11125 Establishing Claims
and Repayment Agreements - Once the worker has determined the
amount of overpayment, a recovery account shall be created on the system
for the claim. The claim shall be designated as either a client, agency,
or fraud claim. See KEES user manual for more information.
Collection action for client or agency claims with no restored benefits
or supplemental payments due shall be initiated by sending the household
a repayment agreement.
NOTE: Collection action
should not be initiated on suspected fraud claims (either referred for
prosecution or for an administrative disqualification hearing) until after
the determination of fraud has been made. Refer to 11280
for initiating collection action on fraud claims.
After a claim determination has been made, the local office shall send
a repayment agreement and proceed as follows:
- Give the household 10 days to respond to the repayment agreement.
The reason the claim occurred must be explained on the letter.
- If the household responds with a payment on the claim, have the
payment submitted according to established procedures.
- If the household does not respond, or responds with a statement
that it is unable to pay, promises to pay, or asks for a fair hearing,
proceed as follows:
- If the household responds by saying it cannot repay, the worker
shall refer the claim to the Central Collection Unit unless there
is an active case. For a currently participating household, benefit
reduction shall be invoked. See (b) that follows.
- If a currently participating household fails to respond to
the written repayment agreement within 10 days of the date the
notice is mailed, the agency shall invoke benefit reduction. If
benefit reduction is invoked, only an adequate notice of action
is required. Refer to 11126.1
(4) for calculating the amount of benefit reduction. For a currently
participating household, benefit reduction shall begin with the
first benefit issued after the household has elected benefit reduction,
or failed to respond to the repayment agreement within the specified
time.
NOTE: See 11280
regarding initiating benefit reduction when an open case with
an agreement to repay a fraud claim (with the court or the Fraud
Unit) fails to make agreed upon payments.
- If there is ineligibility for continued assistance and the
case is closed, the agency is still required to attempt recovery.
At a minimum, the agency is required to initiate action to locate
the former recipient and, if located, initiate some form of action
to recover the overpayment. Such activities must be documented
in the case record. To meet these requirements the agency must
send a letter to the client at the last known address that advises
the client to contact the Central Collection Unit to work out
a repayment plan. If the letter is returned, the case record shall
be documented as to why it was not delivered. No further action
is required when the person cannot be located. However, should
the client reapply or the agency later learns the whereabouts
of the client, recovery efforts must be reinstituted.
In addition, if any non-participating food assistance household
does not respond to the repayment agreement sent by the local
agency, the Central Collection Unit shall follow their procedures
to collect on the claim.
- All repayment plans shall allow for complete repayment within
36 consecutive months, when possible. If total repayment is not
possible within 36 months because of limited available resources,
the plan will provide for complete recovery as soon as possible.