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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 Non-Client Error Claims Against Participating Food Units
7.3.2.3 Collecting Claims for Client & Non-Client Errors Against Non-Participating Food Units
7.3.2.7 Writing-Off Claims Against Non-Participating Food Units
When calculating the overpayment, consider the food unit’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. Calculating an overpayment claim means determining the correct amount of benefits for each month in which a household received an overpayment. The correct amount of benefits is the amount the household would have received had the information used in the eligibility determination been accurate at the time of the determination.
Use converted prospective income to determine ongoing benefit eligibility for the overpayment calculation. Do not use actual income to calculate the claim, even if all information is received for the entire overpayment claim period. Only use the income and expenses reported or required to be reported for each month of the overpayment period. In claim calculations, disregard income that was not previously reported and was not required to be reported.
When a food unit member should have been ineligible, their income and expenses should be deemed following the appropriate deeming standard. The ineligible individual should not be counted as part of the assistance group in calculating the overpayment claim. See 4.7.5 Prorated Deeming and 4.7.6 Gross Deeming.
The "Date of Discovery" is the date you become aware of the potential overpayment. This date is used to establish the look back period. The overpayment period begins with the date of discovery and extends back up to one year (12 months) for non-client errors and up to six years (72 months) for client errors. This look back period is the period of time during which the overpayment 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 overpayment period. The overpayment period consists of the number of months during which there were overpayments within the look back period. The overpayment 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.
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. If the claim 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. Overpayment claim notices must be sent to the last-known address. 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.
Current verification requirements still apply. When all attempts to obtain the verification are unsuccessful the worker must use the best available information to determine the monthly income amount for purposes of the overpayment calculation. The food unit has 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. When the food unit fails or refuses to provide income information needed to calculate the claim and no other information is available, the claim should be calculated as if the food unit was completely ineligible. This process is consistent with eligibility determinations at application, six month report and renewal, where if the applicant member fails to provide mandatory verifications, the food unit is ineligible to receive FoodShare benefits (See 1.2.6.1 Required Verification to Determine Eligibility). The overpayment is to be established using certification rules. 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.
The food unit must be given a reasonable opportunity to provide verification of income, and the agency may contact the employer directly for verification. It is not necessary to contact the food unit prior to contacting the employer; both contacts can be completed at the same time. Members should be provided 30 days to provide 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 provision of verification by the member, document the number of days allowed and the reason. Employers should be provided 10 days to provide verification. 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 273.18(d)(1)
In order to meet the established timeliness requirements, overpayment claims must be completed before the last day of the quarter following the quarter in which the IM discovered an overpayment. This holds true for both client and non-client errors. Overpayment claims must be established and recovered even if they are not calculated within this timeframe. Overpayment 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 overpayment.
Client Error
A client error occurs when the food unit unintentionally:
Failed to provide correct or complete information,
Failed to report a change that was required to be reported, or
Received FoodShare 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 worker discovered the potential that an overpayment may exist) and extends backward:
Six years, or
To the month the change would have been effective had the food unit timely reported it, whichever is most recent.
The overpayment 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 overpayment period. This date will not change even if the overpayment is calculated untimely.
The month the change would have been effective cannot be more than two months after the change in circumstance actually occurred.
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.
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 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 (examples: 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.
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
A non-client error occurs when the state or local agency:
The look back period for non-client errors begins with the date of discovery (the day the IM discovered the potential that an overpayment 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 overpayment 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 overpayment period. This date will not change even if calculated untimely.
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Example 1: At Jeff’s renewal on June 5, 2012, he reported 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 reported. When Jeff submits his SMRF on December 5, 2012, the IM worker discovers her error and corrects the case effective January 1, 2013. While reviewing Jeff’s income, the IM worker discovers that Jeff started a second job on August 1, from which he earns $600 per month.
To calculate the overpayment, the IM worker budgets the correct income amount of $800 from the job Jeff reported. The IM worker 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: Matt submitted a complete SMRF on August 4, 2013. On August 8, 2013, Matt’s IM worker discovers that Matt started a job on April 5, 2013 and Matt received income in April that exceeded 130% of the FPL threshold. The new income should have been reported by the 10th of May. The IM worker corrects the case and closes it effective August 31, 2013.
