63-287    Overissuances and Underissuances

 

Table of Contents

 

 

Section

Establishment of CalFresh Overissuances under SAR

287.1

Failure to Report Income

287.2

Examples: Failure to Report Income

287.3

Late or Incomplete SAR 7

287.4

Aid paid Pending

287.5

County Error

287.6

Voluntary Reports

287.7

Discrepancy After Income Has Been Reasonably Anticipated Based on Available Information

287.8

Budget Re-computation to Determine an Overissuance

287.9

Claim Recoupment by Allotment Reduction

287.10

Underissuances

287.11

x

 

63-287.1
Establishment of CalFresh Overissuances under SAR

Regulations governing the establishment of a CalFresh overissuance under Semi-Annual Reporting (SAR) regulations will vary depending on the eligibility factor in question, when the household is required to report, and required worker action.

An overissuance will be established as applicable based on:

·         The household’s failure to report accurately, completely or timely; and/or

·         County error.

When assessing whether an overissuance should be established based on the mandatory reporting of mid-period changes, the worker must determine if the household reported the change in a timely manner (i.e., within 10 days).

If a household makes a mandatory report of a mid-period change timely (within 10 days), the worker will not establish an overissuance if the correct allotment cannot be issued due to timely notice requirements.

·         An overissuance will not be assessed based on a timely, accurate and complete report where timely (10-day) notice alone delayed issuance of the correct allotment.

·         An overissuance will be assessed when late reporting alone or together with timely notice requirement delayed issuance of the correct allotment.

Refer to 63-287.2 Examples 2 and 3 and 63-451.

NOTE: Due to CalWORKs and CalFresh having different mid-period reporting requirements, there will be times when failure to report something (such as income over the CalWORKs IRT) will result in an overpayment in CalWORKs but will not result in an overissuance in CalFresh. This is the case even though CalFresh would have taken mid-period action to decrease the allotment amount based on a mandated CalWORKs report had it been made timely.  Refer to 63-283.8.

 

63-287.2
Failure to Report Income

The determination of an overissuance based on household failure to report accurately and/or timely will be determined based on mandatory household reporting requirements under SAR regulations.  Households will make mandatory reports of income:

·         On the SAR 7,

·         During recertification, and

·         When income is over the IRT.

If a household fails to report income that it is required to report, or if the worker fails to take action on a mandatory household report, the worker will re-determine the benefits the household would have received based on an accurate report and correct County action.

·         If the recalculation results in an overissuance, the date that the overissuance begins is the first date that the change would have been made had timely and correct action been taken based on a timely and accurate household report.

·         If a recipient receives income which is under the IRT that they did not reasonably anticipate at the time of their last mandatory report, this is NOT considered a failure to report and no overissuance will be assessed.

Example 1:

Scenario

A client works through a temporary employment agency and reports on his SAR 7 that his job ended in the Data Month and provides verification.  

Additionally, the client reports that he is on-call, but that he can’t anticipate whether or not he will get another job or make any money in the next six months.

Outcome

Based on the information provided by the client, the worker agrees that he can’t reasonably anticipate any income.

Therefore, issues a supplement for the Submit Month and budgets no income for the remaining months of the certification period.

The worker later learns that the temporary agency found him a new job that started in the Submit Month. Unless he failed to report income over IRT or the worker has evidence that the temporary agency had confirmed the job offer with him in the Data Month, including start date and amount of income, there would be no overissuance.

 

·         If a household reports an income increase that exceeds the IRT, which results in ineligibility, but it is too late to provide timely notice to discontinue the case, the worker will issue benefits for the next month at the previous (higher) level, discontinue the case with timely notice and determine whether a household incurs an overissuance as follows:

o   An overissuance will not be assessed if the household reported income over the IRT timely (within 10 days of the occurrence).

o   An overissuance will be assessed if the household did not report the income over the IRT timely.

o   For Public Assistance CalFresh (PACF) households, there is no overissuance if the household fails to report income over the first or second CalWORKs IRT.

Example 2:

Scenario

A CalWORKs/PACF household assigned to the January through June semi-annual period reports timely (within 10 days) on March 28th that they are receiving income over the IRT.

