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Establishing a Claim
(MPP 63.801.411)
Recreating Case Circumstances
To recreate case circumstances, calculate the value of the overissuance (OI) by determining the difference between
- the correct amount of benefits the household should have received had there not been an AE, IHE, or IPV, and
- the amount of benefits the household actually received.
When recreating case circumstances, do not consider income changes that the household was not required to report.
Dollar Limit
An overissuance claim must be completed for each overissuance for the COMBINED months of the overissuance.
Administrative Overissuance Threshold
Active Cases
AE OI of $35 or less are not established nor collected for active households.
Inactive Cases
Effective June 1, 2019, Senate Bill (SB) 278 raises the threshold for establishing an AE OI to $400 for inactive households. Therefore, AE OI of $400 or less should not be established if the household no longer receives CalFresh benefits.
Multiple Inactive AE OI Claims
If an inactive CalFresh household has more than one AE OI, each is to be treated as separate, and they should not be combined into a single claim to meet the $400 threshold.
The staff determines that an inactive CalFresh household has two separate $250 AE OI occurrences. These two separate AE OIs are not to be combined into a single $500 overissuance claim to meet the $400 threshold. Since each of the separate AE OIs are less than the $400 threshold, no AE OI claims should be established.
Determination of Active/Inactive Status
When determining what threshold applies to an OI, a household’s CalFresh participation status on the date of discovery must be considered. The date of discovery is the date the OI is calculated. The respective OI threshold is applied based on the household’s CalFresh participation status on the date of discovery.
Note: When determining active and inactive status for household participation in CalFresh, the same policy applied to AE OI is applied to IHE OI.
Cases to be Discontinued
If an AE OI that is $400 or less is discovered for an active HH and it has been determined that the HH will be ineligible for CF benefits prior to establishing the OI, the EW must establish a claim for that OI.
The EW discovers an AE overissuance of $102 for a CalFresh HH during the month of June. This HH is receiving CalFresh benefits in June, but the case is set to discontinue at the end of June due to non-receipt of the SAR 7. Since the household is participating in CalFresh on the date of discovery, it must be considered an active case for OI determination. A claim of $102 must be established since it is above the $35 establishment threshold for an AE on an active CalFresh case.
Discontinuance is Rescinded
If a household’s participation status is inactive on the date of discovery but the HH’s eligibility is reestablished with no break in aid, the OI must be considered discovered on an active household. In this scenario, the previously discovered OI must be established using the OI threshold for an active household.
HH’s CalFresh was discontinued on June 30 due to the non-receipt of SAR 7. The staff discovered an OI of $350 on July 5. However, the HH turns in a completed SAR 7 on July 10th with good cause and benefits are issued for the entire month of July, the staff must begin the establishment process for the $350 OI.
Restoration or Reapplication
If a household’s participation status is inactive on the date of discovery and the inactive status is later restored with a break in aid, or the household submits a new application at a later date with a break in aid, the staff does not need to make a change to the claim. The OI must be considered discovered on an inactive household.
HH’s CalFresh was discontinued on June 30 due to the non-receipt of SAR 7. The staff discovered an AE OI of $350 on July 5. However, the HH turns in a completed SAR 7 on July 20. CalFresh benefits are restored as of July 20 with prorated amount. Since the HH’s eligibility is restored in July with a break in aid, the staff must NOT establish an OI claim for the previously discovered OI of $350.
Any OI above $400, regardless of the HH’s eligibility status for CalFresh benefits, a claim for the OI must be established, and the appropriate collection must be pursued.
The same scenario as above; however, the discovered OI is $450. Although the household will be discontinued on June 30, the OI is above the $400 threshold and the staff must establish the OI and pursue collection.
Inadvertent Household Error (IHE) Threshold
Active Cases
There is no threshold to establish IHE OI claims.
Inactive Cases
Effective June 1, 2019, SB 278 raises the threshold for establishing an IHE OI to $400 for inactive households. Therefore, IHE OI of $400 or less should not be established if the household no longer receives CalFresh benefits.
