CW Update 24-05: Overpayment Discharge (Revised)
CalWORKs Handbook
| Date | References | Clerical | Implementation |
| 05/07/24, (Revised 01/10/25) | ACL 19-102, ACL 19-102E, ACL 24-84 | N/A | Immediately |
Background
Effective July 1, 2019, the CalWORKs overpayment threshold for collection on non-fraudulent claims was increased from $35 to $250 for closed cases. Claims with a balance totaling $249 or less are placed in suspense status, and no collection efforts are made.
Changes
In addition to the higher CalWORKs overpayment threshold, Senate Bill 726 introduced a new CalWORKs discharge process for non-fraudulent overpayments under $250, possible discharge for mass overpayments resulting from major systemic error or negligence and prohibits the commencement of civil or criminal action against any individual based on alleged unlawful application for or receipt of public social services if the case record was not made available to the individual.
As of May 20, 2024, with the automation of CalSAWS functionality in all 58 counties, a non-fraudulent CalWORKs overpayment shall be deemed uncollectible and discharged if the liable individual(s) has not received aid in California under the CalWORKs program for 36 consecutive months or longer. This is applicable to all closed CalWORKs cases with non-fraudulent overpayment claims, including non-fraudulent overpayment claims related to Welfare-to-Work supportive services. This is applicable retroactively to any non-fraudulent outstanding Temporary Assistance for Needy Families (TANF) or CalWORKs overpayment claims established on or after December 1, 1996. Federal law precludes overpayment claims established prior to December 1, 1996, under the former Aid to Families with Dependent Children (AFDC) program to be discharged.
If a former client with an outstanding overpayment claim, regardless of amount, reapplies and becomes a recipient of CalWORKs within the 36-month timeframe, collection on the claim will resume by grant adjustment.
The following CalWORKs Handbook Overpayments-General sections have been revised:
• Overpayments and Referral to Collections
• Type of Overpayment
Data Systems
As of May 20th, 2024, discharge automation is available in CalSAWS.
Note: Claims are referred to as recovery accounts in CalSAWS.
Forms
The Notice of Overpayment Discharge (M44-353) has been revised to remove the use of NA 290 and add language clarifying that all liable adults on the case must be notified about the overpayment amount being discharged. Notice M44-353 must not include an NA BACK 9 as the action is not subject to a state hearing.
The following Notices of Action will be generated in CalSAWS as appropriate:
- Notice of Overpayment Discharge (M44-353)
- Suspension of Overpayment (M44-350M)
- Suspend Overpayment Recovery (M44-350N)
- Notice of Suspected Fraud (M44-350O)
- Notice of Overpayment Settlement (M44-352I)
Note: Manual notices must be generated for external claims.
Reference Material
CDSS has provided an Overpayment Discharge Flowchart, which has been added to the Eligibility Reference Material for staff under CalWORKs.
Other Programs
The changes in this Update also apply to Refugee Cash Assistance, Entrant Cash Assistance and Trafficking and Crime Victims Assistance Program.
Department of Employment & Benefits Services
Contact Person(s):Romie Cuellar, SSA BPIS, and Amy Mitchell, WOOC SSA BPIS, 408-755-7540