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State of Wisconsin |
HISTORY |
The policy on this page is from a previous version of the handbook.
An overpayment, also known as an overissuance, occurs when an assistance group receives benefits they were not entitled to. An overpayment claim is the established amount that the member(s) must repay. With exceptions, a claim should be established against the adult members of any food unit that has received an overpayment.
Types of Overpayments
There are three types of overpayment claims: client error, non-client error, and Intentional Program Violation (IPV). A non-client error is sometimes referred to as an agency error.
| Client Error | Non-Client Error | IPV |
| A client error occurs when the food unit unintentionally: | A non-client error occurs when the state or local agency: | An applicant or member commits an IPV when they intentionally: |
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A FoodShare assistance group cannot receive commodities from a Tribal Food Distribution program (see SECTION 3.11.1 FOOD DISTRIBUTION PROGRAM (TRIBAL COMMODITIES)) and FoodShare at the same time. Make a claim against any group that receives FoodShare in the same month it also participates in a Tribal Food Distribution Program. If the group receives:
7 CFR 273.16(b)(12)
7 CFR 273.18(a)(4)(i)
7 CFR 273.18(a)(4)(ii)
7 CFR 273.17(d)(4)
7 CFR 273.18(e)
All adults or emancipated minors who were included** in the food unit or should have been included in the food unit at the time the overpayment occurred are liable for the repayment of the overpaid FoodShare benefits. If a liable member moves to another food unit, the responsibility of the overpayment is maintained and follows that member to the new food unit.
**If someone was included in the food unit but should not have been included, they are not liable. An example may be a household reporting a change in household composition (someone moving out) and the agency failing to remove the person. The overpayment still exists, but the person who should have been removed would not be liable.
| Example 1 | Jack and Jake apply for FoodShare in January and include their 22-year-old son, Jeff, in their request. Their application is approved, and they receive the maximum monthly allotment for an assistance group of three. Jeff calls the agency in September to apply for FoodShare and is told he cannot receive the benefit because he is already receiving FoodShare on his parents’ case. Jeff tells the worker that he just moved back to Wisconsin after graduating from college and has been out of state for the last four years. Once the IM worker determines that an overpayment exists, the worker will create an overpayment claim with Jack and Jake as the liable parties. Jeff is not liable because, although he was included in the assistance group, he did not reside in the household during the overpayment period and is not responsible for the overpayment. |
| Example 2 | Susan is receiving FoodShare, and her 21-year-old daughter Jane lives with her. Because Jane is Susan's daughter, she must be included in the FoodShare determination with her mother (see SECTION 3.3.1.3 RELATIONSHIP RULES), but the agency failed to include her. The overpayment must be calculated using Jane’s income and information. Both Jane and Susan are liable for the overpayment. |
| Example 3 | Ellen received FoodShare for herself and her two minor children. Ellen failed to report that the father of the children also lived in the home. The father had earned income, which caused an overpayment of FoodShare benefits. Since the father and his income should have been included in the FoodShare benefit determination (see SECTION 3.3.1.3 RELATIONSHIP RULES) he is equally liable for the overpayment of FoodShare benefits. |
Liability for a FoodShare overpayment is not split evenly among liable parties. Liable persons are responsible for 100% of the overpayment until the debt is repaid in full.
| Example 4 | Jessa and Abbey are roommates in the same food unit receiving FoodShare. In June, Jessa informs the IM agency that she received a raise. The IM worker does not take prompt action to process this change, leading to an overpayment of $600. Together Jessa and Abbey are liable for the whole $600 overpayment. In their repayment agreement, they decide to make monthly payments of $40. They decide amongst themselves that Jessa will contribute $30 while Abbey contributes $10. |
A person connected to the household, such as an authorized representative or legal guardian, who actually trafficks or otherwise causes an overpayment is responsible and liable for a FoodShare overpayment in addition to the applicable food unit members. A connected person is only liable if they were responsible for the overpayment.
