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Underpayments/Supplements - Special Considerations
[EAS 44-340]
Mandatory Inclusion
An underpayment may only be issued for months in which all technical conditions of eligibility are met. These are considered to have been met as of the date the mandatory person entered the AU, provided:
- The person is cooperating in meeting these conditions, and
- The caretaker relative fulfilled their reporting responsibilities in making a timely and accurate report of the change in AU composition.
Basically, this means that if the fact that an additional person entered the home was not reported in a timely manner, no underpayment exists.
Grant Adjustment Due to SAR 7
If information reported on the SAR 7 results in an increase of cash aid, and the EW cannot increase the grant by the first day of the month of the next SAR payment period, a supplement must be issued for that month. The cash grant for the remaining months of that SAR period is increased.
Voluntary Mid-Period Reporting
A mid-period supplemental payment resulting from a voluntary mid-period report, which was correctly computed based on a recalculation of reasonably anticipated income and or other changed AU circumstances, must not be considered an underpayment and cannot be used to offset an overpayment.
Supplemental Payments
A supplemental payment which was correctly computed, based on the reasonably anticipated income, must not be considered as an overpayment provided that the recipient’s report was complete and accurate. If there is a computational error, the supplemental payment must be corrected. Supplemental payments are not issued retroactively, based on actual income, when a client fails to make a voluntary report of a decrease in income. Although supplements can not be issued retroactively, the benefit to the client is that an OP will not be assessed for that month in which a decrease to the income occurred.
Examples of Underpayments and/or Supplemental Payments
Below are examples of when an underpayment and/or supplemental payment may occur:
An AU is comprised of Mom, Dad, and three children. The AU is on a July through December SAR payment period. Mom is not working, and Dad is working full-time. The AU has no other income besides Dad’s income. On August 4th, Mom reported that Dad moved out of the home on August 1st. Mom was informed that removing Dad from the case would increase her cash aid because his income will no longer be counted. Mom requested to remove Dad from the case and have her benefits re-evaluated. In this situation, a supplemental payment for the month of August would be issued, and the AU’s cash aid would increase for the remainder of the SAR payment period.
A CalWORKs recipient reported and provided pregnancy verification on April 10th. In this situation, there is no need to wait until the first day of the following month to increase cash aid if the recipient is determined to be eligible for the PSN. A supplemental payment of $100 must be issued for the month of April and the remaining months in the payment period or until the birth of the child has been reported and the newborn is added to the AU, whichever occurs first.
An AU comprised of Mom, Dad, and one child, reapplied for CalWORKs on July 15th. Mom is working part-time, and Dad is unemployed. The application was denied because the AU was over the MBSAC. In August, Mom contacted the EW and requested her case be re-evaluated. The EW determined the case was erroneously denied because the EW counted Dad’s income that was previously entered into the system. The EW also discovered the AU has an outstanding overpayment. In this scenario, July would be an underpayment. Since the AU has an outstanding overpayment, the EW would offset the underpayment for July against the prior overpayment and issue the remaining amount to the AU if applicable. A supplemental payment would be issued for August and cash aid issued for the remaining months of the SAR payment period.
The AU is comprised of a non-needy grandmother and one grandchild. The AU’s AR/CO payment period is February through January. The AU reported timely on the AR 3 that another grandchild moved into the home as of April 10th and provided the required verification to the EW. The EW did not process the paperwork to add the child until June 10th. In this situation, an underpayment will be issued for the month of May, and a supplemental payment will be issued for the month of June and cash aid increased for the remaining months of the AR/CO payment period. If the AU has an outstanding overpayment, then the EW would offset the May underpayment against the prior overpayment and issue the remaining amount to the AU if applicable.
Erroneous Denial
Underpayments which occur due to the erroneous denial of an application must be corrected even though the client met the technical conditions of eligibility at a later date, when the delay was caused by the denial.
Reminder: Technical conditions of eligibility include applying for a Social Security number, applying for unconditionally available income such as UIB, and providing the absent parent information.
A single pregnant woman applied for CalWORKs for the first time on January 10th. She has no other children in the home, and she was not eligible for immediate need. She provided pregnancy verification with an estimated due date of confinement that shows she is in her second trimester of pregnancy.
During her intake interview, she reported that she is attending college and working part-time through her school’s work study program. The EW entered the income as earned income instead of exempt income, which resulted in the denial of cash aid due to being over the MBSAC. On February 4th, the EW reviewed the case and realized the income was incorrectly budgeted and rescinded the denial. The EW corrected the error and issued an underpayment for January. The EW also issued a supplemental payment for February and issued cash aid for the remainder of the payment period.
A client applies for CalWORKs on January 10th and believes his car is valued at $12,000. The application is denied on January 25th. On February 1st, the client returns with estimates from car dealers, which indicate the car is worth $10,000. Even though the client failed to apply for UIB, aid shall be authorized effective January 10th, the date of the erroneous denial, if such failure was caused by the erroneous denial. The beginning date of aid for an erroneous denial is determined following the general beginning date of aid rules.
Related Topics
Underpayments/Supplements - General