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7 CFR 273.17(d)(4)
7 CFR 273.18(e)
Establish collection of overpayment claims against participating food units 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 member wishes to pay the whole claim at once, he or she may do so.
A participating food unit is one that is still open and receiving FoodShare benefits.
7 CFR 273.18(e)
Establish overpayment claims for non-participating food units only if the amount of the claim is $125 or more.
A non-participating food unit is one that is closed and not receiving FoodShare benefits.
Establish a claim due to an Intentional Program Violation (IPV 3.14.1) only when one of these conditions exists. The food unit member:
Signs a waiver of the disqualification hearing,
Signs a disqualification consent agreement after being referred for prosecution, or
Is convicted of a FoodShare felony or found guilty of IPV in an Administrative Disqualification Hearing or judicial proceeding.
7 CFR 273.16 (c)
An applicant or member commits an IPV when he or she intentionally:
Makes a false or misleading statement or misrepresents, conceals or withholds facts, including their identity or place of residence, to become eligible or to remain eligible for benefits; or
Commits any act that constitutes a violation of the Food and Nutrition Act of 2008, the Supplemental Nutrition Assistance Program Regulations, or any Wisconsin statute for the purpose of using, presentating, transferring, acquiring, receiving, or possessing, or trafficking of FoodSharebenefits or QUEST cards. See 3.14 for a definition of trafficking.
The cardholder is the only person that can make authorized purchases on the QUEST card, unless he or she verbally authorizes another person to make purchases on their behalf for their assistance group.
An unauthorized individual who uses a QUEST card without the cardholder’s consent is committing fraud. Unauthorized individuals using the card to make purchases for themselves without the cardholder’s consent are also committing fraud. If the cardholder knows the card is in the hands of an unauthorized individual, both the cardholder and unauthorized individual may be accused of fraud.
| Example 3:Ellen is receiving FoodShare for herself, and her two children. Ellen is sick and gives her QUEST card to a friend to buy food for the FoodShare assistance group, and her friend buys food for Ellen's family. Since Ellen authorizes her friend to buy food for Ellen’s family, the friend is considered an authorized buyer even though there is no written documentation of the authorization. |
| Example 4:Steve is a single FoodShare member who has been in jail for the last four 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 FoodShare benefits. His friend is an unauthorized buyer, and both are guilty of committing fraud. |
If a FoodShare member has a pending IPV hearing, the IM worker should establish the claim as a non-client error.
If the case has been referred to the DA for prosecution, the IM worker should discuss the claim establishment with the DA or the agency's legal counsel.
If the DA or agency's 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.
7 CFR 273.18(c)
7 CFR 273.16(c)(2)
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 overpayment, use the same expenses when calculating the overpayment. 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,
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 FoodShare assistance group. Start collection action for the remaining balance.
A worker 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.
Change the error type from “client error” in CARES to “IPV” error. This will update the CARES system to take the correct IPV recoupment amount for repayment of the debt. CARES will auto-generate overpayment notices and the Notice of Repayment Agreement.
Note: Sending a new notice and RPA starts the claim collection process all over again, providing new hearing rights on the merits of the claim. A new notice would disrupt the entire collection process that was already occurring. In addition, these claims could already be delinquent and in process of Federal and State tax offset, a new RPA would make the client think they could again make voluntary payments on an already delinquent claim, or disrupt an existing RPA. The IPV determination is entirely separate from the collection of the claim, with it’s own hearing rights for that process. For example: we already could legally collect the claim as a client error, we already notified them of the amount/ dates/ calculations, etc. which is required by law. The only thing that would trigger the legal requirement for a new notice would be increase of the balance we were trying to collect. The IPV determination process and recoupment notices notify the client of the change. The determination should have no effect on the collection that was already occurring.
Once the repayment process has started on a claim, do not send a new repayment agreement form related to the same claim unless there is an increase in the claim balance.
Note: The systems do not allow interest to be charged on a claim.
IPV information is entered in CARES as soon as possible after the date of decision.
