CWES Overpayment & Underpayment - Underpayments

Underpayments usually occur as a result of a retroactive court order, delayed implementation of regulations, correction of a misinterpretation of regulations, or correction of mathematical computation error. This ONLY involves prior months from the date of discovery. All underpayments must be identified, computed and issued within 30 calendar days from the date of discovery.

Failure to apply for or to request supportive services does not create an underpayment. A change in the current supportive services payment due to a correction of the prior computation is not an underpayment but a supplement to the initial payment issued in and for the current month.

Underpayment Rules

The following rules apply to all underpayments:

• On the date of discovery, an underpayment must be corrected by paying the amount owed based on the regulations that were in effect when the benefits were issued.
• The EC must take all reasonable steps necessary to promptly correct and issue any underpayments.
• When there is a reason to suspect that an underpayment may have occurred, the EC must determine whether an underpayment did occur.
• There is no minimum underpayment correction. For example, a $2 underpayment check would be issued, as long as the individual is entitled to receive it.

Calculation of Underpayments

To calculate the correct payment for each month in question, compare the correct payment to the amount actually paid to the individual for each month; and if the amount paid is less than the correct payment for that month, an underpayment exists.

Correction of Underpayment

Underpayments are corrected through retroactive payments. Underpayments that involve more than one month may be combined for each type of supportive services. Issuance of retroactive payments must be done separately for each type of supportive services.

Example Example The EC discovered that a child care underpayment occurred from April 2001 through June 2001 in the amount of $150 (50 x 3). Also, there is a transportation underpayment for $20 (May= $10 and June= $10). 

Processing Underpayments

When it is discovered that an underpayment may have occurred, the EC must follow these steps to correct the underpayment:

• Review the approval NOA(s) against the documentation in the client case or in Imaging.
• Compare the above information with the payment history in CalSAWS for each month to ensure that an over- payment is not created.
• Issue a warrant for the amount of the underpayment, unless the underpayment can be used to balance an overpayment.
• Document all actions taken in the Journal Entry Detail page in CalSAWS.
• Notify the individual about the underpayment by sending a Welfare-to-Work Overpayment/Underpayment Notice (WTW 11).
• Forwards the WTW 11 to Imaging.