10/18 Page 5

503.9 CORRECTION OF PRIOR UNDERPAYMENTS - The agency is to correct any underpayment to any person who is currently in need, regardless of whether they are current recipients. (See 305.1.D.2.C.) The local agency shall notify a case not currently receiving assistance, in writing, of requirement to demonstrate their current need (that they would currently be eligible for TANF if they applied) in order to receive underpaid payments. Additionally, when the agency discovers that a household was incorrectly denied/ terminated, the former applicant/recipient must provide verification that the assistance unit was actually eligible for each month subsequent to the incorrect denial/termination. An underpayment will only be calculated for each month such verification is provided.

When it is learned that an underpayment has been made as a result of any (client or agency) error, there must be correction of the prior underpayment by repayment to the client as follows:

1. The total allowable repayment to the client shall be the amount of the underpayments.

2. Retroactive repayment of prior underpayments shall be made either in one lump sum payment or by monthly installment payments to the client until the full allowable repayment is made. The method of payment is to be selected by the local agency.

3. The retroactive corrective payment shall not be considered as income in determining need and the amount of the continuing assistance payment for which the recipient is eligible in the month in which it is paid or the next following month. The TANF maximum payment may be exceeded by the amount of such corrective payment.

The agency must also correct outstanding underpayments to former recipients who have reapplied and are found to be eligible.

The above instructions are not applicable when a corrective payment is made as a result of an appeal to the State Board or a court decision. In such cases, the terms of the State Board decision or court order apply.

At the time a payment is made or increased for the purpose of correcting a prior underpayment, the recipient must be informed in writing of the purpose of this special allowance; the amount and the period for which it will be made; and the fact that it will automatically terminate at the end of the specified period. If this is done and the recipient, at the time the special allowance is terminated, appeals within the advance notice period, assistance need not be continued in the original amount.

503.10 OFFSETTING OVERPAYMENTS AND UNDERPAYMENTS - In cases which have both an underpayment and overpayment, the agency will offset one against the other in correcting the payment.

TANF Transmittal 65