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 IM 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 member is disqualified from receiving FoodShare. Code 999 is permanent disqualification. No sanction end date will appear if the sanction duration is 999.
7 CFR 273.16(g)(1)
An overpayment due to any type of error will be recovered from a FoodShare assistance group participating in the program by reducing their allotment.
The type of error determines the amount that will be recovered each month.
Client/non-client error: CARES will reduce the allotment by the greater of 10% of the FoodShare assistance group's monthly allotment or $10 each month. The $15 minimum benefit level for one or two 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 FoodShare group member. The $15 minimum benefit level for one or two person groups applies before CARES reduces the allotment.
CARES will not allow you to reduce the recovery amount to less than $10 for client/non-client and less than $20 for an IPV.
CARES will not reduce the initial allotment when the food unit is first certified unless they agree to a reduction.
Food units must be allowed to voluntarily pay towards an overpayment claim(s) by reducing the issued benefits from the EBT account. Written permission must be obtained for this to occur which can be completed with Request To Reduce Quest Card Balance, F-19002. If oral permission is instead obtained for a one-time reduction, a receipt showing the reduction must be sent to the food unit within 10 days. Local agency retention rules do not apply to this form of collection.
7 CFR 273.18(e)(8)
Claims against non-participating food units and FoodShare assistance groups may be written off if reasonable collection efforts have been made and the debt is determined to be uncollectable.
Claims that have been referred to and or have resulted in a successful tax intercept should not be written off but should remain open until paid in full.
Recommendation to write-off can be made if proper documentation is submitted to demonstrate that the claim meets any of the following criteria:
Documentation of the following information is required:
The age of the claims,
Actions taken to collect, and
Documents relevant to the specific claim, e.g., death certificates, bankruptcy discharge orders, and administrative or judicial decisions.
Recommendations for the writing-off of claims must be submitted to the Public Assistance Collection Unit, via mail at: P.O. Box 8938, Madison, WI 53708-8938; or via email at dwspacu@wisconsin.gov.
7 CFR 273.18(h)
The Department of Children and Families Bureau of Finance, Public Assistance Collections Unit (PACU) Section monitors and processes all refunds centrally at the State level. This section monitors all accounts for refunds. If a refund is due on a FoodShare overpayment and the FoodShare case is open, the PACU Collections Section will contact the appropriate agency to issue a FoodShare supplement benefit in the amount of the refund due. If an agency notices that a refund has not been processed, the agency can contact the PACU Collections Section at dwspacu@wisconsin.gov.
7 CFR 273.18(g)(8)
The State of Wisconsin Public Assistance Collections Unit uses tax intercept from both state and federal tax refunds to recover overpayments claims from anyone who has become delinquent in repayment of a claim.
To use tax intercept, the overpayment must be considered delinquent. Delinquency prior to establishing a repayment agreement is defined as a failure to establish an agreement by its due date. Once the due date passes, the claim is considered delinquent. Delinquency after a repayment agreement is established 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 Debt Criteria |
Federal Debt Criteria |
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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 overpayment. |
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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 federal administrative desk review. The member must provide evidence showing the claim is not past due, or is not legally enforceable. If the member cannot provide that evidence, the case will be sent for intercept.
The case is not subject to the state tax intercept while under appeal with the Division of Hearings and Appeals. A State fair hearing has no effect on a Federal Tax Intercept Action. A Federal desk review does not stay a Federal tax intercept action.
7 CFR 273.18(e) (4) and (5)
A member who makes a repayment agreement may not be subject to tax intercept as long as he or she is meeting the conditions of the agreement. Failure to sign and return a repayment agreement may result in further delinquency collection action. 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.
If more than one claim is established for a food unit, the additional claim(s) will not be considered delinquent so long as the other claim(s) are being currently paid through an installment agreement or allotment reduction and collection on the additional claim(s) are expected to begin once the prior claim is settled.
A claim is not subject to the requirements for delinquent debts if the collection failure reason is due to collection coordinated through the courts.
A claim awaiting a fair hearing decision must not be considered delinquent.
This page last updated in Release Number: 19-01
Release Date: 04/19/2019
Effective Date: 04/19/2019
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