CWES Overpayment & Underpayment Deferral Rules

Deferral Rules

A deferral means to temporarily postpone recovery/collection of an overpayment. The recovery/collection deferral provisions apply ONLY to clients, and DO NOT apply to providers. A referral to Collections is deferred when:

• The client is currently receiving CalWORKs and is participating in a WTW activity, including time between activities.
• The client is no longer receiving CalWORKs but is working during the (12-month) post-aid period, including the 60-day job search.
• A referral would result in the disruption of child care arrangements,
• A referral would preclude participation in a WTW activity,
• A referral would prevent the client’s ability to obtain or retain employment, or
• The overpayment is being recouped (e.g., grant adjustment, offsetting, etc.)

Note: Fraud Overpayments are also subject to deferral determination.

Although an overpayment has been processed in CalSAWS, if deferral provisions apply, select the [Suspend] button on the Recovery Account Detail page in CalSAWS until the deferral period ends.

If recovery/collection of any overpayment is deferred, the EC must follow these procedures:

• Document the deferral reason in the Journal Detail page in CalSAWS.
• Reevaluate the need for deferring repayment/collection when necessary (e.g., case closed).
• Notify the client of the deferral by sending the “Notice of Temporary Postponement in the Recovery/Collection of Supportive Services Overpayment” (SCD 1853).

End of Deferral - Reevaluation

An overpayment deferral ends in the following situations:

• The client becomes exempt from participating in a WTW activity.
• The client is an Excused 2nd Parent.
• The client becomes sanctioned from a WTW activity.
• The WTW program is denied/closed/deregistered and the client is not participating in post-aid services.

When the overpayment deferral ends and the WTW program status is closed, denied, or deregistered, the EC must update the Recovery Account Detail page by clicking the [Activate] button, which will change the Status and Status Reason to Active. This will ensure the recovery account gets auto-submitted to the Department of Tax and Collections (DTAC). 

If the WTW program is still active or in approved status and a referral to Collections is needed, ensure the selections of Active from the Status and Active from the Status Reason drop-lists on the Recovery Account Detail page.