Collection Methods

Overissuance claims may be collected by any of the methods described in this section.

Lump Sum

The household may choose to repay all or part of an overissuance claim in a lump sum payment.

When the household makes a partial lump sum payment, arrange for repayment of the remainder of the overissuance claim by another method of collection.

Payments of cash or CalFresh benefits will be accepted from clients by:

The district office fiscal clerk, or
Department of Tax and Collections
110 W. Tasman Drive
San Jose, CA 95134

Allotment Reduction

Initial Allotment

A household's initial allotment may not be reduced to collect an overissuance, even if the allotment is paid retroactively.

ExampleExample

A household with a $50 IHE overissuance balance is discontinued 4/30 and reapplies 5/15. May benefits cannot be reduced to collect the outstanding overissuance. June benefits may be reduced to collect the overissuance if a new Repayment Agreement is signed in May, and:

May and June benefits are issued simultaneously, or
There is time after a 10-day notice to reduce June benefits.

Administrative Error (AE) OIs Which Occurred Prior to 10/1/96

Active households with an AE O/Is which occurred PRIOR to October 1, 1996 may choose, but are not required, to repay by allotment reduction. Households which choose to repay an AE OI which occurred prior to October 1, 1996 by allotment reduction:

May choose the amount by which benefits are reduced.
Are not subject to a minimum or maximum allotment reduction amount. The household may choose an allotment reduction that is higher or lower than 5% or 10% rates.

AE OIs Which Occurred On or After 10/1/96 and Were Established Prior to 3/1/00

Active households with an AE OI which occurred ON OR AFTER October 1, 1996 and were established PRIOR to 3/1/00 may CHOOSE to repay the overissuance by allotment reduction.

Allotment reduction MUST be applied immediately if the household:

Does not respond to the “CalFresh Repayment Notice” (DFA 377.7B1 or DFA 377.7F) within 30 days,
or
If the agreed amount on the “CalFresh Repayment Notice” is less than the required allotment reduction amount.

A ten-day notice is not required, unless the reduction amount and effective date are different than what was stated by the County on the Repayment Agreement when it was mailed to the client.

Reduce benefits each month by $10 or 10% of the household's monthly allotment, whichever is greater.

Exception: AE OIs claims in which the noticing requirement was met in 2/00 to begin allotment reduction in 3/00 fall under the Lomeli v. Saenz court case settlement. (See below)

Administrative Error (AE) OIs Established ON or AFTER 3/1/00 - Subject to the Lomeli v. Saenz Court Case Settlement

Active households with an AE OI which was established ON OR AFTER March 1, 2000 (including claims in which the noticing requirement was met in 2/00 to begin allotment reduction in 3/00) may CHOOSE to repay the overissuance by allotment reduction.

Allotment reduction MUST be applied immediately if the household:

Does not respond to the “CalFresh Repayment Notice” (DFA 377.7B1 or DFA 377.7F) within 30 days, or
If the agreed amount on the “CalFresh Repayment Notice” is less than the required allotment reduction amount.

A ten-day notice is not required, unless the reduction amount and effective date are different than what was stated by the County on the Repayment Agreement when it was mailed to the client.

Under the Lomeli v. Saenz court case settlement, reduce benefits each month by $10 or 5% of the household's monthly allotment, whichever is greater for up to 36 consecutive calendar months. The 36-month period begins with the first month of allotment adjustment and continues for 36-calendar months, regardless of whether the client remains on aid or not.

At the end of the 36-month time period, regardless of whether or not the client is on aid at that time, and regardless of whether or not allotment reductions have been made the entire time, any remaining uncollected balance is forgiven/compromised and is NOT to be collected by allotment reduction or by any other means.

Allotment reduction amounts CANNOT BE EXCEEDED for an AE. However, additional payments may be made to Public Assistance Collections.
A household that wishes to make payments in excess of the minimum monthly amount may request to negotiate a new Repayment Agreement.

Inadvertent Household Error (IHE) or Intentional Program Violation (IPV)

Active households with an IHE or IPV overissuance may CHOOSE to repay the overissuance by allotment reduction. Households which do not respond to the “CalFresh Repayment Notice” (DFA 377.7B1 or DFA 377.7F) within 30 days must repay, and shall have an allotment reduction applied immediately. A ten-day notice is not required, unless the reduction amount and effective date are different than what was stated by the County on the Repayment Agreement when it was mailed to the client.

