An . . . | is . . . |
(1) Intentional Program violation (IPV) claim | any claim for an overpayment or trafficking resulting from an individual committing an IPV. An IPV is defined in § 273.16 . |
(2) Inadvertent household error (IHE) claim | any claim for an overpayment resulting from a misunderstanding or unintended error on the part of the household. |
(3) Agency error (AE) claim | any claim for an overpayment caused by an action or failure to take action by the State agency. |
(i) As a State agency, you | ||
must calculate a claim . . . | and . . . | and . . . |
back to at least twelve months prior to when you become aware of the overpayment | for an IPV claim, the claim must be calculated back to the month the act of IPV first occurred | for all claims, don't include any amounts that occurred more than six years before you became aware of the overpayment. |
(ii) The actual steps for calculating a claim are | ||
you . . . | unless . . . | then . . . |
(A) determine the correct amount of benefits for each month that a household received an overpayment | ||
(B) do not apply the earned income deduction to that part of any earned income that the household failed to report in a timely manner when this act is the basis for the claim | the claim is an AE claim | apply the earned income deduction. |
(C) subtract the correct amount of benefits from the benefits actually received. The answer is the amount of the overpayment | this answer is zero or negative | dispose of the claim referral. |
(D) reduce the overpayment amount by any EBT benefits expunged from the household's EBT benefit account in accordance with your own procedures. The difference is the amount of the claim | you are not aware of any expunged benefits | the amount of the overpayment calculated in paragraph (c)(1)(ii)(C) of this section is the amount of the claim. |
(1) As a State agency, you | ||
must . . . | and you . . . | unless . . . |
establish a claim before the last day of the quarter following the quarter in which the overpayment or trafficking incident was discovered | will ensure that no less than 90 percent of all claim referrals are either established or disposed of according to this time frame | you develop and use your own standards and procedures that have been approved by us (see paragraph (d)(2) of this section). |
(i) You may follow your own cost effectiveness plan and | ||
opt not to establish any claim if . . . | unless . . . | or . . . |
you determine that the claim referral is not cost effective to pursue | you do not have a cost-effectiveness plan approved by us | you already established the claim or discovered the overpayment in a quality control review. |
(ii) Or you may follow the FNS threshold and | ||
opt not to establish any claim if . . . | unless . . . | or . . . |
you determine that the claim referral is $125 or less | the household is currently participating in the Program | you already established the claim or discovered the overpayment in a quality control review. |
(iv) The initial demand letter or notice of adverse action must include language stating: |
(A) The amount of the claim. |
(B) The intent to collect from all adults in the household when the overpayment occurred. |
(C) The type (IPV, IHE, AE or similar language) and reason for the claim. |
(D) The time period associated with the claim. |
(E) How the claim was calculated. |
(F) The phone number to call for more information about the claim. |
(G) That, if the claim is not paid, it will be sent to other collection agencies, who will use various collection methods to collect the claim. |
(H) The opportunity to inspect and copy records related to the claim. |
(I) Unless the amount of the claim was established at a fair hearing, the opportunity for a fair hearing on the decision related to the claim. The household will have 90 days to request a fair hearing. |
(J) That, if not paid, the claim will be referred to the Federal government for federal collection action. |
(K) That the household can make a written agreement to repay the amount of the claim prior to it being referred for Federal collection action. |
(L) That, if the claim becomes delinquent, the household may be subject to additional processing charges. |
(M) That the State agency may reduce any part of the claim if the agency believes that the household is not able to repay the claim. |
(N) A due date or time frame to either repay or make arrangements to repay the claim, unless the State agency is to impose allotment reduction. |
(O) If allotment reduction is to be imposed, a due date or time frame to either repay or make arrangements to repay the claim in the event that the household stops receiving benefits. |
(P) If allotment reduction is to be imposed, the percentage to be used and the effective date. |
As a State agency, if . . . | Then you . . . | Unless . . . |
(A) you find that the claim is invalid | must discharge the claim and reflect the event as a balance adjustment rather than a termination | it is appropriate to pursue the overpayment as a different type of claim (e.g., as an IHE rather than an IPV claim). |