Outcome

After ensuring that the income will continue at the same level, the worker determines that the recipient is financially ineligible for both CalWORKs and CalFresh and should be discontinued.  Although the household reported the income increase timely, it was received too late in the month to be able to discontinue the case effective March 31st.

The worker will issue timely notice to discontinue the case effective April 30th.

·      The cash grant for April is an overpayment.

·      The CalFresh allotment for April is not an overissuance because the household reported the change timely.

·      Transitional CalFresh (TCF) benefits would begin on May 1st.

NOTE:  If the Assistance Unit (AU) waives the 10-day timely notice for CalWORKs, the CalWORKs case will be discontinued March 31st and TCF would begin April 1st.

 

Example 3:

Scenario

Same as above, but the income increase, which is over the CalWORKs IRT, only results in a decrease to the CalWORKs grant and does not render the household ineligible for either CalWORKs or CalFresh.

Outcome

The worker issues timely notice to decrease CalWORKs and CalFresh benefits effective April 30th.

·      An overpayment will be assessed in April for CalWORKs for the amount of the grant that was released at the higher amount.

·      The CalFresh allotment for April is not an overissuance because the household reported the change timely.

.

 

63-287.3
Examples: Failure to Report Income

Example 1:

Scenario

In the semi-annual period designated as July through December, the worker determines through an IEVS match (on October 15th) that a household member had earnings that exceeded their CalWORKs IRT beginning January 5th (the previous semi-annual period).  However, the income is not over the CalFresh IRT.

The person is still working and earning the same amount, but never reported the income mid-period or on their May SAR 7.

Outcome

The worker determines that the household should have reported this change for CalWORKs on January 15th, and their cash grant should have been decreased effective February 1st.  The worker will:

Step

Action

1

Re-compute the CalWORKs and CalFresh budgets counting the unreported earnings beginning:

·      February for CalWORKs

·      July for CalFresh

2

Send timely and adequate notice to decrease CalWORKs and CalFresh benefits effective November 1st.

3

Establish a:

·      CalWORKs overpayment from February through October, and

·      CalFresh overissuance from July through October

For the amount of benefits they were not entitled to receive.

NOTE: The only mandatory mid-period report of income for CalFresh is income the CalFresh IRT (63-283.3).

Therefore, as long as the income did not exceed the CalFresh IRT, an overissuance would only be established for July through October, because the household was not required to report the income change until their next reporting period on the May SAR 7.

 

Example 2:

Scenario

The CalFresh certification period is January through December.  Reviewing an IEVS report on October 15th, the worker determines that a household member had income that exceeded their CalFresh IRT beginning on January 5th.

The household member is still working and earning the same amount, but did not report the income mid-period or on their June SAR 7.

Outcome

The worker determines that the household should have reported this change on January 15th and the CalFresh case should have been discontinued effective February 1st.

An overissuance will be established from February through October because the household was required to report income over IRT no later than January 15th.  The worker will discontinue the case effective November 1st with timely notice.

.

 

63-287.4
Late or Incomplete    SAR 7

A. LATE OR INCOMPLETE SAR 7

An overissuance will be assessed when a household submits a late or incomplete SAR 7 and the worker is unable to decrease benefits or discontinue the case due to timely notice requirements.  Refer to 63-274.5.

Example 1:

Scenario

The CalFresh certification period is January through December.  The household submits the SAR 7 on June 25th.  A household member reports starting a new job in May and received the first pay check the last day of May.  She will be paid $800 per month. 

Outcome

The worker is unable to reduce benefits effective July 1st due timely notice requirements.  Therefore,

·      July benefits will be issued at June’s level.

·      The new earnings will be budgeted for August and benefits will be decreased effective August 1st with timely notice.

·      An Inadvertent Household Error (IHE) overissuance will be established for the amount the household was not entitled to receive in July.

B. UNVERIFIED CHANGE REPORTED MID-PERIOD

If the household voluntarily reported an unverified change mid-period and that change is not included on the SAR 7, the worker will call the client to attempt to resolve the discrepancy.

·         If the worker cannot resolve the discrepancy, the SAR 7 will be considered incomplete.

·         If the discrepancy is resolved late in the Submit Month and the worker does not have timely notice to decrease benefits, the worker will release the benefits at the prior (higher) level and an IHE overissuance will be established for the amount the household was not entitled to receive.