Note: When determining active and inactive status for household participation in CalFresh, the same policy applied to IHE OI is applied to AE OI.
Establishing OI Claims
Date of Discovery
The date of discovery is the date that budget computation indicates that an overissuance occurred.
Date of Claim Establishment
The date of claim establishment is the date the adequate demand notice (Notice of Action with the Repayment Agreement) is issued to the client and documenting the amount of OI as well as the reason for the OI in case narration.
The chart below shows when to establish an overissuance claim for an overissuance:
| IF THE OVERISSUANCE IS... | AND THE DOLLAR AMOUNT OF THE CLAIM FOR ALL MONTHS COMBINED for EACH CLAIM IS... | CASE STATUS | THEN... |
| An AE OI, |
$35 or less |
Open |
Do not establish an OI claim. |
|
An IHE claim, |
$1 or more |
Open |
Establish an OI claim. |
|
An AE & IHE claim discovered on or after 6/1/2019, |
$400 or less |
Closed |
Do not establish an OI claim. |
|
$400 or less |
Closed but rescinded with NO break-in-aid |
Establish an OI claim. | |
|
Closed but restored with break-in-aid or Reapplied |
Do not establish an OI claim. | ||
|
Over $400 |
Open/Closed |
Establish an OI claim. | |
|
An IPV |
$1 or more |
Open/Closed |
Establish an OI claim. |
Inactive Household:
The household becomes ineligible for CalFresh. The staff discovered OI due to fail to remove a person from the budget, resulting in an overissuance of $50 per month over a six-month period. Since the total overissuance amount is below the threshold ($400) and the household is no longer receiving CalFresh benefits, no OI claim should be established.
Active Household:
The same scenario as above but the household continues receiving CalFresh benefits. An AE OI claim should be established and collection must be processed.
Inactive Household:
A computer error resulted in a $100 AE overissuance in March. In April, the EW forgot to enter decreased housing costs, resulting in a second overissuance of $30. These are two separate overissuances because they were caused by two separate errors. Therefore, each overissuance is considered separately. Since each is under $400, neither one requires an overissuance claim.
CalWORKs Ineligibility When CalFresh Were CE
If the household was classified as CE in the month of the overissuance, it remains CE for purposes of the overissuance calculation, even if there was no eligibility for CalWORKs during the month of the overissuance.
A CE household failed to report a $10,000 bank account and is discovered to have been completely ineligible for CalWORKs. There is no CalFresh overissuance due to excess resources because the household is still considered to have been CE for that time period, and was therefore resource eligible for CalFresh. However, any interest income derived from the bank account must be used to compute an overissuance if it caused a change in the NET income.
A CE household of two people failed to report that the absent parent returned home six months ago and was employed full-time. An overissuance exists and should be computed from the month he would have been added to the CalFresh HH had the information been timely reported. The household is still considered to have been CE during the overissuance period.
CalFresh Overissuance Calculation with a CalWORKs Overpayment
When calculating CalFresh overissuance, include the appropriate CalWORKs grant amount that the household would have received if they had reported the required information in a timely manner and the county had acted promptly.
A client received a CalWORKs grant of $548. The client reported no other income. It was later discovered that there was $200 in unreported unearned income monthly. When this income is used in the CalWORKs budget, it was determined the client should have received a $348 CalWORKs grant.
The EW would use the correct CalWORKs grant of $348 (the amount the client was entitled to) and the $200 unreported unearned income to recompute the CalFresh budget.
OI Occurred in a Month of Allotment Reduction
When there was an allotment reduction in the overissuance month, include the amount of the allotment reduction in the total overissuance. (Do not add the allotment reduction amount back into the balance of the previous overissuance, which was being adjusted.)
A $100 allotment was authorized for 1/03 for a household. Out of this $100, $10 was adjusted as an allotment reduction to reduce a previous overissuance balance from $50 to $40. The household actually received $90 in benefits. Later, it was discovered that the household was ineligible for benefits in 1/03. A second overissuance claim of $100 is established for that month. ($90 transacted + $10 adjusted). No change is made to the balance of the first overissuance. It remains at $40 (less any payments or adjustments subtracted since 1/03).
