The ARRC system will:
1. Retain prospective and retrospective budgeting principles to compute income overpayments that occur in their entirety prior to the implementation of SAR (SAR May 27, 2003).
2. Use a combination of prospective/retrospective budgeting and prospective budgeting principles for cash overpayment claims that begin prior to SAR but end on or after SAR implementation (SAR May 27, 2003).
3. Retain pre-SAR claim computation methodology for overpayments that occur at application, meaning the applicant is in receipt of the income or will receive income in the month of application but does not report it.
4. Compute all income overpayments that occur on or after SAR implementation using prospective budgeting and applying actual income (SAR May 27, 2003).
5. Prior to August 1, 2005, compute all cash lump sum overpayments as income in the month of receipt and, if any monies remain, as a resource in the ensuing months.
6. As of May 27, 2003, but before August 1, 2005, except at application where the applicant failed to report the income in hand or expected to be received in the month of application, add 10 calendar days to the day following the first income date entered for cash overpayment claims.
7. Drop April and May 2003 income when transitioning cash computations from retrospective to prospective budgeting.
8. As of August 1, 2005, except at application where the applicant failed to report income in hand or expected to be received in the month of application, begin the income overpayment with the first benefit issued on or after the 11th day of the month following the month the income was received.
9. Continue to compute agency error overpayment claims as currently computed by the ARRC system.
The ARRC system will retain prospective and retrospective budgeting principles to compute earned income overpayment claims that begin and end prior to the May 27, 2003 SAR implementation date. These budgeting principles will remain in place for at least five years.
Example: The CAO discovered a cash earned income overpayment on August 16, 2003. The PA-78A verified that the individual worked for five months beginning November 3, 2002 to March 15, 2003 when the individual was fired. The earned income from employment was never reported although it was in an amount low enough that would have allowed the individual to continue to receive assistance had it been reported. The ARRC system will retrospectively budget this claim.
The ARRC system will compute cash income overpayment claims that begin prior to SAR but end on or after May 27, 2003 using a combination of retrospective/prospective budgeting and prospective budgeting principles. The ARRC system will use the actual income in each month to compute the overpayment claim for that month.
Cash Overpayment in On-Going Assistance Cases That Begins Prior to May 27, 2003 and Ends On/After SAR Implementation
The ARRC system computes the claim using either prospective budgeting or both retrospective/prospective budgeting.
Unreported, Underreported, or Late Reported Income That Makes The Budget Group Ineligible
The ARRC system will compute this cash income overpayment claim by taking the first assistance payment of the month in which the individual would have been ineligible (and the ineligibility runs for at least two consecutive months) --pre-SAR ARRC computation logic.
The ARRC system will use the actual income entered by the CAO for the number of months of the overpayment.
The ARRC system will end the claim the day prior to case closure.
Example: Mrs. Marks, a cash assistance recipient, began receiving $300 a week from work beginning June 16, 2002. She did not report this income but the CAO discovered it in September 2003 and closed the individual’s case effective October 13, 2003. Mrs. Marks received assistance payments of $200 each on the 13th and 28th of each month.
Claim Computation: The claim begins June 13, 2002 and ends October 12, 2003. The amount of the claim is $6,400 ($400 a month in assistance times 16 months).
Unreported, Underreported, or Late Reported Income That Does Not Make The Budget Group Ineligible
The ARRC system will begin the cash claim retrospectively in the payment month of receipt and switch to prospective budgeting on or after May 27, 2003.
The ARRC system will switch from retrospective to prospective budgeting during the SAR transition period by dropping April’s and May’s income. As of June 2003, the ARRC system will apply June’s income to June’s assistance.
The ARRC system will switch from retrospective to prospective budgeting during the SAR transition period by dropping April’s and May’s income. If May’s second assistance payment was issued between May 27,2003 and May 31, 2003, the ARRC system will compare half of March’s income to the first assistance payment received in May.
