Recoupment is a recovery method in which an individual’s benefits are reduced to repay an overpayment claim.
The individual has the right to appeal recoupment through a Departmental fair hearing, except when recoupment is ordered by a court.
The CAO will appear at any fair hearing on recoupment.
The rate of recoupment will be as follows:
SNAP
Agency Error (AE) and Inadvertent Household Error (IHE) claims – the recoupment rate is 10% of the household’s monthly allotment or $10 a month, whichever is greater.
Intentional Program Violation (IPV) – the recoupment rate is 20% of the household’s monthly allotment or $20 a month, whichever is greater, or the amount ordered by the court.
If the amount of the SNAP allotment is reduced to less than $10 or $0 because of recoupment, CIS will issue the benefit for less than $10. If recoupment would eliminate the benefit entirely, CIS records the actual recouped amount and OARS sends the individual a Suspension of SNAP Benefit notice (OIG 720) for the $0 benefit month.
CASH ASSISTANCE
CODE 1 – Individual error caused by circumstances beyond the individual’s control, such as serious illness, death, or accident, which made it impossible to expect the usual reporting requirements to be met, OR agency error, OR overpayments occurring even though the individual reported a change timely and accurately – the recoupment rate is 5% of the FSA.
CODE 2 – Any other individual error – the recoupment rate is 10% of the FSA.
If the semi-monthly assistance benefit is reduced to less than $5 because of recoupment, CIS will issue a benefit for less than $5 (the cash minimum payment requirements are not applicable in these situations). If recoupment reduces the semimonthly cash assistance benefit to $0, the individual will receive Non-money payment (NMP) Medical Assistance.
The OIG is responsible for initiating, monitoring, and controlling recoupment through the following computer systems:
OARS – OARS establishes the overpayment claim, produces notices, initiates, monitors, and terminates the benefit reduction and does claim accounting.
CIS – CIS reduces the benefit before it is issued. The benefit screen contains recoupment information.
NOTE: For OARS and CIS inquiry information, refer to system manuals “Using OARS and Using CIS,” on the OIM Intranet.
Recoupment will continue until the claim is fully paid or until benefits are discontinued. If a case is suspended for a late semi-annual reporting form and is later reinstated, recoupment will continue.
If the individual’s benefits are discontinued, or if he moves to another budget group, the OIG may try to recover the claim through other means. Options are:
direct collection from the individual;
recoupment from the remaining budget group members who were overpaid;
recoupment from any budget group that later includes a member of the overpaid budget group;
collection from any member of the overpaid budget group who is no longer receiving cash assistance.
The CAO is responsible for notifying the OIG in the following recoupment situations:
when a cash or SNAP budget with an unpaid recoupment claim is closed under one record number and opened under another record number (see CASE CLOSED BEFORE TOTAL OVERPAYMENT RECOUPED for instructions);
when a cash or SNAP budget with an unpaid recoupment claim is opened in a new county following an inter-county transfer (see INTER-COUNTY TRANSFER for instructions).
OARS will begin recoupment by sending the individual the following forms:
Notice of Assistance Check Reduction (OIG 740) and Overpayment Calculation Sheet (OIG 741). These forms notify the individual in a non-prosecution case of how the overpayment was calculated and the date his cash assistance benefits will be reduced. The OIG 740 serves as advance notice. OARS also sends a copy of the OIG 740 to the CAO. The CAO does not receive a copy of the overpayment calculation.
Recoupment Notice – Prosecution Case (OIG 742). The OIG 742 is sent to the individual who has been prosecuted and found guilty of intentional noncompliance with program requirements. The form notifies the individual of the rate of recoupment and the date his benefits will be reduced. The OIG 742 serves as an advance notice, but the individual does not have the right to a Departmental fair hearing.
NOTE: The court may specify the rate of recoupment.
Diversion Program Overpayment Notice (OIG 790) and Overpayment Calculation Sheet. These forms notify the individual how the overpayment was calculated and the date cash assistance benefits will be reduced. The OIG 790 serves as advance notice.
Upon receipt of the OIG 740 or 742, the CAO will:
1. Determine if the individual’s SNAP allotment should be adjusted.
If a OIG 740 was received, read the third paragraph in the “REASON FOR OVERPAYMENT” section; it provides the CAO with instructions to either adjust or not adjust the SNAP allotment.
If a OIG 742 was received, the individual was successfully prosecuted and the cause of the overpayment was an IPV. Do not adjust the SNAP allotment (SNAP Handbook, Section 568.53).
2. File the OIG 740 or 742 in the case record. Retain for three years, or until replaced by a later recoupment notice, or until recoupment has been completed.
