Type of Overpayment

The EW must determine whether the overpayment is Administrative Error (AE), Client Error (CE), or “Technical”. Once this determination is made, the EW must take the necessary steps to determine the amount of the overpayment and make any required overpayment adjustment to the ongoing grant. Refer to Overpayment Definitions for the definition of overpayment types.

Overpayments Due to the Inability to Provide Ten-Day Notice of Adverse Action

Effective January 1, 2017, the establishment of an overpayment is prohibited for the month following a report of income over the Income Reporting Threshold (IRT) for a SAR AU, or a report of income over IRT or household composition for a AR/CO AU, if the change is reported timely and the EW is unable to provide a 10-day notice of the adverse action before the first of the month following the change.

Example Example A SAR recipient in an AU of three timely reports income over the IRT, on January 24, that is expected to continue. On the day of the report, the EW sends a 10-day notice regarding the termination of CalWORKs effective the last day of February. The EW did not have sufficient time to issue the 10-day NOA and benefits will be discontinued at the end of February based on January’s changes.

Example Example On February 21, the timed out adult in an AR/CO case reports timely on behalf of a child only AU of two that one of the children has moved in with the other parent. The next day the EW mails the 10-day notice regarding the reduction in CalWORKs for April 1. Although the decrease in cash does not affect the March grant due to insufficient time to issue the 10-day notice, the EW shall notify the client of the pending change to take place in April based on February’s changes in household composition.

The following example illustrates the consequence when a client fails to report a change in income over IRT within the mandated 10-day period.

Example Example A client reports on March 22 that starting February 7, their income went over IRT and is expected to continue. Since the client failed to meet the 10-day reporting requirement, an overpayment will be assessed for March. Further, if the EW is unable to give timely notice to reduce the cash, aid received in April will also be an OP.

Note: This change applies only when there is a change in income over the IRT for a SAR AU or a change in income over the IRT or household composition for a AR/CO AU and does not change the penalty process for when an AU fails to report IRT or household composition changes timely.

Semi-Annual Reporting AUs

An overpayment must be claimed when the AU receives more cash aid than the AU was entitled to receive because the county was unable to provide a valid 10-day notice of an adverse action following the receipt of a mandatory recipient report, including reports on the SAR 7, the SAWS 2 Plus, or mandatory mid-period reports of income over IRT.

If...	Then...
The SAR 7 is received timely (by the 11th of the Submit Month) but was not processed or was processed incorrectly by the county,	Obtain a signed 10-day NOA waiver from the client, or An “Administrative” Overpayment must be established if the assistance unit will receive more benefits than to which it was entitled for the SAR payment period.
The SAR 7 is submitted late (after the 11th of the Submit Month), but before the NOA cut-off; however was not processed by the county until after the NOA cut-off,	Obtain a signed 10-day NOA waiver from the client, or An AE Overpayment must be established if the assistance unit will receive more benefits than to which it was entitled for the SAR payment period.
The SAR 7 is submitted after the NOA Cut-Off, but by the Extended Filing Date,	Obtain a signed 10-day NOA waiver from the client, or A CE overpayment MUST be established if the assistance unit will receive more benefits than to which it was entitled for the SAR payment period.

For more information regarding SAR 7 processing, refer to SAR 7 Requirement.

AR/CO Reporting AUs

An overpayment must be claimed when the AU receives more cash aid than the AU was entitled to receive because the county was unable to provide a valid 10-day notice of an adverse action following the receipt of a mandatory recipient report, including reports on the SAWS 2 Plus, or mandatory mid-period reports of income over IRT.

An overpayment must not be claimed for the month following a change in income over the IRT or household composition for an AU that does not include an eligible adult for the first through fifth months of a current semi-annual reporting period if the recipient has reported the change and the county was unable, before the first of the month following the change, to provide a 10-day notice of the termination or reduction of benefits.

Fraud Determination

When the DA notifies the IEVS Unit of a fraud determination, the IEVS worker completes the penalty process in CalSAWS and sends the notice of action to the AU. The EW will be notified that the overpayment is due to “fraud” and the previous determination has been changed to a Fraudulent or Intentional Program Violation (IPV) overpayment.

Administrative Hearing Rulings (Appeals Decisions)

In administrative error overpayments the Administrative Law Judge (ALJ) may take into consideration fairness or equity issues (the legal term is "equitable estoppel"). This means that the ALJ may consider possible harm done to the claimant because they were prevented from:

Applying for an aid program for which they might have been entitled (i.e. General Assistance, RCA, etc.), or
Receiving the correct amount of CalFresh because their CalWORKs grant was too high.

In such cases, the ALJ may order the county to recompute the Food Stamp budget, using the correct grant amount to determine the amount of injury. This number is then used to reduce the CalWORKs overpayment.

Appeals Workers will provide instructions to the EW should this occur and will be available to provide additional information, if required.

COVID-19 Pandemic Emergency Period

EAS 44-350

The following rules apply to claims established during the COVID-19 pandemic period:

Overpayments established on or after August 1, 2021, for the benefit months of April 2020 through June 30, 2022, shall be classified as administrative error (AE).
The classification of overpayment claims that include any months during the COVID 19 pandemic emergency period beginning April 2020 through June 2022 as AE.
Overpayment claims classified as AE shall not be reclassified after the state of emergency related to the COVID-19 pandemic ends, but shall remain an AE, except when the overpayment claim has been determined to be an intentional program violation (IPV).

Example Example An overpayment claim was established in October 2021 for the overpaid months of November 2019 through April 2020. This entire claim should be classified as AE because it includes the pandemic month of April 2020.

Example Example An overpayment claim was established in December 2022 for the overpaid months of January 2022 through June 2022, during the public health emergency. This claim should be classified as AE because the claim includes months occurring within the pandemic timeline of April 2020 through June 2022.

Example Example An overpayment claim was established in February 2023 for the overpaid months of July 2022 through January 2023. This claim could be established as either client error or AE because the overpaid months are outside the April 2020 through June 2022 pandemic timeline.

Example Example An overpayment claim was established in July 2021 for the overpaid months of January 2021 through June 2021. The claim was classified as AE since it included the months within the pandemic timeline. In June 2022, an IPV related to the aid received during the overpayment period was substantiated through a criminal court. The claim which was originally classified as AE must be reclassified to IPV.

Senate Bill 726 includes provisions for the discharging of CalWORKs overpayments resulting from negligence and major systemic errors. "Mass overpayments" is defined as an overpayment caused by the same action or inaction that impacts either eight percent of the county caseload, or more than 1,000 CalWORKs AUs within the county, whichever is greater.

Major Systemic Error & Negligence Overpayments

Effective July 1, 2019, counties shall promptly notify the California Department of Social Services (CDSS) Early Engagement and Eligibility Bureau when a mass overpayment has been identified, and include in the notification as to whether the mass overpayment is known to have been caused by either of the following:

Negligence on part of the county in the determination of eligibility for CalWORKs AUs; or
A major systemic error by the state or county.

Once verified and approved by CDSS, the county must discharge the overpayment, and refund any collections made when deemed appropriate.