Exception: An authorized representative applying on behalf of a resident of a drug or alcohol treatment center or a group living arrangement (GLA), is responsible and liable for any FoodShare overpayments to the member due to misrepresentation or IPV which the authorized representative knowingly commits in the certification of treatment centers, GLA residents, or individual representatives. An authorized representative can be a person or an organization.
| Example 5 | Pat’s appointed legal guardian, Nick, completed and signed a FoodShare application for Pat and completed the required FoodShare interview on Pat’s behalf. Nick incorrectly reported that Pat was responsible for paying the total $1000 monthly rent expense. Nick received rent assistance and was only responsible for paying $200 per month in rent. This resulted in an overpayment on Pat’s case. Because Nick acted on behalf of Pat and is responsible for providing the incorrect information, Nick is liable to pay back the overpayment along with Pat. |
| Example 6 | Jennifer receives FoodShare benefits as a household of one. Jennifer has an authorized representative, Karey, who can act on Jennifer’s behalf. Jennifer completed the required SMRF and failed to report a new source of income which resulted in an overpayment. Karey did not complete the SMRF and therefore did not cause the overpayment. When the IM worker completes the overpayment, Jennifer is the only liable individual. |
When a person(s) is disqualified due to IPV, there may be other adult household members that are liable for repayment of any overpayment, even if they were not connected to the act of program violation.
7 CFR 273.18(g)(3)
Not every instance of overpaid FoodShare benefits will result in an overpayment claim.
Do not establish a claim if:
| Example 7 | Mary called the IM agency and requested to apply for FoodShare over the phone. Mary completed the FoodShare interview with the IM worker, but the call was disconnected prior to completing a telephonic signature. The IM worker inadvertently updates the case to reflect a signature was collected and confirms Mary open for FoodShare benefits without a signed application at $281 per month. Four months later, the IM agency discovers the error. An overpayment claim is not established because Mary did not sign the FoodShare application. |
| Example 8 | Lex applied for FoodShare and reported no income. Lex was confirmed eligible for benefits at $281 per month. At SMRF, the IM worker discovers that Lex was actually working at application and inadvertently failed to report income. Had Lex reported appropriately, Lex would have received $251 per month in FoodShare. Lex received $30 more than entitled to receive for a total of six months, or $180. Since the total amount overpaid was less than $180, no overpayment claim is established. |
| Example 9 | Misha receives FoodShare benefits. Misha’s case was randomly selected for a QC review in June. The QC reviewer determines that Misha was overpaid $150 in FoodShare benefits. Although the total claim amount is under $500, the error was found during a QC review and therefore a claim is established. |
7 CFR 273.18(c)
Calculating an overpayment claim involves determining the correct amount of benefits for each month in which a food unit received more FoodShare benefits than they were entitled to receive. The correct amount of benefits is the amount the food unit would have received had the information used in the eligibility determination been accurate at the time of the determination.
For the overpayment period, use the correct, converted, prospective income. This is the income that should have been budgeted at the time of the original determination for each month of the overpayment period. Overpayment calculations follow the same budgeting method as eligibility determinations.
Prospective budgeting is calculated by converting a weekly, bi-weekly, or semi-monthly payment into a monthly amount. This is the income an applicant or member is expected to receive during the current and future months. Income prospectively budgeted over the claim period should use converted monthly income and expenses (weekly multiplied by 4.3, biweekly multiplied by 2.15, and semi-monthly multiplied by 2) when applicable. Do not use the actual income to calculate the claim, even if all information is received for the entire overpayment claim period.
When calculating the overpayment, consider the food unit’s reporting requirements.
| Example 10 | Nehemiah applied for FoodShare on October 1. Nehemiah reported no income and was confirmed open for FoodShare. On February 25 the IM worker discovers that Nehemiah has been working since the previous August. The IM worker uses the four weekly paystubs that Nehemiah received in September to calculate prospective income since this is the verification that would have been available as of October 1 when Nehemiah applied. The average of the four weekly paystubs is multiplied by 4.3 to determine the monthly amount used to calculate the overpayment. |
Only use the income and expenses reported or required to be reported for each month of the overpayment period. Do not use income or expenses, or changes in income and expenses that were not reported and were not required to be reported.
When a food unit member should have been ineligible, their income and expenses must be deemed following the appropriate deeming standard.
The ineligible person is not counted as part of the assistance group in calculating the overpayment claim (see SECTION 4.7.5 PRORATED DEEMING and SECTION 4.7.6 GROSS DEEMING).
Eligibility verification requirements apply to determining overpayments (see Section 1.2 Verification). The food unit has the primary responsibility for providing documentary evidence to support statements in the case record and to resolve any questionable information. The worker must assist the household in obtaining this verification provided the food unit is cooperating with the agency.