NOTE: Do not send an advance or confirming notice to the individual regarding the recoupment action and the subsequent reduction in the benefit amount. The OIG notices serve those purposes.
If the court does not order an individual to repay an overpayment claim through recoupment, the individual must select one of the following options to repay the claim.
Repay the entire overpayment claim amount in one lump sum;
Make a partial lump sum payment on the overpayment claim amount and repay the balance in monthly installments;
Repay the entire overpayment claim amount in monthly installments.
If an individual fails to respond to the initial demand notice, or select a payment option, or appeal the claim, the OIG will recover the claim through recoupment.
The OIG will begin recoupment action by sending the individual one of the following notices:
SNAP Benefits Overpayment Notice, OIG 711. The OIG 711 is a 3-page notice sent to the individual with an AE or IHE overpayment. Page 1 of the OIG 711 shows the amount of overpayment, the period of the overpayment, and the reason the overpayment occurred. Page 2 (OIG 711OP) lists the payment options available to the individual and notes that SNAP reduction will occur if the individual fails to select a payment option. Page 3 (OIG 711AP) provides the individual with the right to appeal, fair hearing information, and filing instructions. Enclosed with the OIG 711 is the SNAP Overissuance Computation Sheet, PA 711-C. The CAO is sent a copy of the OIG 711, pages 1, 2, and 3, but not a copy of the PA 711-C.
SNAP Recoupment Start Notice (OIG 714). The OIG sends the OIG 714 to individuals who are in delinquent payment or nonpayment status. The OIG 714 notifies the individual of the date recoupment will start. OARS sends the CAO a copy of the OIG 714.
SNAP Recoupment Prosecution Notice (OIG 718) OR SNAP recoupment Court-Ordered Installments (OIG 719). The OIG 718 or 719 is sent to the individual in a prosecution case when the court has ordered recoupment. The type of notice which is sent depends on the court order. The court orders the rate of recoupment. OARS will send a copy of the OIG 718 or OIG 719 to the CAO.
NOTE: The individual does not have the right to appeal through a Departmental fair hearing in cases of court ordered recoupment.
Upon receipt of a OIG 711, OIG 714, OIG 718, or OIG 719, the CAO will:
1. Update the SNAP computation pages in the case record to record the recoupment amount; and
2. File the OIG notice in the case record and retain for three years.
NOTE: Do not send an advance or confirming notice to the individual regarding the recoupment action and the subsequent reduction in the benefit amount. The OIG notices serve those purposes.
When the total claim amount has been recovered, recoupment ends. OARS monitors recoupment and is responsible for increasing the cash assistance benefit or SNAP allotment when recoupment has been accomplished.
When cash recoupment is completed, OARS will:
1. Send the individual a Final Recoupment Notice (OIG 749). The OIG 749 notifies the individual that the claim was paid in full.
2. Send a copy of the OIG 749 to the CAO.
The OIG 749 notifies the CAO that recoupment has ended. Upon receipt of the OIG 749, the CAO will:
1. Recompute SNAP to reflect the increased allotment, if necessary
2. File the OIG 749 in the case record and retain for 120 days.
If the CAO closes a case before the total claim has been recouped, recoupment will end. However, since the claim has not been fully repaid, recoupment must be started again if cash assistance or SNAP benefits are reopened. CIS alerts OARS that the case is closed. OARS will:
1. Send the individual one of the following forms:
For CASH ASSISTANCE, Recoupment Termination Notice – (OIG 748). The OIG 748 notifies the individual that recoupment has been discontinued and that a claim balance remains.
For SNAP, SNAP recoupment Termination Notice (OIG 723). The OIG 723 notifies the individual that recoupment has been discontinued before the claim was completely repaid. It informs the individual of the remaining claim balance and indicates that the OIG will contact the individual to finish repayment of the claim.
2. Send a copy of the OIG 748 or the OIG 723 to the CAO.
If the case is closed under one record number and reopened under another record number in the same county, the CAO will send a memo to the OIG. The memo should specify as the subject “Restart Recoupment.”
The memo must contain the old case number; the new case number; if the overpayment under the old case number was for cash, SNAP, or both; and if cash, SNAP, or both have been reopened under the new case number.
CIS will alert OARS when a closed case, which has an unpaid claim that was previously being recovered through recoupment, is reopened. OARS will:
1. Send the individual a Recoupment Restart Notice (OIG 752). The OIG 752 notifies the individual that recoupment will be resumed.
2. Send a copy of the OIG 752 to the CAO.
The OIG 752 notifies the CAO that recoupment is being restarted. Upon receipt and review of the OIG 752, the CAO will:
1. Recompute the SNAP benefit allotment if the cash overpayment was not caused by an IPV.
2. File the OIG 752 in the case record and retain for three years or until the claim is paid in full.
NOTE: Do not send an advance or confirming notice to the individual regarding the recoupment action and the subsequent reduction in the benefit amount. The OIG notices serve those purposes.