Example 2:

Scenario

The certification period is January through December. 

The household submits a timely SAR 7 on June 7.  However, the client did not report a new job that was voluntarily reported mid-period for which verification was not provided.

Outcome

The worker calls the household to clarify the discrepancy.  The client states that they still have the job.  The worker sends suspense notice NA 960Y SAR requesting income verification.

The household submits the complete SAR 7 late on June 28th.

After re-determining benefits based on information reported on the SAR 7, the worker determines that the July through December benefits should be reduced due to the new income.  The SAR 7 was submitted too late in the month for the worker to provide (10-day) timely notice to decrease benefits for July. The worker will:

·      Provide timely notice to decrease benefits effective August 1st,

·      Issue July’s benefits at the June level, and adjusts benefits to the correct amount for August through December, and

·      Calculates an IHE overissuance for the amount the household was not eligible to receive in the month of July.

C. GOOD CAUSE

SAR households that have been discontinued for failing to submit a timely or a complete SAR 7 must be evaluated for good cause when the household submits a complete SAR 7 or reapplies in the calendar month following the discontinuance.

Once good cause has been determined and the discontinuance rescinded, benefits must be released to the household at the previous level until timely notice can be sent to decrease benefits.

An overissuance will be established when benefits are released at a previous higher level as a result of the worker's inability to decrease benefits without timely notice. 

Refer to 63-274.6 and 7.

 

63-287.5
Aid Paid Pending

Each individual or household has the right to request a fair hearing to appeal a denial, reduction, or termination of benefits.  An IHE overissuance will be established if the household received more benefits than it was entitled to receive pending a state hearing decision because the household requested a continuation of benefits (Aid Paid Pending (APP)) based on the mistaken belief that it was entitled to such benefit.  Refer to 63-451.9.

 

When APP is granted for a CalWORKs case, the PACF allotment will be determined by using the actual CalWORKs grant paid to the household, which will be the higher APP level.  Since this would result in a decrease of CalFresh benefits, the worker must give the household timely notice prior to decreasing their benefits.

If there is no timely notice, CalFresh benefits will not be reduced until the month for which timely notice can be provided.

The APP amount can be included in the computation of the CalFresh allotment because the APP is “Known-to-County” information and can be reasonably anticipated.  However, once the APP stops, the CalFresh benefits will be recalculated mid-period.

Example 2:

Scenario

An AU/household is in the January through June SAR Payment Period. 

On February 15th, the worker reduces the CalWORKs grant effective March 1st, resulting in an increase in CalFresh.

The recipient files a timely request for a fair hearing and begins receiving APP on April 25th. 

Outcome

The CalFresh allotment cannot be reduced for May because there is timely notice.

The CalWORKs grant that includes the APP will be used in the computation of the CalFresh allotment beginning in June, after giving the AU/household timely notice to decrease CalFresh.

.

 

63-287.6
County Error

Overissuances related to county error will be determined based on the worker failing to act correctly on a mandatory household report.

·         If the worker fails to act correctly on a mandatory recipient report, the worker will re-determine the benefits the household would have received based on an accurate report and correct County action.

·         If the worker’s recalculation results in an overissuance, the date that the overissuance begins is the first month that the change would have been made had timely and correct action been taken based on a timely household report.

Example:

Scenario

A household reports on the SAR 7 submitted on June 5th (for the January through December certification period) that the father started a job on February 10th.

The income did not exceed the IRT and it is expected to continue at the same level for the remaining months of the certification period.

Outcome

The worker processing the SAR 7 fails to budget the new income effective July 1st.

A supervisor discovers the error October 5th during a case review.

An Administrative Error (AE) overissuance will be established from July to October and benefits will be decreased effective November 1st with timely notice.

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63-287.7
Voluntary Reports

Changes that are not required to be reported, but that may be voluntarily reported, should not be considered when determining an overissuance.

Unverified voluntary mid-period changes must be reported on the SAR 7 or recertification that follows the change.  Refer to 63-287.5(B).

Verified mid-period reports are considered part of the case record and will be entered into CalWIN at the time they were verified.  The household is not required to report a verified change again on the SAR 7 or recertification.  Failure to act on a reported change that was verified mid-period would be considered a County error.

