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RCA OVERPAYMENTS AND UNDERPAYMENTS

ISSUE DATE: 01/2017

UNDERPAYMENTS

Correct any underpayment discovered for a current benefit month within 7 calendar days following the discovery. Issue corrective payments for the current month without deducting any overpayments.

Apply restored benefits for a past month to existing RCA claims/overpayments and issue any remaining benefits to the current participant.

DO NOT establish an underpayment for prospectively budgeted units for any month for which you based the assistance issued on the best information available at the time, you applied correctly policy, and there was no client error.


OVERPAYMENTS


When you find a payment was incorrect, reconstruct each budget month and corresponding payment month using the policies and procedures that were in effect for the payment month. The overpayment is the difference between the benefit amount the client actually received and the benefit amount the client should have received. Calculate the overpayment using the Computation of RCA Overpayment Worksheet (DHS-2776D) (PDF).

DO NOT establish an overpayment for prospectively budgeted units for any month for which you based the assistance issued on the best information available at the time, you applied correct policy, and there was no client error.

There are 3 types of overpayments: client error overpayments, agency error overpayments and fraud overpayments. See 0025.12 (Types of Overpayments) to determine which type of overpayment applies.


CLIENT ERROR OVERPAYMENTS


Pursue recovery of client error overpayments.

For purposes of allowing the earned income disregard in overpayment calculation, a report is timely when the client or authorized representative reports income within 2 calendar months following the end of the month in which the income was received.


AGENCY ERROR OVERPAYMENTS


Use Collectible/Non-Collectible Agency Error Overpayment Worksheet (DHS-2776E) (PDF) to determine whether an agency error overpayment is collectible.

Pursue recovery of agency error overpayments when the sum of the overpayments exceeds the sum of the corrected benefit amount that a participant was eligible for during a claim period. The claim period includes all consecutive months in which overpayments occurred.

Do not pursue recovery of non-collectible agency error overpayments.


FRAUD OVERPAYMENTS


Consider cases suspected of fraud to be client error overpayments until the court or an Administrative Disqualification Hearing (ADH) makes a determination of fraud. Consider an overpayment in any month in which a client files a false report timely and this results in an overpayment to be a client error overpayment. This applies even if there is an agency error in the same month, unless the agency caused the client's failure to report. See 0025.24 (Fraudulently Obtaining Public Assistance).


RCA CLAIMS


Establish a claim for all claim types and amounts.

Recoupment of RCA claims is not automated at this time. Pursue recovery via voluntary repayment or civil recovery. Follow MFIP policy in 0025.21.06 (Civil Recovery).

RCA claims are subject to compromise. See 0025.12.03.09 (Claim Compromise & Termination).

In the PPP administered program, the PPP RCA eligibility workers determine the amount of the overpayment and enter the RCA claim. In the county-administered program the county financial workers will follow their county’s current procedures regarding entering and maintaining claims.

Judgment By Operation of Law (JOL) is not supported by statute for RCA overpayments. Do not send the Notice of Overpayment letter to the client using certified mail.

Do not pursue recovery on non-fraud overpayments on closed cases which total $35 or less. Follow MFIP policy in 0025.12.03 (Overpayments Exempt from Recovery).

Discontinue all recovery actions against a participant who the agency learns has filed Chapter 7 or Chapter 13 bankruptcy action or has been granted a discharge. See 0025.12.03.06 (Bankruptcy) for further details.

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