OARS will obtain changes in address from CIS. The CAO does not notify the OIG of any changes in case data.
Exception: The CAO will notify the OIG if a case with a claim being recovered through recoupment is closed under one record number and reopened under another record number. See instructions under Case Reopened Which Has Unpaid Claim Previously in Recoupment.
NOTE: If the individual who caused the overpayment leaves the overpaid budget group or household, recoupment can continue from the members who remain in the overpaid budget group or household.
The individual may appeal recoupment when he receives the notice that recoupment will begin.
Exception: The individual does not have the right to appeal through a Departmental fair hearing if recoupment is court ordered.
If an individual wants to appeal, the CAO will:
1. Help the individual complete a written request for a fair hearing.
NOTE: Any request for a fair hearing on cash recoupment must be in writing. An oral request is not sufficient.
2. Complete and process the ARRC Claim Change Form (PA 1001) to update the data on an overpayment referred through the ARRC System.
3. Refer the individual to the OIG if he has a question about recoupment of the overpayment. The OIG’s toll-free telephone number (1-800-932-0935) is listed on the OIG recoupment notices.
If the individual files an appeal before the deadline date shown on the recoupment notice, the recoupment action will stop until the hearing is held and a decision is handed down. The Bureau of Hearings and Appeal notifies the OIG of the appeal. OARS will:
1. Send the individual one of the following notices that indicate recoupment has been suspended because of the appeal:
For CASH ASSISTANCE, Recoupment Stop Notice – Appeal (OIG 745).
For SNAP, SNAP Recoupment Stop Notice – Appeal (OIG 721).
2. Send a copy of the OIG 745 or OIG 721 to the CAO.
The OIG 745 or the OIG 721 alerts the CAO that recoupment has been suspended and that the CASH assistance or SNAP allotment will not be reduced. When the CAO receives the OIG 745 or the OIG 721, the CAO will:
1. File the OIG 745 in the case record until a decision has been reached on the appeal. File the OIG 721 in the case record and retain for three years.
2. Recompute the SNAP benefit allotment if the individual has appealed cash recoupment, and a reduced amount of cash assistance was used in computing the SNAP allotment. The cash benefit will not be decreased because of the appeal.
3. Write “Under appeal” in the case record to indicate that the SNAP recoupment amount is not being deducted from the SNAP allotment.
4. Attend the fair hearing, to present testimony and evidence as to how the overpayment occurred, and how the SNAP overpayment was computed.
The OIG does not attend the hearing, but will submit to the Hearing Officer a written brief which explains the regulatory basis for the recoupment process.
The Bureau of Hearings and Appeals will send the CAO, OIG, and the individual a written notice of the hearing decision. If the decision is in favor of the individual, recoupment will not start. The CAO will note in the case record that the individual’s appeal was upheld. Complete and process the ARRC Claim Change Form (PA 1001) to update the ARRC System.
If the decision is in favor of the Department, OARS will start recoupment by sending the individual a Recoupment Notice – Fair Hearing Decision (OIG 751) for cash assistance or a SNAP Recoupment Start Notice – Appeal Denied (OIG 722) for SNAP, and send a copy to the CAO. Upon receipt of a OIG 751 or a OIG 722, the CAO will:
1. Recompute the SNAP allotment if the cash overpayment being recouped was not caused by an IPV.
2. Update the SNAP computation pages in the case record to note the recoupment amount.
3. File the OIG 751 or OIG 722 in the case record and retain for three years or until the claim is paid in full.
NOTE: Do not send an advance or confirming notice to the individual regarding the recoupment action and the subsequent reduction in the benefit amount. The OIG notices serve those purposes.
The OIG can recover only one claim at a time through recoupment in a particular program. If a case has multiple claims or an additional claim is established while one claim in the case is being recouped, the OIG will attempt recovery of these claims through voluntary recoupment or direct collection from the individual.
When a case is transferred to another county, the losing county will use reason code 099 to close the budget. OARS will learn from CIS that the budget was closed.
OARS will not have any information about the new case number assigned in the receiving county. For recoupment to resume under the new case number, the receiving CAO will send a memo to the OIG. The memo should specify as the subject “Inter-County Transfer, Restart Recoupment.” The memo must contain the old county and case number; the new county and case number; if the overpayment under the previous county and case number was for cash, SNAP, or both; and if cash, SNAP, or both have been reopened under the new county and case number.
Reissued March 24, 2006, replacing December 15, 2003; reviewed March 16, 2012