The ARRC system will continue to apply actual income prospectively to each month of the overpayment following the SAR implementation date.
Example: Mrs. Marks began receiving cash assistance for herself and three children December 12, 2002. She received $210.50 in cash assistance on the 13th and 28th of each month. Mrs. Marks started working in February 2003 and received her first pay of $100 a week February 22, 2003. Mrs. Marks failed to report her job or wages. On October 17, 2003, the CAO learned that Mrs. Marks was working. The CAO calculated her wages and reduced her assistance beginning November 13.
Claim Computation: Since Mrs. Marks’ wages for each month did not make her ineligible, the cash claim period begins using retrospective budgeting with her April 13, 2003 assistance and ends November 12, 2003.
February’s wages affect
April’s assistance
½ March’s wages affect ½ May’s assistance (no overpayment for the second
payment in May)
April’s wages are not used
May’s wages are not used
June’s wages affect June’s assistance
July’s wages affect July’s assistance
August’s wages affect August’s assistance
September’s wages affect September’s assistance
October’s wages affect October’s assistance.
Cash Overpayments at Application Prior/Post SAR Implementation
NOTE: The ARRC system cash claim computation methodology will not change. The ARRC system will continue to compute these claims using prospective budgeting.
As a reminder, the following is the cash claim computation methodology when income is not reported in the application month.
The claim period begins with the date of the initial cash assistance payment authorized in the application month since the assistance would have been authorized in a reduced amount because of income or would not have been authorized.
The claim period ends the day prior to the assistance payment date where the income would have been adjusted to the budget; or the day prior to case closure; or the day prior to the assistance date that would have last been effected by the income.
Example #1: Mrs. Marks and two children applied for cash assistance on January 15, 2003. On July 12, 2003, the CAO learned that Mrs. Marks has been employed at Safeway since December 19, 2002. The CAO determined Mrs. Marks and family were still eligible for assistance and reduced Mrs. Marks’ assistance of August 13th due to her earned income. Mrs. Marks received her assistance on the 13th and 28th of each month. She was authorized for assistance on January 22, 2003, receiving a prorated assistance amount of $275. Mrs. Marks received semi-monthly assistance in the amount of $200 at each pay date. She earned $300 a month in wages.
Claim Computation: The claim begins January 22, 2003 and ends August 12, 2003. The claim will include the prorated amount for January, and then $300 for each of the next six months. The ARRC system will apply the current claim computation budgeting principles to determine the January assistance to be recovered. The CAO will enter the income from employment for the entire overpayment period. The ARRC system will determine application status and the CAO will enter the date prior to the budget adjustment (August 12, 2003).
Example #2: Mrs. Marks applied for assistance on July 2, 2003 and is authorized July 5, 2003. On November 12, the CAO learned that Mrs. Marks received her first check from work on July 7. Mrs. Marks never reported employment or when she would receive her first pay during her application interview.
Claim Computation: When the CAO learns of the overpayment on November 12, 2003, the ARRC system begins the overpayment with the assistance payment of July 5, using the wages from employment in July to determine the July overpayment claim. The claim period ends the day prior to case closure or the day prior to budget adjustment.
The ARRC system will compute all cash earned income overpayments that occur on or after May 27, 2003 using prospective budgeting.
For overpayments that begin on or after May 27, 2003 but before August 1, 2005, the ARRC system will calculate 10 calendar days from the day following the date the individual received the income and begin the overpayment claim with the date of the first assistance payment date that follows the 10-calendar day reporting period.
Example: Mrs. Marks, a cash assistance individual, failed to report she began employment and the receipt of her first pay on September 15, 2003. She began receiving $100 a week and received two more pays in September, on the 22nd and 29th. The next month Mrs. Marks worked each week, received four pays of $100 a week. Mrs. Marks’ 10-calendar day reporting period for her September 15 wages expired on September 26. Because her second assistance payment of September was received on September 24, the first assistance that can be affected is in October. October’s income and assistance is used to determine the overpayment amount, not September.
