Excess Property Overpayment

[EAS 44-352.11]

General Principle

Unless the excess property was spent down prior to the first day of the next SAR payment period, the EW must determine an excess property overpayment based on an accurate report and/or correct county action when:

Property information that should have been reported on the SAR 7 was not reported; or
The county failed to act correctly on property information reported on the SAR 7.

Example Example The May SAR 7 received on June 3rd, reports that the client received a $2,400 tax return (no EITC was included) on May 23rd. She purchased a car worth $1,300 and bought clothing for her children with the tax return on May 26th. The property (tax refund) was converted to exempt personal property (a car worth less than $1,500 and exempt personal property) before July 1st. Therefore there is no overpayment due to excess property.

Example Example An AU received a tax return of $3,200 (no EITC included) on March 5th and failed to report on the SAR 7 due in May. Finally, the AU reports the tax return on the next SAR 7 in November and states that the entire refund remains in a saving accounts. Since the excess property was not spent down prior to the first day of the next SAR payment period, there is an overpayment in June, July, August, September, October and November due to excess property.

Overpayment Calculation

When an AU has held property in excess of eligibility limits, the overpayment must be calculated as follows:

Determine the period of time in which the recipient held property exceeding the property limits.
1. Note: The period that the AU held excess property includes ALL months in which the total property value of the same items of property exceeds limits on the first day of the month, even though there may be months in which the total property value is below limits.
Determine the month within the period in which the property value, on the first day of the month, was the highest and calculate the amount by which the property exceeded the eligibility limit.
Calculate the total amount of aid actually paid to the AU during the months excess property was held, subtracting any money, excluding child support recoupment, received by the county.
Determine whether the AU received aid in "good faith." See next section for detail.

Good Faith Determination

Prior to determining the amount of an overpayment due to excess property, the EW must make a determination of whether or not the aid was received in “good faith”. Clients shall be considered to have received aid in “good faith” when:

Within their capabilities, they met their reporting responsibilities and
The evidence indicates that they believed they were eligible to the grant received.

Note: Clients who have completed a SAWS 2 (or other statement of facts) and the SAWS 2A at application and redetermination have been properly informed of the CalWORKs reporting responsibilities. Unless there is some barrier, such as language or mental competency, which prevent understanding, it shall be considered that they “know their responsibilities”.

“Good faith” is also determined if a recipient is unaware that interest posted to a Restricted Account brings the total over $5,000 or causes the $2,000 property limit to be exceeded.

Questions to Assist in the “Good Faith” Determination

The following questions are guides to assist the EW in making the “good faith” determination:

How was the individual informed of their reporting responsibilities (e.g. mass mailing, personal intake interview, home visit, never)?
Is there information in the case record which indicates that the recipient apparently understood their reporting requirements in regards to property?
What is the recipient's history of reporting?
Did the recipient know the value of the property in question?
Did any actions taken by the EW or another county representative contribute to the situation causing the overpayment?
Is there any information about the recipient's situation which would have an influence on the determination (i.e., language or age barrier)?

Decision Process

The EW must use the following chart to assist in making a “good faith” determination:

EW:
1. Holds a conference with the EW Supervisor to evaluate the case information.
EW and Supervisor:
1. Weighs the information provided by the client and the case record and make a “good faith” determination.
EW:
1. If the client received aid in "Good Faith," the overpayment is the lesser of the amount of excess property determined in Step 2 of the Overpayment Calculation) above, or the total grant paid (determined in Step 3 of the Overpayment Calculation).
2. If the client did not receive aid in "Good Faith," the overpayment is the total grant paid during the month(s) the excess property was held.
EW:
1. Documents the determination and the basis for the decision on the Journal Detail page.

Example 1

A client has been receiving $638 each month in CalWORKs beginning in January. In April the client sold a family heirloom for $3,000. She banked the money but failed to tell the EW or report this on the SAR 7s due in June, as she wished to save for a car. In December, when the EW is completing the RD, the information regarding the bank account is disclosed. The account balance is $3,075, due to accrued interest. The client has no other property. The excess property amount is $1,075.

The client was ineligible from May through December as her property exceeded the maximum on the first of those months. The total aid paid in the ineligible months was $5,104 ($638 X 8). As the client knew the value of the property and did not report this to the EW, the EW and EW Supervisor make a determination of “no good faith”. The overpayment is $5,104.

Example 2

The client applies for CalWORKs in July. She shows the EW an old insurance policy with a face value of $900 which has been paid up for a number of years. The cash surrender value indicates that the value is $900. The client appears to have property within the eligibility limits. Aid is established in the amount of $762 per month. Since the policy is quite old, the EW sends a request to the insurance company to verify the current value of the policy. The reply does not come until October 5th. It indicates that the accumulated dividends on the paid-up policy have increased the value of the policy to $2,400 by the date of the client's application for CalWORKs.

The EW determines that the client acted in “good faith” in providing what information and knowledge she had available.

The client had excess property in July, August, September and October. The amount of the excess property is $400. The total grant paid for the period is $3,048 ($762 X 4). The overpayment is the lesser of the $3,048 or $400; therefore it is $400.

Fiscal Procedures

When an excess property overpayment occurs and the amount of the overpayment is determined to be the amount of the actual grant paid, regardless of whether in “good faith” or not in “good faith”, the overpayment month shall be claimed as federal (assuming the case is otherwise federally eligible). No claiming changes will be required.
When an overpayment occurs due to excess property and the overpayment amount is determined to be the amount of the property excess rather than the actual amount paid in the overpayment month, that month may not be claimed for federal participation.