A CalFresh household is not required to report a new household member mid-period unless the new household member’s income together with the ongoing household’s income is over the IRT.

 

63-287.8
Changes After Income Has Been Reasonably Anticipated Based on Available Information
 

The worker will not assess an overissuance when the actual income received during the certification period differs from the amount of income that was reasonably anticipated at initial application or when processing the SAR 7 or recertification, as long as the household has reported accurately and timely to the best of its ability and the worker has acted correctly on all available information to reasonably anticipate income and household circumstances.

In other words, no reconciling based on actual income is ever done so long as the requirement to report completely and accurately is met and the worker determined and issued the benefits correctly based on reasonably anticipated income.

For example, if a worker receives an IEVS match that shows a discrepancy between the actual and reported earnings, the worker will determine if the household was mandated to report that income mid-period.  An overissuance would only be assessed if the income was over the IRT and the household failed to make the mandatory report of income over the IRT within 10 days of receipt.  A mid-period income discrepancy would not result in an overissuance unless the household has failed to meet their mandatory reporting requirements under SAR rules.

Refer to 63-282.6 for additional information.

NOTE: Due to CalWORKs and CalFresh having different IRT reporting requirements, there will be times when failure to report income over the IRT will result in an overpayment for CalWORKs, but will not result in an overissuance for CalFresh.  This is the case even though CalFresh would have taken mid-period action to decrease the allotment amount based on the report of income over the CalWORKs IRT when reported mid-period.

 

63-287.9
Budget Re-computation to Determine an Overissuance

When re-computing benefits to determine an overissuance, the worker will recreate case circumstances to determine what income should have been reasonably anticipated at the time the change shall have been reported using the correct processing timeframes.

The worker will not use actual verified income (actual income determined after the fact) to reconcile against prospectively budgeted income that was used in the original allotment calculation.

 

63-287.10
Claim Recoupment by Allotment Reduction

Recoupment by allotment reduction will be initiated only at the beginning of a semi-annual period, the beginning of a certification period or the month after the SAR 7 Submit Month, unless the recoupment does not result in a decrease in benefits.  An allotment reduction to recover an overissuance is not a “County-Initiated” change.  However:

·         A recoupment can be discontinued mid-period as appropriate when the overissuance has been recouped.

·         When a recoupment of one overissuance is completed mid-period, CalWIN may begin recoupment of the next overissuance mid-period as long as the amount that is going to be recouped does not result in a decrease of benefits.

Example 1:

Scenario

A household has two AE claims.

In the January through June semi-annual period, the worker is recouping from one of the AE overissuances via allotment reduction at the rate of five percent.

Outcome

When the overissuance is fully recouped in February, the worker will begin recoupment of the second AE overissuance in March at the same five percent rate.

The allotment reduction mid-period is allowed in this situation because benefits did not decrease mid-period.

 

Example 2:

Scenario

Same scenario as above, except that one of the overissuances is IHE.

Outcome

When the AE overissuance is fully recouped, in February the worker cannot start collecting in March from the second overissuance that was due to client error. 

Since collection for the second overissuance would be at the ten percent collection rate, the worker may not initiate mid-period collection of the second overissuance, because this would result in a mid-period decrease in benefits.

 

Example 3:

Scenario

Same scenario as Example 2, except the worker is recouping from the IHE overissuance at the rate of ten percent.

The IHE overissuance is fully recouped in February.

Outcome

The worker can start collecting from the AE overissuance in March at the five percent rate.

The recoupment of the second overissuance is allowed mid-period in this situation, because it would result in an increase of benefits.

.

 

63-287.11
Underissuances

When a household receives fewer benefits than it was entitled to receive, they are considered to have lost benefits, which the worker is required to provide (restore) to the household (an underissuance).

If the worker determines that an underissuance has occurred due to an administrative error, and the recipient is entitled to restoration of those benefits, the worker must immediately take action to restore the benefits that were lost.

·         Restoration of benefits under these circumstances would be based on SAR rules. 

·         The worker will not use actual verified income to reconcile against prospectively budgeted income that was used in the original allotment calculation.  The worker can only use income that could have been “reasonably anticipated” at the time benefits were initially calculated.

Refer to 63-456.