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State of Wisconsin |
HISTORY |
The policy on this page is from a previous version of the handbook.
7.3.2.1 Client and Non-client Error
7.3.2.2 Collecting Client and Nonclient Error Claims Against Participating Households
7.3.2.3 Collecting Claims for Client & Non Client Errors Against Non-Participating Household
7.3.2.7 Writing-Off Claims Against Non-Participating Households
7.3.2.9 Timely Negative Notice
When calculating the overissuance, consider the FS group’s reporting requirements. Do not use income or expenses, or changes in income and expenses that were not reported and were not required to be reported.
Use converted income to determine ongoing benefit eligibility for the overissuance calculation. Only use the income and expenses reported or required to be reported for each month of the overissuance period. In claim calculations, disregard income that was not previously reported and was not required to be reported.
The "Date of Discovery" is the date you become aware of the potential overissuance. This date is used to establish the look back period. The overissuance period begins with the date of discovery and extends back up to one year for non-client errors and up to six years for client errors. This look back period is the period of time during which the overissuance may have occurred.
From this point forward the term “Date of Discovery” will be synonymous with the ‘Date of Awareness.” "Date of Discovery" will be used on all future correspondence. The intent of the policy is that both terms are part of a process to define the overissuance period. The overissuance period consists of the number of months during which there were overpayments within the look back period. The overissuance period begins with the first month had the change been reported timely and acted on timely. It would have been effective up to the month prior to when the case was corrected.
Client Error
Establish a claim for a client error that occurred when the FS group unintentionally:
Failed to provide correct or complete information.
Failed to report a change that was required to be reported.
Received FS for which it was not entitled pending a fair hearing decision.
The look back period for client errors begins with the date of discovery (the day the IM discovered the potential that an overissuance may exist) and extends backward:
Six years, or
To the month the change would have been effective had the group timely reported it, whichever is most recent.
The overissuance period begins with the first month had the change been reported timely, and would have been effective up to the month prior to when the case was corrected.
It is essential that the date of discovery be documented in case comments. This date locks in the look back and overissuance period. This date will not change even if the overissuance is calculated untimely.
The month the change would have been effective cannot be more than 2 months after the change in circumstance actually occurred.
When determining if an overissuance 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 household size to determine if the income should have been reported.
In overissuance 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 expenses were reported correctly at the time of the overissuance, use those same expenses when calculating the overissuance. If expenses were incorrectly reported, and subsequently verified (examples: the expense was considered questionable and 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 worker knows the expense is incorrect and verification was requested but was not received, do not allow the expense in the overpayment calculation.
Earned income needs to be verified when determining income to be used in an overpayment calculation.
For Earned Income:
Dated check stubs of income that should have been reported that caused the overpayment.
Earnings reports, a statement from the employer, or ECF forms, signed by the employer, with all needed information.
Note: 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.
Non-client Error
Establish a claim for a non-client error that occurred when the agency:
Did not take prompt action on a change the FS group reported, or
Incorrectly computed the group's income or a deduction, or
Continued to give the group FS after its eligibility ended, or
Did not reduce the group's FS to correspond with a W-2 , SSI, or GR grant increase.
The look back period for non-client errors begins with the date of discovery (the day the IM discovered the potential that an overissuance may exist) and extends backward:
Twelve months, or
To the month the error was effective had the change been acted on timely, whichever is most recent.
The overissuance period begins with the first month the change would have been effective up to the month prior to when the case was corrected.
It is essential that the date of discovery be documented in case comments. This date locks in the look back and overissuance period. This date will not change even if calculated untimely.
In order to meet the established timeliness requirements, overissuance claims must be completed before the last day of the quarter following the quarter in which the IM discovered an overissuance. This holds true for both client and agency errors. Overissuance claims must be established and recovered even if they are not calculated within this timeframe. Overissuance claims must be established and recovered even if they are calculated late; failing to complete a claim within the given timeframe does not void the overissuance.
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Example 1: At Jeff’s review on June 5, 2012, he reported income of $800 per month. His worker Marcia miscalculated Jeff’s income and budgeted $400/month instead of the $800/month that Jeff reported. When Jeff submits his SMRF on December 5, 2012, Marcia discovers her error and corrects the case effective January 1, 2013. While reviewing Jeff’s income, Marcia discovers that Jeff started a second job on August 1, from which he earns $600/month.
To calculate the overissuance, Marcia budgets the correct income amount of $800 from the job Jeff reported. Marcia does not use the income in the overpayment calculation from the second job, because this income was not required to be reported due to reduced reporting requirements. Jeff reports this change on his December 2012 SMRF and this income is budgeted effective January 1, 2013.