(B) all adult household members die | must terminate and write-off the claim | you plan to pursue the claim against the estate. |
(C) the claim balance is $25 or less and the claim has been delinquent for 90 days or more | must terminate and write-off the claim | other claims exist against this household resulting in an aggregate claim total of greater than $25. |
(D) you determine it is not cost effective to pursue the claim any further | must terminate and write-off the claim | we have not approved your overall cost-effectiveness criteria. |
(E) the claim is delinquent for three years or more | must terminate and write-off the claim | you plan to continue to pursue the claim through Treasury's Offset Program. |
(F) you cannot locate the household | may terminate and write-off the claim | |
(G) a new collection method or a specific event (such as winning the lottery) substantially increases the likelihood of further collections | may reinstate a terminated and written-off claim | you decide not to pursue this option. |
You may collect a claim by: | However . . . |
(1) Reducing benefits prior to issuance. This includes allotment reduction and offsets to restored benefits | You must follow the instructions and limits found in paragraphs (g)(1) and (g)(3) of this section. |
(2) Reducing benefits after issuance. These are benefits from electronic benefit transfer (EBT) accounts | You must follow the instructions and limits found in paragraph (g)(2) of this section. |
(3) Accepting cash or any of its generally accepted equivalents. These equivalents include check, money order, and credit or debit cards | You do not have to accept credit or debit cards if you do not have the capability to accept these payments. |
(4) Conducting your own offsets and intercepts. This includes but is not limited to wage garnishments and intercepts of various State payments. These collections are considered "cash" for FNS claim accounting and reporting purposes | You must follow any limits that may apply in paragraph (g) of this section. |
(5) Requiring the household to perform public service | This form of payment must be ordered by a court and specifically be in lieu of paying any claim. |
(6) Participating in the Treasury collection programs | You must follow the procedures found in paragraph (n) of this section. |
As a State agency, you must . . . | Unless . . . |
(i) Automatically collect payments for any claim by reducing the amount of monthly benefits that a household receives | the claim is being collected at regular intervals at a higher amount or another household is already having its allotment reduced for the same claim (see paragraph (g)(1)(vi) of this section). |
(ii) For an IPV claim, limit the amount reduced to the greater of $20 per month or 20 percent of the household's monthly allotment or entitlement | the household agrees to a higher amount. |
(iii) For an IHE or AE claim, limit the amount reduced to the greater of $10 per month or 10 percent of the household's monthly allotment | the household agrees to a higher amount. |
(iv) Not reduce the initial allotment when the household is first certified | the household agrees to this reduction. |
(v) Not use additional involuntary collection methods against individuals in a household that is already having its benefit reduced | the additional payment is voluntary; or the source of the payment is irregular and unexpected such as a State tax refund or lottery winnings offset. |
You may . . . | |
(vi) Collect using allotment reduction from two separate households for the same claim. However, you are not required to perform this simultaneous reduction. | |
(vii) Continue to use any other collection method against any individual who is not a current member of the household that is undergoing allotment reduction. |
(A) For collecting from active (or reactivated) EBT benefits . . . | ||
You . . . | or . . . | and . . . |
need written permission which may be obtained in advance and done in accordance with paragraph (g)(2)(iv) of this section; | oral permission for one time reductions with you sending the household a receipt of the transaction within 10 days | the retention rules do apply to this collection. |
(B) For collecting from stale EBT benefits . . . | ||
You . . . | and . . . | and . . . |
must mail or otherwise deliver to the household written notification that you intend to apply the benefits to the outstanding claim | give the household at least 10 days to notify you that it doesn't want to use these benefits to pay the claim | the retention rules apply to this collection. |
(C) For making an adjustment with expunged EBT benefits . . . | ||
You . . . | and . . . | and . . . |
must adjust the amount of any claim by subtracting any expunged amount from the EBT benefit account for which you become aware | this can be done anytime | the retention rules do not apply to this adjustment. |
If you collect an . . . | then the retention rate is . . . |
(i) IPV claim | 35 percent. |
(ii) IHE claim | 20 percent. |
(iii) IHE claim by reducing a person's unemployment compensation benefit | 35 percent. |
(iv) AE claim | nothing. |
7 C.F.R. §273.18