IHE
- Reduce benefits each month by 10% of the household's monthly allotment or $10, whichever is greater.
IPV
- Reduce benefits each month by 20% of the household's monthly allotment or $20, whichever is greater.

Extra Payments

Allotment reduction amounts CANNOT BE EXCEEDED for an AE (that occurred on or after 10/1/96), IHE or IPV. However, additional payments may be made to Public Assistance Collections. A household that wishes to make payments in excess of the minimum monthly amount may request to negotiate a new Repayment Agreement.

Multiple Allotment Claims

Overissuances of different types (i.e., AEs, IHEs & IPVs) are to be collected ONE at a time by means of allotment reduction. The following rules are to be applied to determine the order of adjustment when there are multiple types of overissuances:

If...	Then...
The allotment reduction has begun on an AE OI subject to the Lomeli v. Saenz agreement,	DO NOT stop the adjustment until the 36-month period has expired.
There are no current overissuances being adjusted,	Adjust the overissuance subject to the greatest allotment reduction first (i.e., IPVs before IHEs, IHEs before AEs).
There are several overissuances of the same type,	Adjust the oldest one first.

Installments

The household may choose to repay the overissuance in regular monthly installments of cash or CalFresh benefits.

IHE or IPV

The initially negotiated installment amount must be at least equal to the amount which could be recovered under allotment reduction. Once negotiated, the installment amount shall not be subject to change based on fluctuations in the household's monthly allotment.
A household that is making payments in excess of the minimum monthly allotment reduction amount may request to negotiate a lower monthly installment, and sign a new Repayment Agreement.

Payments

Payments of cash or CalFresh benefits will be accepted from clients by:

The District Office fiscal clerk, or
Department of Tax and Collections
110 W. Tasman Drive
San Jose, CA 95134

Benefit Offset

When a case has both an underissuance and an IHE or IPV overissuance, offset benefits by subtracting the amount of the underissuance from the IHE or IPV overissuance.

DO NOT use an underissuance which occurred more than 12 months prior to discovery to offset an overissuance, unless there is a direct regulatory exception.
DO NOT use supplemental payments that result from a retroactive payment of the initial month's allotment to offset an overissuance claim.
DO NOT offset an underissuance against an administrative overissuance. The CWD is permanently enjoined under the “Lopez v. Glickman” court order from offsetting an AE OI against any amount of supplemental payments which have not yet been restored to the household.

Note: Refer to “Regulation” section in this chapter for further information on U/I and supplemental payments [63-802.12, 63-802.14].

Tax Refund Intercept

The Public Assistance Collection Unit may intercept state tax refunds for repayment on outstanding AE (that occurred on or after 10/1/96), IHE, and IPV overissuance claim balances. This intercept may ONLY take place when the eligibility case is closed.

Note: For AE OIs covered by the Lomeli v. Saenz court case settlement, the intercept can only be done during the 36-month period. Once the 36-month period has expired and the claim has been compromised, no further collection is permitted.

This method can NOT be used on AE overissuances that occurred prior to 10/1/96. The “Aktar v. Anderson” court ruling prohibits the collection of AE OIs that occurred prior to October 1, 1996 by involuntary means.

Unspecified Joint Collection

An unspecified joint collection is when funds are received in response to correspondence or a referral that contained both the CalFresh and other programs claims and the debtor does not specify to which claim to apply the collection.

When an unspecified joint collection is received for a combined public assistance/CalFresh recipient claim, each program must receive its pro rata share of the amount collected.

Supplemental Security Income

Overissuance claims may NOT be collected from SSI funds without the client's permission. The Notices of Action for overissuances contain the following informing language - “You do NOT have to use any SSI benefits you get to repay this overissuance.”

Note: This does not affect benefit reduction or offset. Continue to offset or reduce benefits for all overissuances whenever possible, regardless of whether the household has SSI income.

Incorrect Collection

All funds that are incorrectly or improperly collected on an overissuance must be refunded to the client.