The agency may contact the employer directly for verification. It is not necessary to contact the food unit before contacting the employer; both contacts can be completed at the same time.
The food unit must be given a reasonable opportunity to submit verification.
Members must be given 30 days to provide required verification unless it is determined that additional time is necessary in order to collect and submit the verification requested. If more than 30 days are allowed for verification by the member, document the number of days allowed and the reason. Employers should be given 20 days to verify.
For Earned Income, verification may include:
| Note | Income Eligibility Verification System (IEVS) may indicate that income was earned from an employer sometime during three months of the work quarter. Do not use IEVS in calculations and overpayments unless no other information is received verifying the earned income and best information available must be used. |
When all attempts to obtain needed verification are unsuccessful the worker must use the best available information to determine the monthly income amount for purposes of the overpayment calculation. When the food unit fails or refuses to provide income information needed to calculate the claim and no other information is available, there is no overpayment. If the relevant information is later provided by the food unit, the claim should be recalculated with the new information factored into calculating the monthly eligibility and benefit amount that should have been received.
When no other form of verification is available, then SWICA information is considered the best available information and should be used to calculate an overpayment.
Document clearly in case comments the unsuccessful requests for verification from the household and the employer, and the reason for using a SWICA match as the best available verification of monthly income. Also clearly document how the income amount was calculated from the SWICA match.
If while calculating an overpayment claim, it is found that there was an underissuance that was a result of agency error and the underissuance is within the last 12 months, the amount of the underissuance must be offset against the total claim amount (if a claim is established) or a supplemental issuance should occur if there is no overpayment claim established.
7 CFR 273.12(a)(5)(v)
When determining if an overpayment occurred due to an unreported increase in total gross monthly income, compare the total actual unconverted income amount to the income reporting limit for the FoodShare assistance group size to determine if the income should have been reported. Use the monthly gross income limit for the household size that should have existed at the time of its most recent certification or recertification, regardless of any subsequent changes in its household size.
| Example 11 | Craig applies for and receives FoodShare as a household of six. A SWICA match for Craig with significant wages is discovered midway through his certification period and a worker investigates for a potential overpayment. During the investigation, it is found that two of Craig’s friends that had been in the household moved out in month two, but it hadn’t been reported or updated on the case. Even though Craig’s household size was 4 at the time employment started, Craig’s reporting requirement would be if the household income increased over 130% of the FPL for a household of six, since that was the household size the last time the case was certified. |
In overpayment calculations, do not apply the 20% earned income disregard to earned income that was required to be reported but was not reported timely.
Disregard income that was not previously reported and was not required to be reported due to reduced reporting requirements.
If during an investigation it is found that expenses were reported correctly at the time of the overpayment, use those same expenses when calculating the overpayment. If expenses were incorrectly reported, and subsequently verified (for example, the expense was considered questionable and the IM worker requested and received verifications, or the expense was verified through a QC review or a WHEAP data exchange, etc.) use the verified amount in the overpayment calculation. If the IM worker knows the expense is incorrect and verification was requested but was not received, do not allow the expense in the overpayment calculation.
| Example 12 | Lizzie received FoodShare from April through September. On the application, Lizzie reported no employment income. In October, the IM worker is investigating a potential overpayment. The IM worker verifies that Lizzie was working at the time of application and failed to report the income. When determining the overpayment amount, the IM worker does not allow the 20% earned income disregard because Lizzie failed to appropriately report employment income at the time of application. |
| Example 13 | Sam is receiving FoodShare. A fraud report is received that indicates Sam has a roommate and is only responsible for $500 monthly in rent. Sam’s FoodShare case reflects a $1000 per month rent obligation. The IM agency investigates and finds that Sam misrepresented the rent obligation at time of application and receives verification that Sam’s monthly rent obligation is $500. When calculating the overpayment, the IM agency uses the verified correct amount of rent, $500. |
7 CFR 273.18(d)(2)
Date of Discovery
The date of discovery is the date the overpayment claim is established. This is the date that a claim is created, and a notice is triggered to be sent to the liable persons. The date of discovery is used to establish the look back period.
The date the claim is mailed or otherwise delivered to the food unit is considered the date of establishment of the claim for tracking purposes, including establishing delinquency for the purposes of tax intercept.
Look Back Period
7 CFR 273.18(c)(1)
The look back period is the period of time preceding the date of discovery during which a claim can be established if an overpayment occurred. Different types of errors have different look back periods.