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Example 2: Margaret submitted a complete SMRF on April 22, 2013. On the SMRF Margaret reports her income decreased from $700 to $500. On May 20, 2013 Margaret’s worker, John, discovers the error; he corrects the case effective July 1, 2013. While determining if Margaret has an overissuance, John learns that Margaret began a second job, from which she earns $120/month. The additional income does not put Margaret’s income over 130% of the FPL, so she is not required to report the change until his next review is due, due to reduced reporting requirements.
John does not use the income from Margaret’s second job because it was not required to be reported. |
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Example 3: Matt submitted a complete SMRF on August 4, 2013. On August 8, 2013 Matt’s worker John discovers that Matt started a job on April 5, 2013 that should have been reported because the income from this job puts him over the 130% FPL threshold. John corrects the case and closes the case effective August 31, 2013.
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Establish collection of overissuance claims against participating households unless:
The claim is collected through an offset, or
Claims are protected by the Federal Bankruptcy Code
Do not charge any interest on the claim.
If the client wishes to pay the whole claim at once, s/he may do so.
A participating household is defined as a food unit or AG that is still open and receiving FS benefits.
Establish overissuance claims for non-participating food units only if the amount of the claim is $125.00 or more.
A non-participating household is defined as a food unit or AG that is closed and not receiving FS benefits.
Establish a claim due to an Intentional Program Violation ( IPV ) only when one of these conditions exists. The food unit member:
Signs a waiver of the disqualification hearing, or
Signs a disqualification consent agreement after being referred for prosecution, or
Is convicted of a FS felony or found guilty of IPV in an Administrative Disqualification Hearing or judicial proceeding.
Conduct which may lead to an IPV determination for an individual include:
Making false or misleading statements or misrepresenting, concealing or withholding facts to become eligible or to remain eligible for benefits, or
Committing any act that constitutes a violation of FoodShare regulations or state statutes relating to the use, presentation, transfer, acquisition, receipt or possession of FS, i.e., trafficking FS.
The cardholder is the only person that can make authorized purchases on his/her Quest card to purchase food for the card holder’s household. However, cardholders may verbally authorize someone else to make purchases for them as long as the purchases are for the case head’s household.
An unauthorized individual that uses a Quest card without the cardholder’s consent is committing fraud. Unauthorized individuals using the card to make purchases for themselves without the card holder’s consent is also committing fraud. If the cardholder knows the card is in the hands of an unauthorized individual, both the card holder and unauthorized individual may be accused of fraud.
| Example 4: Ellen is receiving FoodShare for herself, and her two children. Ellen is sick and gives her card to a friend to buy food for the HH, and her friend does. Since she authorizes her friend to buy food for Ellen’s family she is considered an authorized buyer even though there is not a form filled out. |
| Example 5: Steve is a single FS recipient who has been in jail for the last 4 months. Steve gives his Quest card to a friend to use while he is in jail. His friend is not buying food for Steve, the person eligible for the card. His friend is an unauthorized buyer, and both are guilty of committing fraud. |
If you have a pending IPV hearing, establish the claim as a nonclient error. If the case has been referred to the DA for prosecution, discuss the claim establishment with the DA or your legal counsel.
If the DA or your legal counsel advises that processing a claim as a client error may create bias against an IPV judgment, do not process the claim until the IPV determination is made.
For eligibility-related IPV claims, do not apply the 20% earned income deduction to earned income which was required to be reported, and was not reported timely. If expenses were reported correctly at the time of the overissuance, use the same expenses when calculating the overissuance. If not, then do not use the expenses in the calculation.
In claim calculations, disregard income that was not previously reported and was not required to be reported.
For trafficking-related claims, establish the claim as determined by:
the individual’s admission, or
the amount ordered through adjudication, or
the documentation that forms the basis for the trafficking charge.
Offset the IPV claim against any restoration amount owed to the group. Start collection action for the remaining balance.
You must collect an IPV claim previously handled as a client error claim. Start the IPV procedure for collection whenever a client error is later determined to be an IPV.
Enter the IPV information in CARES to recalculate the claim amount as an IPV type, and
Send the FS group a new Notice of FS Overissuance showing IPV as the reason, and
Send a new Notice of Repayment Agreement.
Do not charge any interest on the claim.
IPV information is entered in CARES as soon as possible after the date of decision either by a worker or through the Data Exchange (DX) process for IPVs that have occurred in other states. Workers enter the type of offense on AIIP as indicated in the legal IPV documents. When the sanction number and type of offense code are entered, CARES will automatically calculate the sanction duration period.
If the document does not contain the offense type, obtain more information from the party who issued the IPV. The Sanction Duration field should not be updated by workers unless it is necessary to override a sanction duration based on legal documents that indicate a different sanction duration period.
Sanction duration is the number of months a recipient is disqualified from receiving FS. Code 999 is permanent disqualification. No sanction end date will appear if the sanction duration is 999.