Timeframe
Previously, as a result of a settlement in the lawsuit of Brown and Espinosa-Tapia v. Lightbourn, effective September 14, 2018, the county was able to establish a claim and collect on an AE and IHE OIs issued up to three-years prior to the date of discovery.
Note: Prior to this settlement, counties were required to calculate the amount of AE and IHE OI, which occurred during the six years preceding the date the OI was discovered, and collect the payments.
Effective July 1, 2022, an AE and a non-fraudulent IHE OI claim may only be established as an OI if all or portion of the OI occurred within a 24-month period immediately prior to the date of discovery.
Any OI that was issued more than 24-months prior to the date of discovery must not be included when calculating the OI claim. The date of discovery must be entered into case narration so that it can easily be determined that the established OI is within the 24-month period.
Important: This 24-month timeframe policy is applied prospectively. Claims established prior to this 24-month timeframe policy must not be recalculated. Except for OI claims that have been later determined to be fraudulent.
In July 2022, it is discovered that the household was overissued benefits starting in June 2019 through May 2022. The county established the OI claim in the same month. The county would only calculate an OI for August 2020 through May 2022, which is when the county discovered the OI. The overissued benefits from June 2019 through July 2020 fall beyond the 24-month timeframe and will not be included in calculating the OI.
Forms/Correspondences
The following forms are required when establishing an overissuance claim.
- A “Claim Determination Worksheet” DFA 842 is ALWAYS required for overissuances that occurred before July 15, 2009. A DFA 842 is no longer required for any overissuance that occurred on or after July 15, 2009.
-
Note: If the data recorded on the DFA 842 can be obtained from CalSAWS for overissuances occurred prior to July 15, 2009, the DFA 842 is not required.
-
- Hand budgets (DFA 285B/CF 285 SAR) are required when:
- The overissuance calculation is not displayed in CalSAWS.
- An IHE overissuance becomes an IPV and the 20% earned income deduction must be disallowed on the unreported portion of the earnings.
- If the overissuance is entirely OR partially due to client non-reporting, a fraud referral must be done.
- An appropriate NOA must be provided to the household prior to collection of the overissuance. The NOA must include the following information:
- The amount owed,
- The type of overissuance (AE, IHE or IPV),
- The reason for the claim,
- The period of time the claim covers,
- How the claim was calculated,
- Any offsetting that was done to reduce the claim,
- How the household or its sponsor may pay the claim,
- The household’s or the sponsor’s right to a state hearing if the household or the sponsor disagrees with the amount of the claim, and
- That the household has 90 days to request a fair hearing.
An example of the minimum budgeting information required is as follows:
|
Month |
Actual Allotment Received |
Correct Allotment |
Amount of Overissuance |
Adjustment for Returned/Unused Benefits (if any) |
Amount of Claim |
|
8/04 |
500 |
300 |
200 |
50 |
150 |
|
09/04 |
500 |
300 |
200 |
200 | |
|
10/04 |
400 |
300 |
100 |
100 | |
|
Total Amount of Claim: |
$450 |
Restrictions
An overissuance claim cannot be established when:
- The three-year timeframe to establish an AE or IHE overissuance claim has expired.
- The county failed to ensure that a household:
- Signed the application forms (SAWS 1 and SAWS 2 or CF 285).
- Completed a required work registration form.
- Was certified in the correct county.
- An inaccurate budget estimate was made for a prospectively budgeted month, AND
- The client reported timely and accurately all the information available to him/her, AND
- The EW took action timely and accurately on the case based on that information.
- A SAR household reports a mandatory mid-period change:
- In a timely manner, and there isn't time for the EW to reduce benefits with a 10-day notice of action.
- In an untimely manner, but the EW would not have had time to reduce benefits with a 10-day notice of action, even if the household had reported timely.