Non-Client Error
The look back period for non-client errors begins with the date of discovery and extends backward to the most recent of the following:
| Example 14 | At Jeff’s renewal on June 5, he verified income of $800 per month. His IM worker miscalculated Jeff’s income and budgeted $400 per month instead of the $800 per month that Jeff verified. When Jeff submits his SMRF on December 5, the IM worker discovers her error and corrects the case effective January 1. The IM worker determined an overpayment of more than $500 exists and processes the overpayment that same day. To calculate the overpayment, the IM worker budgets the correct income amount of $800 from the job Jeff verified.
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Client Error
The look back period for client errors begins with the date of discovery and extends backward to the most recent of the following:
The overpayment period begins with the first month eligibility would have been impacted or changed had the change been reported timely and would have been effective up to the month prior to when the case and benefits were corrected.
The month the change would have been effective cannot be more than two months after the change in circumstance actually occurred.
| Example 15 | Matt submitted a complete SMRF on August 4. On August 8, Matt’s IM worker discovers that Matt started a job on April 5, and Matt received income in April that exceeded 130% of the FPL threshold. The income is sufficient that Matt is ineligible for FoodShare benefits. The new income should have been reported by the 10th of May. The IM worker corrects the case and closes it effective August 31. Matt’s IM worker creates a claim the same day for the overpaid benefits. The date of discovery is August 8. Had the April income change been reported timely, the case would have closed as of May 31. Therefore, the overpayment period is June 1 through August 31. Section 6.1.1 CHANGE REPORTING FOR ALL FOOD UNITS (SIMPLIFIED) applies, and the change must be reported by the 10th of the month following the month in which the total income exceeded 130% of the FPL. |
IPV, Trafficking, and Duplicate Participation Claims
The look back period for IPV, trafficking, and duplicate participation claims begins with the date of discovery and extends back up to 72 months, or the oldest month in when benefits were overpaid, whichever is more recent.
7 CFR 273.16(a)(1)
7 CFR 273.16(b)(12)
Establish a claim due to an Intentional Program Violation (IPV) (see SECTION 3.14.1 INTENTIONAL PROGRAM VIOLATION (IPV) DISQUALIFICATION) only when one of these conditions exists. The food unit member:
For trafficking-related claims, establish the claim as determined by either:
When investigating an IPV and there is sufficient evidence to pursue it in court or an administrative disqualification hearing, do not establish an overpayment claim until the hearing concludes or signs the disqualification consent form.
If there is not sufficient evidence to establish that a claim resulted from an IPV, the claim would be established as either a non-client error or client error claim based on the circumstances surrounding the overpayment. Most often, claims that were pursued for IPV and determined to be a valid overpayment, but lack sufficient evidence to establish an IPV will be client errors.
If an IPV is established, only establish a claim if there are overpaid or trafficked benefits in the previous 72 months. There is no time limit for establishing an IPV, but claims resulting from IPVs may only be established for overissuances or trafficking that occurred within the 72 months that precede the date of discovery.
7 CFR 273.18(d)
A Notice of FoodShare Overissuance (F-16028), a completed FoodShare Wisconsin Under/Overissuance Worksheet or FoodShare Wisconsin Overpayment Calculator worksheet (F-16030), and a FoodShare Repayment Agreement (F-16029) must be sent to the member for all types of claims. Workers following the overpayment establishment process in the BRITS system will meet this requirement since the notices will be systematically generated and mailed to the liable person(s). The FoodShare Repayment Agreement is mailed out at the beginning of the month in the month following the sending of a Notice of FoodShare Overissuance.
Mail all correspondence to the last known address reported to the agency, unless through investigation it is verified that the member no longer lives at that address. In this instance, agencies must demonstrate and document the due diligence process in obtaining the best-known address for the member.
If the claim or claim amount was not established at a fair hearing, a notice of adverse action must be provided. The notice of adverse action can be included with the claim notice or mailed separately. If a fair hearing official determines that a claim does exist against the food unit, the food unit must be re-notified of the claim.
This page last updated in Release Number: 23-01
Release Date: 04/17/2023
Effective Date: 04/17/2023
Notice: The content within this manual is the sole responsibility of the State of Wisconsin's Department of Health Services (DHS). This site will link to sites outside of DHS where appropriate. DHS is in no way responsible for the content of sites outside of DHS.
Publication Number: P-16001