16 Del. Admin. Code § 9000-9095

Current through Register Vol. 28, No. 7, January 1, 2025

Section 9000-9095 - Establishing Claims Against FSP Households

9095.1 General Information

A) A recipient claim is an amount owed due to:

1. Overpaid benefits or

2. Trafficked benefits.

Trafficking means the buying or selling of FSP EBT benefits for cash, other consideration other than eligible food, or the exchange of FSP EBT benefits for firearms, ammunition, explosives or controlled substances.

B) A claim is a Federal debt subject to this and other regulations governing Federal debts. Delaware Health and Social Services (DHSS) will establish and collect any claim by following these regulations.

C) The following individuals are responsible for paying a claim:

1 Each person who was an adult member of a household when the overpayment or trafficking occurred;

2. A sponsor of an alien household member if the sponsor is at fault; or

3. A person connected to the household, such as an authorized representative, who actually traffics or otherwise causes an overpayment or trafficking.

9095.2 Types of Claims

There are three types of claims:

An . . .	is . . .
(1) Intentional Program violation (IPV) claim	any claim for an overpayment or trafficking resulting from an individual committing an IPV, which is when an individual breaks a FSP rule and is found guilty by a court or an administrative disqualification hearing, or signs a waiver to be disqualified to avoid prosecution.
(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 Division of Social Services (DSS).

9095.3 Calculating the Claim Amount

A. Claims not related to trafficking:

(i) DHSS/DSS
must calculate a claim . . . back to at least twelve months prior to when DHSS/DSS becomes aware of the overpayment	and . . . for an IPV claim, the claim must be calculated back to the month the act of IPV first occurred	and . . . for all claims, DHSS/DSS will not include any amounts that occurred more than six years before DHSS/DSS became aware of the overpayment.
(ii) The actual steps for calculating a claim are
DHSS/DSS will. . .	unless . . .	then . . .
(1) determine the correct amount of benefits for each month that a household received an overpayment
(2) 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	DHSS/DSS will apply the earned income deduction.
(3) 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	DHSS/DSS will dispose of the claim referral.
(4) reduce the overpayment amount by any EBT benefits expunged from the household's EBT benefit account according to DSSM 9093. The difference is the amount of the claim	there were no expunged benefits	the amount of the overpayment calculated in #3 of this section is the amount of the claim.

B) Trafficking-related claims:

Claims arising from trafficking-related offenses will be the value of the trafficked benefits as determined by:

1. The individual's admission;

2. Adjudication; or

3. The documentation used for the trafficking determination.

9095.4 Claim Referral Management

DHSS/DSS
must . . .	and . . .
establish a claim before the last day of the quarter following the quarter in which the overpayment or trafficking incident was discovered	ensure that no less than 90 percent of all claim referrals are either established or disposed of according to this time frame.

9095.5 Initiating Collection Action and Managing Claims

A. Initiate collection action on all claims unless the condition under -SB- of this section applies.

B. Do not establish and subsequently collect an overpayment that is not cost effective.

Follow the FNS threshold as follows:

DHSS/DSS will
opt not to establish any claim if . . .	unless . . .	or . . .
DHSS/DSS determines that the claim referral is $125 or less	the household is currently participating in the FSP	DHSS/DSS already established the claim or discovered the overpayment in a Quality Control review.

9095.6 Notification of Claim

A. Mail written notification to begin collection action on any claim.

B. Consider the claim established for tracking purposes as of the date of the initial demand letter or written notification.

C. Provide the household with a one-time notice of adverse action when claims or the amounts of claims are not established at a hearing.

D. The demand letter/claim packet includes language stating:

1. The amount of the claim,

2 The intent to collect from all adults in the household when the overpayment occurred,

3. The type (IPV, IHE, AE) and reason for the claim,

4. The time period associated with the claim,

5. How the claim was calculated,

6. The phone number to call for more information about the claim,

7. Delinquent claims are sent to other collection agencies, who will use various collection methods to collect the claim,

8. The opportunity to inspect and copy records related to the claim,

9. The opportunity to request a fair hearing within 90 days on the decision related to the claim unless the amount of the claim was established at a hearing,

10. Refer delinquent claims to the Federal government for federal collection action,

11. The household can make a written agreement to repay the amount of the claim prior to it being referred for federal collection action,

12. The household may be subject to additional processing charges if the claim becomes delinquent,

13. The State agency may reduce any part of the claim if the agency believes that the household is not able to repay the claim,

14. A due date or time frame to either repay or make arrangements to repay the claim, unless the State agency imposes an allotment reduction, and

15. The percentage used and the effective date when DHSS imposes an allotment reduction.

E. The due date or period for repayment will be no later than 30 days after the date of the initial demand letter.

F. Sending subsequent demand letters or notices is optional.

9095.7 Repayment Agreements

A. Repayment agreements will contain due dates or periods for the periodic submission of payments.

B. The agreement will specify that the household is subject to involuntary collection action(s) if DHSS does not receive the payment by the due date and the claim becomes delinquent.