For income overpayments that begin on or after August 1, 2005, the ARRC system will begin the overpayment with the first benefit issued on or after the 11th day of the month following the month the income was received.
Example: Ms. Marks, a cash assistance individual, receives benefits on the 13th and 28th of each month. Ms. Marks failed to report she began employment and the receipt of her first pay on August 15, 2005. She began receiving $100 a week and received two more pays in August, on the 22nd and 29th. The next month Ms. Marks worked each week and received four pays of $100 a week. Ms. Marks’ reporting period for her August 15 wages expired on September 10, 2005. The first assistance that can be affected is the September 13th benefit.
Unreported, Underreported, or Late Reported Income That Makes The Budget Group Ineligible
For income overpayments that occur on or after May 27, 2003 but before August 1, 2005, the ARRC system will calculate 10 calendar days from the day following the date the individual received the income and begin the overpayment claim with the date of the first assistance payment date that follows the 10-calendar day reporting period.
For income overpayments that occur on or after August 1, 2005, the ARRC system will begin the overpayment with the first benefit issued on or after the 11th day of the month following the month the income was received.
The ARRC system will use the gross income entered by the CAO for each month to compare to the assistance received.
The claim period will end the day prior to case closure or the day prior to the assistance payment date no longer affected by the income that stopped/ceased.
Example #1: Mrs. Marks started employment at Jackson’s Manufacturing on August 10, 2003. Mrs. Marks received her first pay on August 16 of $300. She is paid weekly but never reported her wages or job to the CAO. On November 23, the CAO learned through an IEVS hit that Mrs. Marks was working. The CAO spoke to Mrs. Marks who admitted working and asked that her case be evaluated for continuing assistance. The CAO determined that Mrs. Marks’ wages were sufficient enough to make her ineligible. The CAO issued an advance notice and closed Mrs. Marks’ case effective December 28. Mrs. Marks had been receiving assistance on the 13th and 28th of the month in the amount of $210.50 for herself and two children. The family lives in Lancaster, PA.
Claim Computation: The ARRC system will calculate the claim period to begin on August 28, 2003 and end on December 27, 2003. The claim amount is $1,684. The actual gross income from wages of $600 for August will be halved against the August 28 assistance payment and the lesser amount used in the overpayment calculation. The actual wages received in September, October, November, and December will be used to determine the remaining overpayment amount. December’s wages will be halved and used against the only assistance received in December (13th).
Example #2: Ms Anderson had been receiving cash benefits in Greene County (FSA $325) for herself and two children on the 4th and 18th of each month. Ms. Anderson started employment at ABC Manufacturing and received her first pay on August 19, 2005 of $350. She is paid $350 weekly but never reported her wages or job to the CAO. In November, the CAO discovered her employment and spoke with Ms. Anderson. Ms. Anderson admitted working and the CAO issued an advance notice and closed her case effective December 4 since her wages were sufficient enough to make her ineligible. Assume there are four weeks in each month.
Claim Computation: The ARRC system will calculate the claim period to begin on September 18 and end on December 3. The claim amount is $812.50. The actual gross income from wages of $1,400 for September will be halved against the September 18 assistance payment and the lesser amount used in the overpayment calculation. The actual wages for October and November will be used to determine the remaining overpayment against the monthly assistance received.
Unreported, Underreported, or Late Reported Income That Does Not Make The Budget Group Ineligible.
For income overpayments that occur on or after May 27, 2003 but before August 1, 2005, the ARRC system will calculate 10 calendar days from the day following the date the individual received the income and begin the overpayment claim with the date of the first assistance payment date that follows the 10-calendar day reporting period.
For income overpayments that occur on or after August 1, 2005, the ARRC system will begin the overpayment with the first benefit issued on or after the 11th day of the month following the month the income was received.
