11260 Imposition of Disqualification Penalties - "See Policy Memo #99-10-09 re: "Applying penalties to Closed Cases (Cash and Food Assistance)".

 

11260.1 Administrative Disqualification Hearing

 

  1. If the ADHO rules that the household member has committed fraud or the household member has signed an AH-1100 , Waiver of the Right to an Administrative Disqualification Hearing, the household member shall be disqualified in accordance with the disqualification periods specified in 11221 beginning with the first month which follows the date the household member receives written notification of the hearing decision.

    To effect the disqualification period, the worker shall take action to disqualify the household member upon receipt of a Budget Request Memorandum from the hearing officer requesting benefit and eligibility information for the remaining household members, if any. This memorandum will be sent when the preliminary decision of fraud has been made by the hearing officer, or when the hearing officer has received a signed from the household member. The information provided by the worker on this memorandum will be used by the hearing officer to prepare the notice. The worker shall not issue any kind of local notice to the household member regarding the fraud disqualification.
     
  1. No further administrative appeal procedure exists after an adverse administrative disqualification hearing.

    The determination of fraud made by an ADHO cannot be reversed by a subsequent fair hearing decision. The household member, however, is entitled to seek relief in a court having appropriate jurisdiction. The period of disqualification may be subject to stay by a court of appropriate jurisdiction or other injunctive remedy.
     
  2. Once a disqualification period has been imposed against a fraudulent individual, the period of disqualification shall be initiated and shall continue uninterrupted until completed. The status of the individual at the time of the fraud decision has no affect on the establishment of the disqualification period. For example, a nonparticipating individual is found guilty of committing fraud in January. The disqualification period is established as February through the following January. This period is fixed and the individual is considered disqualified even if not receiving benefits. If the individual reapplies for benefits during the fixed period and is found eligible, then the individual shall be disqualified for the remainder of the period. The fraudulent individual's household shall continue to be responsible for repayment of the fraud overissuance regardless of the eligibility for program benefits.
     
  3. If the agency fails to act timely to disqualify the fraudulent individual, the individual can only be disqualified to the extent that the disqualification period has not elapsed. An agency claim SHALL NOT be established for any overissuance resulting from the fraudulent individual participating in the program when he/she should have been disqualified.

 

11260.2 Cases Referred to Local Fraud Unit

 

  1. Individuals found guilty of civil fraud or criminal fraud by a court of appropriate jurisdiction shall be disqualified for the length of time specified by the court. If the court fails to impose a disqualification period, a disqualification period shall be imposed in accordance with 11221, unless contrary to the court order. If a disqualification is ordered, but a date for initiating the disqualification period is not specified, the disqualification period for currently eligible individuals shall be initiated within 45 days of the date the disqualification was ordered. The disqualification period is initiated by the sending of the notice. The notice must be sent within 45 days, with the disqualification starting the month following the month in which the notice is sent (or should have been sent in cases where the agency does not act timely to disqualify the individual). Any other court-imposed disqualification (including those which are a result of signing a disqualification consent agreement in cases that enter diversion or those in which the court fails to specifically impose a disqualification period) shall be initiated within 45 days of the date the court found the individual guilty of civil or criminal misrepresentation or fraud. For fraudulent individuals not currently eligible, disqualification periods shall be initiated by notifying the household of the fraud and the specific time period established for disqualification. The disqualification period for individuals not currently eligible shall also be established within 45 days of the date the disqualification was ordered, or within 45 days of the date the court found the individual guilty of civil or criminal fraud as described above. The worker is responsible for notifying the fraudulent individual of the disqualification period and the effect on the remaining household members, if any.
     
  2. Once a disqualification period has been imposed against the fraudulent individual, the period of disqualification shall be initiated and shall continue uninterrupted until completed regardless of the eligibility of the fraudulent individual's household. The fraudulent individual's household shall continue to be responsible for repayment of the fraudulent overissuance regardless of its eligibility for program benefits.
     
  3. If the agency fails to act timely to disqualify the fraudulent individual, the individual can only be disqualified to the extent that the disqualification period has not elapsed. An agency error claim SHALL NOT be established for any overissuance resulting from the fraudulent individual participating in the program when he/she should have been disqualified.
     
  4. Once the client is found guilty of fraud, the claim type must be changed from "client" to "fraud." If the agency has been granted a civil or criminal judgment for the amount of the claim, this information needs to be coded on the system for the claim that has the judgment. See KEES user manual for more information  (For food assistance, claim amounts covered by a judgment can be collected via TOP past the normal 10 years time limit explained in 11126.1 (7)).

    NOTE:     It is very important that the claim type be changed to fraud before collection begins. The State agency retains 35% of all repayments on fraud claims and only 20% of all repayments on client error claims. (None is retained on the agency error claims.)