9095.8 Determining Delinquency

A. Consider a claim delinquent if:

1. The claim has not been paid by the due date and a satisfactory payment arrangement has not been made; or

2. The household established a payment arrangement and fails to make a scheduled payment by the due date.

B. The date of delinquency for a claim under #1 above is the due date on the initial written notification/ demand letter. The claim will remain delinquent until payment is received in full, a satisfactory payment agreement is negotiated, or allotment reduction is invoked.

C. The date of delinquency for a claim under #2 above is the due date of the missed installment payment. The claim will remain delinquent until payment is received in full, allotment reduction is invoked, or DHSS determines to either resume or re-negotiate the repayment schedule.

D. A claim is not considered delinquent if another claim for the same household is currently being paid either through an installment agreement or allotment reduction or DHSS expects to begin collection on the claim once the prior claim(s) is settled.

E. A claim is not subject to the requirements for delinquent debts if DHSS is unable to determine delinquency status because collection is coordinated through the court system.

9095.9 Fair Hearings and Claims

A. A claim awaiting a fair hearing decision is not considered delinquent.

B. Re-notify the household of the claim if the hearing official determines that a claim does exist against the household.

Base delinquency on the due date of this subsequent notice and not on the initial pre-hearing demand letter sent to the household.

C. Dispose of the claim in accordance with DSSM 9095.11 if the hearing official determines that a claim does not exist.

9095.10 Compromising Claims

A. Compromise a claim or any portion of a claim if it can be reasonably determined that a household cannot pay the claim in 36 months. DHSS will compromise the claim by reducing it to an amount that allows the household to make restitution within three years.

B. Use the full amount of the claim (including any amount compromised) to offset benefits in accordance with DSSM 9011.

C. Reinstate any compromised portion of a claim if the claim becomes delinquent.

9095.11 Terminating and Writing-off Claims

A. Terminate a claim when all collection action has ceased.

B. Write off a claim when DHSS determines that continued Federal and State agency collection and reporting requirements will not pay off the claim.

C. Terminate claims as follows:

If . . .	Then DHSS . . .	Unless . . .
(1) the claim is found 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).
(2) all adult household members have died	must terminate and write-off the claim	DHSS plans to pursue the claim against the estate.
(3) 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.
(4) it is determined not cost effective to pursue the claim any further	must terminate and write-off the claim	FNS has not approved DHSS cost-effectiveness criteria.
(5) the claim is delinquent for three years or more	must terminate and write-off the claim	DHSS plans to continue to pursue the claim through Treasury's Offset Program.
(6) DHSS cannot locate the household	may terminate and write-off the claim
(7) a new collection method or specific event (such as a lottery win) substantially increases the likelihood of further collections	DHSS may reinstate a terminated and written-off claim	DHSS decides not to pursue this option.

9095.12 Acceptable Forms of Payment

A. Reducing benefits prior to issuance that includes allotment reduction and offsets to restored benefits.

B. Reducing benefits after issuance from electronic benefit transfer (EBT) accounts.

C. Accepting cash or any of its generally accepted equivalents, which include checks, money orders, and credit/debit cards.

D. Conducting offsets and intercepts, which include, but are not limited to, wage garnishments and intercepts of various State payments. (Consider these collections as -Scash- for FNS claim accounting and reporting purposes.)

E. Requiring the household to perform public service that is ordered by a court and specifically in lieu of paying any claim.

F. Participating in the Treasury collection programs.

9095.13 Collection Methods

A. Allotment reduction as follows:

DHSS must . . .	Unless . . .
(1) 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.
(2) 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.
(3) 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.
(4) Not reduce the initial allotment when the household is first certified	the household agrees to this reduction.
(5) 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.
DHSS may . . .
(6) Collect using allotment reduction from two separate households for the same claim. However, DHSS is not required to perform this simultaneous reduction.
(7) Continue to use any other collection method against any individual who is not a current member of the household that is undergoing allotment reduction.