An overissuance due to any type of error will be recovered from a FS group participating in the program by reducing their allotment.
The type of error determines the amount that will be recovered each month.
Client/Nonclient error. CARES will reduce the allotment by the greater of 10% of the group's monthly allotment or $10 each month. The $10 minimum benefit level for 1 or 2 person groups applies before CARES reduces the allotment.
IPV. CARES will reduce the allotment by the greater of 20% of the group's monthly entitlement or $20 each month. The entitlement is the amount of benefits the group would have received if not for the disqualification of a FS group member. The $10 minimum benefit level for 1 or 2 person groups applies before CARES reduces the allotment.
CARES will not allow you to reduce the minimum deduction to less than $10 for Client/Nonclient and less than $20 for an IPV.
Claims against non-participating households may be written off if reasonable collection efforts have been made and the debt is determined to be uncollectable. Recommendation to write-off can be made if proper documentation is submitted to demonstrate that the claim meets any of the following criteria:
It is found to be invalid in a fair hearing, administrative or judicial decision.
It is against a household in which all adult members are deceased and the State does not plan to pursue collection against the estate.
It has been discharged through bankruptcy or a bankruptcy stay is in effect.
It cannot be substantiated from case records.
The state agency has determined, after exhausting collection efforts, that it is not cost-effective to collect the claim. If the request to write off the claim is made on this basis, the following criteria should be used:
The claim has an outstanding balance of $24 or less and has been past due for 90 days or more.
The claim is from $25 to $499 and:
Three past due notices have been sent,
It was referred for tax intercept, if the tax intercept was successful the account
should remain open for 3 years or until paid in full, and
It has been past due for 3 years.
The claim is from $500 to $4999 and:
Three past due notices have been sent,
It was referred for tax intercept (if the tax intercept was successful the account should remain open for 5 years or until paid in full),
It has been considered for referral to a collection agency or credit bureau, and
It has been past due for 5 years.
The claim is over $5000 and:
Three past due notices have been sent,
It was referred for tax intercept (if the tax intercept was successful the account should remain open for 10 years or until paid in full),
It has been considered for referral to a collection agency or credit bureau, and
It has been past due for 10 years.
Documentation of the following information is required:
The age of the claims,
Actions taken to collect,
Documents relevant to the specific claim, e.g., death certificates, bankruptcy discharge orders, administrative or judicial decisions.
Recommendations for the writing-off of claims must be submitted to the Public Assistance Collection Unit P.O. Box 8938, Madison, WI 53708-8938.
If a group has overpaid a claim, refund the amount overpaid as soon as you discover it. Request reimbursement from DES. Follow the instructions in the Accounting Reports Manual, IV.
FS benefits issued solely because the 10-day negative notice requirement cannot be met, are not an overissuance. Do not establish a claim or recover this type of issuance.
The State of Wisconsin Public Assistance Collections Unit uses tax intercept from both state and federal tax refunds to recover overpayments from anyone who has become delinquent in repayment of an overissuance.
To use tax intercept, the overpayment must be considered delinquent. Delinquency is defined as failing to make the monthly payment by the due date three times over the life of the debt. The collection system sends three dunning, or past due, notices for each of the three missed payments. The debt must meet all six of the criteria below:
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State |
Federal |
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1 |
Valid and legally enforceable | Valid and legally enforceable |
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2 |
All error types | All error types |
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3 |
$20 | $25 |
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4 |
At least 30 days after the third notification of the tax intercept. | At least 120 days from notification of overissuance. |
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5 |
Free from any current appeals. | Free from any current appeals. |
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6 |
Incurred by someone who is not currently in bankruptcy. | Incurred by someone who is not currently in bankruptcy. |
State tax intercept notices include a 30 day fair hearing right. The Division of Hearings and Appeals conducts the fair hearing. Federal intercept notices have a 60 day administrative review process. The Public Assistance Collections Unit conducts the administrative desk review. The client must provide evidence showing the claim is not past due, or is not legally enforceable. If the client can not provide that evidence, the case will be sent for intercept.
The case is not subject to the tax intercept while under review or appeal.
A client who makes a repayment agreement may not be subject to tax intercept as long as s/he is meeting the conditions of the agreement. If a member’s repayment agreement becomes delinquent, which is defined as three missed payments over the life of the debt and has been sent three dunning, or past due, notices, he or she is subject to both tax intercept and monthly repayment.
The policies for monthly repayments are listed on the repayment agreements:
Overpayments less than $500 should be paid by at least $50 monthly installments
Overpayments $500 and above should be paid within a three-year period either by equal monthly installments, or by monthly installments of not less than $20.
This page last updated in Release Number: 15-03
Release Date: 09/28/2015
Effective Date: 09/28/2015
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