SAR Period: July through December
On August 11, a CalWORKs/CalFresh household untimely reports that the mother was convicted of a drug felony on July 23. The County acts on the reported information and reduces the September allotment. No claim can be established for August since even if the household had report the change within 10 days, benefits for August could not have been reduced due to the 10-day notice requirement.
Multiple Causes
In the Same Month
When an overissuance is due to both AE and IHE in the same month, in most cases, it is classified as an IHE. For exceptions to this, refer to Combined AE/IHE Overissuances.
In Different Months
When an overissuance is an AE for a period of time and then changes to an IHE due to a subsequent change in circumstances, two separate claims must be established.
On 4/1/00, the client reported a decrease in rent to be effective 5/00 and provided verification. The EW failed to act on it, and on 10/5/00 the overissuance was discovered. The client also failed to report that on 8/31/00, one household member moved out.
There are two overissuance claims. There is an AE overissuance claim for 5/00 through 9/00 due to the rent decrease and an IHE overissuance for 10/00. The overissuance becomes an IHE in 10/00 because of the unreported loss of a household member. (The member's departure should have been reported on the 8/00 SAR 7 in 9/00, allowing time to discontinue the member by 9/30/00. The overissuance in 10/00 is due to both administrative and household error. Combined AE and IHE claims are classified as IHE.)
Missing Information or Verification
Policy
The household must provide any information and verification necessary to compute the correct amount of the overissuance. Follow the chart below when the household refuses or fails to provide information or verification necessary to compute an overissuance.
| IF THE HH... | AND... | THEN... |
|
REFUSES to provide information or verification needed to compute the overissuance, |
The entire benefit amount for the affected period is considered an overissuance. | |
|
FAILS (is unable) to provide VERIFICATION needed to compute the overissuance, |
The EW is unable to obtain the missing verification, |
Take a “Sworn Statement” (GEN 853) from the client as verification, and compute the overissuance based on the information stated in the affidavit. |
|
FAILS (is unable) to provide information/verification about SOMEONE WHO HAS LEFT THE HH, |
The EW is unable to obtain the missing information/verification, |
Don't compute an overissuance. Document on the Journal Detail page why the overissuance claim was dropped. |
Refusal to Provide
An adult sister moved in with a CalFresh family nine months ago and has been working for the entire nine months. The sisters purchase and prepare food together. The sister does not want to be on CalFresh, and refuses to cooperate in verifying the amount of her earnings for the past nine months.
The entire amount of CalFresh benefits issued from the date when the sister would have been added to the household, if reported timely, is an overissuance.
Failure to Provide Verification
A household member worked for six months at a local restaurant, never reported the earnings, and was paid “under the table”. The employee never received a wage stub, and the employer refuses to provide verification of the earnings.
Have the employee complete a GEN 853 listing the dates and amounts paid, and use this as earnings verification to compute the overissuance.
Information/Verification Unavailable for a Former HH Member
The father in a CalFresh household worked without reporting his earnings, and then left the home last month. The mother (who is now the head of household) doesn't know where he is, have any of his past paystubs, or know how much he earned.
Since it is not in her power to provide verification of the now-absent father's earnings, no overissuance can be computed. This must be documented on the Journal Detail page. If the father were to later return home, earnings verification needed to compute the overissuance should be requested of him at that time, and an overissuance claim completed.
Compromise Policy for Households with Elderly and Disabled Members
Senate Bill (SB) 490 requires counties to compromise AE and IHE overissuance (OI) claims for active and inactive households, including at least one elderly and/or disabled member. AE and IHE claims must be adjusted based on household composition and participation status at the time of OI discovery as follows:
100% Compromise:
- AE and IHE claims for all active and inactive households consisting solely of members who are elderly and/or disabled at the time of the discovery of the claim will be reduced by 100 percent.
- AE and IHE claims for all active and inactive households that include at least one member who is not elderly and/or disabled, but only the elderly and/or disabled household members are responsible household members at the time of the discovery of the claim.
50% Compromise:
- AE and IHE claims for all active households that include at least one member who is elderly and/or disabled and at least one member who is not elderly and/or disabled and is a responsible member of the household at the time of the discovery.
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