B. Benefits from EBT accounts.

Allow a household to pay its claim using benefits from its EBT benefit account.

(1) For collecting from active (or reactivated) EBT benefits . ..
DHSS	or . . .	and . . .
needs written permission which may be obtained in advance and done according to the written agreement requirements below	oral permission for one time reductions with DHSS sending the household a receipt of the transaction within 10 days	the retention rules do apply to this collection.
(2) For collecting from stale EBT benefits . . .
DHSS . . .	and . . .	and . . .
must mail or otherwise deliver to the household written notification that DHSS intends to apply the benefits to the outstanding claim	give the household at least 10 days to notify DHSS that it doesn't want to use these benefits to pay the claim	the retention rules apply to this collection.
(3) For making an adjustment with expunged EBT benefits . . .
DHSS . . .	and . . .	and . . .
must adjust the amount of any claim by subtracting any amount expunged from the EBT benefit account	this can be done anytime	the retention rules do not apply to this adjustment.

WRITTEN (PERMISSION) AGREEMENT

The written agreement with the household to collect a claim using active EBT benefits must include:

(1) A statement that this is voluntary;

(2) The amount of the payment;

(3) The frequency of the payments (i.e., monthly or one time only);

(4) The length (if any) of the agreement; and

(5) A statement that the household may revoke the agreement at any time.

C. Offsets to restored benefits

Reduce any restored benefits owed to a household by the amount of any outstanding claim. This can be done at any time during the claim establishment and collection process.

D. Lump sum payments

Accept a full or partial payment for a claim by any of the acceptable forms of payment.

E. Installment payments

Accept installment payments made for a claim as part of a negotiated repayment agreement as long as the amount is not less than the amount that would be recovered through allotment reduction.

If a household fails to submit a payment in accordance with the terms of the negotiated repayment schedule, the claim becomes delinquent and is subject to additional collection actions.

F. Public service

The value of a claim may be paid by the household performing public service.

G. Other collection actions

Use any other collection actions to collect claims, such as but not limited to, referrals to collection agencies, state tax refund, lottery offsets, wage garnishments, property liens and small claims court.

H. Unspecified joint collections

When a household sends in a payment based on a notification of a food benefit and cash assistance claim/ overpayment and does not specify what program the payment is for, each program must receive its pro rata share of the amount collected.

9095.14 Refunds for Overpaid Claims

A. Refund a household for any overpaid amounts on a claim as soon as possible after DHSS finds out about the overpayment.

B. Households are not entitled to a refund if DHSS attributes the overpaid amount to an expunged EBT benefit.

9095.15 Interstate Claims Collection

A. When a household moves out of the state of Delaware, DHSS is still responsible for initiating or continuing collection action for any overpayments, unless DHSS transfers the claim to the other state.

B. DHSS may accept a claim from another state if the household with the claim moves to Delaware. Once DHSS accepts this responsibility, the claim belongs to DHSS for future collection and reporting.

C. Report interstate transfers to FNS.

9095.16 Bankruptcy

Act on behalf of FNS in any bankruptcy proceeding against a bankrupt household with outstanding recipient FSP claims.

9095.17 Retention Rates

A. The retention rates for DHSS are as follows:

If DHSS collects an . . .	then the retention rate is . . .
(1) IPV claim	35 percent.
(2) IHE claim	20 percent.
(3) IHE claim by reducing a person's unemployment compensation benefit	35 percent.
(4) AE claim	Zero percent

B. These rates do not apply to any reduction in benefits when DHSS disqualifies someone for an IPV.

9095.18 Treasury Offset Program (TOP)

A. Add debts to TOP when they are 180 days delinquent if the debt is within the ten-year statue of limitation (unless covered by a judgment) and at least $25.00.

Do not refer debts to TOP if:

1. under an automatic stay due to bankruptcy,

2. under litigation,

3. being collected through allotment reduction, or

4. under an approved repayment plan.

B. Non-judgment debts will remain in TOP until they reach the ten-year statue of limitations, except when DHSS can document it is not cost-effective.

Judgment debts can remain in TOP until it is no longer cost effective to retain the debt in TOP.

16 Del. Admin. Code § 9000-9095

13 DE Reg. 1462 (05/01/10)