Recoupment of an Overpayment

[EAS 44-352.3]

Recoupment when Liable Individual (Payee) was in the Overpaid AU

Overpayment balances must be recouped from the payee (aka the liable individual) who was a member of the AU at the time of the overpayment, even if that individual moves to another AU or is no longer on aid. Continue to recover from that individual until any one of the following occurs:

The individual cannot be located.
The individual has the overpayment discharged in bankruptcy.
The county is unable to execute a legal process to collect. This occurs when the individual is no longer on aid, the overpayment is non-fraudulent and the balance is less than $250.00, and there are other members of the overpaid AU who remain on aid.
- When the overpayment claim on a closed case is $250 or more, the overpayment shall be recouped. If the overpayment on a closed case is being repaid in installments, collection efforts must cease once the balance of the outstanding overpayment falls under $250.
The liable individual dies, and the balance cannot be collected from the payee’s estate.

Once all efforts to collect from the overpaid individual are exhausted, then collection must begin from other adult members of the overpaid AU until the amount of the overpayment is fully recovered or it is no longer cost effective (less than $250.00) to collect the remainder of the overpayment.
Recoupment/collection may occur in sequence against any one member at a time or concurrently from any of the members, when in separate AUs or when not receiving aid.

Note: It is critical that EWs communicate overpayment information to the new EW when one member of the overpaid AU moves to another AU and adjustment is to continue from both AUs. If recoupment is to take place in two or more AUs the overpayment balance should be divided equally, if possible.

Procedures to Locate the Liable Individual

The EW must take the following steps to attempt to locate the overpaid individual when that individual is no longer receiving benefits in the overpaid AU:

Using the available information in CalSAWS, MEDS, and the IDM record, determine if the liable individual can be located.
1. Note: The “Child Support Questionnaire” (CW 2.1Q) may provide the necessary information if the individual is now an absent parent.
Send the current payee a letter, asking for the address of the overpaid liable individual.
Begin grant adjustment for the existing AU if the whereabouts of the liable individual are not known.
Refer the liable individual to Collections with their whereabouts, so they can begin Collection activity.
1. Reminder: Do not grant adjust this overpayment if the liable individual CAN be located.
Continue the grant adjustment until:
1. The overpayment is totally recouped.
2. The whereabouts of the overpaid liable individual become known.

Example Example An overpaid AU consists of the mother, father and two children. The mother was the payee. Due to a late SAR 7, there is a $450 overpayment. The mother has left the home and the father is continuing to receive CalWORKs for himself and the two children. Before the overpayment can be recouped from the existing AU, the EW must try to locate the mother (liable individual) using the information in the case record (i.e., the CW 2.1Q), CalSAWS, MEDS, IDM, and sending a letter to the father (liable individual). If there is information in the case file or on MEDS/CDB or if the father provides the mother’s whereabouts, the EW must refer the case to Collections indicating that Collection activity must begin for the mother. If the mother’s whereabouts are unknown, the EW must begin recouping from the existing AU.

Example Example A mother is receiving CalWORKs for herself and her child. She is the liable individual of a $300 overpayment that occurred in the case. She leaves the state and the child’s grandmother comes in to apply for CalWORKs as a non-needy caretaker. The grandmother is questioned about the child’s mother but does not know where she is. The EW is unable to find a match in either MEDS or CalSAWS. Since the mother is “unlocatable,” the overpayment cannot be recouped from the existing AU, since the OP cannot “follow” minor individuals.

Minors as Liable Individuals

CalWORKs Overpayments OPs must not be collected by any means, including, but not limited to, grant adjustment, tax intercept, administrative or civil action or voluntary repayment agreement, from adults, emancipated minor or Head of Households, who were minors in an overpaid CW AU at the time the OP was incurred.
In addition, CW OPs must not be recouped from any minor who becomes a member of a new AU, if the OP occurred while the minor was previously a member of a different AU.

Example Example A child in an overpaid AU moves to a different AU and the responsible relative in the first (overpaid) AU cannot be located, the OP must not follow the child to the new AU, and the county must not grant adjust or otherwise recoup that OP from the new AU.

The following chart contains examples of situations of OPs with minors in the AU:

If...	Then...
An 18-year old is being aided as a “child” because he or she is still in high school,	The individual cannot be held as a liable individual. Even though the individual has turned 18, because he/she is attending high school and is considered an “eligible child.”
A client formerly received extended CalWORKs benefits under AB 12,	The individual cannot be held as liable to collect on an OP when that individual reaches age 21 and is no longer a NMD. AB 12 payments, though paid through CalWORKs, are for foster youth, and former foster youth are not liable for any OP that occurred while the NMD received AB 12 payments. OPs may only be recouped via grant adjustment while a NMD is actively being aided under AB 12. However, if that former AB 12 recipient receives aid after AB 12 benefits end in a new, non-AB 12 AU, that later OP can be recouped, because in that scenario, the former NMD is the adult head of house- hold of his/her child’s AU.
A grandchild that was in a Senior Parent’s AU if the grandchild’s parent(s) (a former nested teen parent) reaches age 18, completes high school or vocational training before age 19 or becomes emancipated and starts his or her own AU,	Both the nested teen parent and the grandchild of the Senior Parent were receiving aid as children in the Senior Parent’s AU. Thus, they are not considered responsible parties for the prior AU’s OP and the OP cannot be recouped from these individuals. Once the former nested teen starts his or her own AU, the prior OP does not fol- low him/her to the new AU.
An OP occurs while the minor is living with a NNR, and the child moves back with his/her mother,	The NNR’s OP cannot be collected from the new AU where the child is receiving aid with Mom. Because the OP occurred in the NNR’s AU, the OP would not “follow” the child from the NNR’s AU to the Mom’s AU.
The AU only contains unaided adults and aided children (Child-Only cases),	OPs cannot be collected from unaided adults if the adult was not aided at the time the OP was established. This includes adults who are excluded from the AU because they are a sanctioned individual, drug or fleeing felon, undocumented non-citizen, or NNR. However, recoupment on OPs from active Child-Only cases can occur via grant adjustment. Once the case is discontinued, recoupment from the (previously) unaided adult or the child cannot occur.

Emancipated Minors and Head-of-Household Minors

Minors can only be held liable for recoupment on an OP if the OP occurred while the minor was a HoH or emancipated minor.

If...	Then...
The OP was incurred when the minor was aided as a child in AU,	Action to collect that OP from the minor cannot be taken.
The OP occurred in the minor’s own AU for which they are the HoH,	Action to collect the OP can be taken against the minor.
The OP was established in the emancipated minor’s own AU,	Action to collect the OP can be taken against the minor.
The OP was incurred before the minor became emancipated or HoH,	Action to collect that OP from the minor cannot be taken.
The AU is a two-parent HH where both parents are under 18 (i.e. there is no senior parent), and an OP is incurred within that AU,	Action to collect the OP can be taken against the AU because at least one or both of them were HoH at the time the OP occurred.

Administrative Error (AE) Overpayment Recoupment

When an overpayment is due to an AE, the grant adjustment amount is 5% of MAP (rounded down - drop the cents) for the AU.

AE’s are NOT the result of a recipient reporting too late for a timely notice, but are determined when the EW has all the necessary information and fails to take timely action.

Example Example A recipient provides their SAR 7 on the 27th of the month. This is too late for a 10-day NOA, therefore, any resulting overpayment is considered a CE overpayment, not an AE overpayment.

Client Error (CE) Overpayment Recoupment

When the overpayment is not an administrative error, the grant adjustment amount is 10% of MAP (round down - drop the cents) for the AU.

Refer to Determination of IPV for an IPV overpayment recoupment.

Note: An overpayment adjustment at the 10% rate takes precedence over an adjustment at the 5% rate.

Grant of Less Than $10.00

An overpayment must be adjusted if the grant is less than $10.00 and there is an outstanding overpayment balance. The recipient does not receive cash grant due to the regulations. However, the recipient is eligible for CalWORKs and the EW must adjust any balance on an existing overpayment.

Example Example A recipient is employed and is eligible for $7.00 in June. The cash grant for $7.00 will not be issued, however she is eligible for that amount. She has an outstanding overpayment balance of $54.00. The CalSAWS will recoup the $7.00 from the June’s grant and her overpayment balance will then be reduced by the $7.00.

Multiple Overpayment Balances

When a case contains multiple overpayment balances, CalSAWS processes the amount of adjustment in the following order:

First adjust an IPV, then CE, then Technical, and finally Administrative Error (AE); secondly, adjust the overpayment within each category with the largest balance first.
When the balance on one overpayment is less than the maximum adjustment amount allowed, insure that the total recouped within a given amount equals the maximum allowable adjustment. For example, if the maximum recoupment is $50 and there is a balance owing of $10 on one overpayment and $85 on another, $10 on the first overpayment and $40 on the second overpayment are adjusted.

Pro-Rated Overpayment Adjustment

If the Maximum Aid Payment (MAP) has been prorated, as in the beginning month of aid, the EW must use the prorated MAP amount when determining the amount of the overpayment adjustment in the beginning month of aid. This occurs when:

The case had been previously discontinued and the applicant is now reapplying for CalWORKs, and
The applicant has been previously notified of the overpayment.

Recoupment Concerns

Overpayments must be adjusted by either 5% or 10% of MAP for the AU, based upon the type of overpayment.

Whenever an overpayment is calculated, the client must be sent a Notice of Action even though aid may be discontinued and the grant cannot be currently adjusted.

Note: The overpayment recoupment amounts are in the Chart Book. No other computation is required to determine the amount of the recoupment.