The ARRC system will end the claim when the CAO learns of these wages and either adjusts the budget or takes no action because the income has stopped. If the CAO adjusts the budget, the claim will end the day prior to the budget adjustment.
If the income stopped before the budget could be adjusted, the claim will end the day prior to the next assistance payment date that would not have been affected by the unreported, underreported, or late reported income.
The ARRC system will use the gross income entered by the CAO for each month to compare to assistance received.
The ARRC system will not use the standard of need to calculate the overpayment.
There will be a cash overpayment in the month of receipt if the lump sum income is not reported and the ARRC system can select an assistance payment in the month of receipt after the 10 calendar day reporting period.
The ARRC system will calculate 10 calendar days from the day following the date the individual received the income and begin the overpayment claim with the date of the first assistance payment date that follows the 10-calendar day reporting period.
If the lump sum monies remain after the month of receipt and these monies exceed the resource limit for the budget group, there is a resource overpayment.
The ARRC system will calculate the overpayment by considering the entire monthly family size allowance for the resource overpayment.
The ARRC system will begin the resource overpayment claim with the date of the first assistance payment of the month following the month of lump sum receipt.
NOTE: The ARRC system will display a claim begin date in the month of lump sum receipt (month prior to beginning of resource overpayment). The date the ARRC system will reflect will be the 10-day reporting date and will not always be a cash assistance payment date. The ARRC system will also display a $0.00 claim in the month of lump sum receipt.
Example: Ms. Jones has received cash assistance of $316 per month in Dauphin County for three years. Ms. Jones received a $7,000 lump sum lottery winning on June 15, 2003 that she did not report to the CAO. The CAO discovered the lottery winning on July 8, 2003. Ms. Jones verified she remained over the resource limit through September 2003. Ms. Jones received assistance payments on the 3rd and 23rd of each month.
Claim Computation: The claim period is July 3, 2003 through October 2, 2003. However, the ARRC system will display the claim period as June 26, 2003 through October 2, 2003 because of the zero claim in the income month of receipt. (June 26, 2003 is the 10-day reporting date)
The ARRC system will begin the claim period with the first assistance payment in the first month Ms. Jones exceeds the resource limit. (No payment date can be met in the month of receipt after giving the 10 days). The ARRC system will end the claim with the day prior to the first assistance payment in the month Ms. Jones was again within the resource limits.
The claim amount is $948. This claim is a resource only overpayment. Ms. Jones exceeded the resource limit in July, August, and September. Each month, the entire family size allowance ($316) is used to calculate the overpayment.
Example: Mrs. Marks received a lump sum inheritance of $20,000 on July 5, 2003 but never reported it to the CAO until her November 15th reapplication interview. The CAO learned that Mrs. Marks had $20,000 in the bank in July, $15,000 in the bank in August, $5,000 in September, $3,000 in October, and $800 in November. Mrs. Marks received $210.50 in TANF cash assistance on the 13th and 28th of each month for herself and two children.
Claim Computation: The ARRC system will begin the claim period with the assistance payment date of July 28 (10 calendar days from the day following receipt of the lump sum-July 16) and end the claim November 12th (the day prior to the November 13th assistance payment date). The claim is for an income and resource overpayment.
NOTE: The individual is again under the TANF resource limit in November.
The claim will begin with the date of the first assistance payment date in the first month of ineligibility. The ARRC system will apply the standard of need division to a lump sum received prior to May 27, 2003.
NOTE: The standard of need calculations will cease with any monies remaining on or after May 27, 2003.
Any lump sum claim starting before May 27, 2003, using standard of need, will continue as a resource overpayment in June 2003 until the budget group is within resource limits.
The CAO will provide an adjusted income date, which is the date of the assistance payment in which the benefit was adjusted or the last day of the calendar month in which the budget group still exceeds the resource limit.
The claim will end with the day prior to the first assistance payment date of the next month when the resource limit is no longer exceeded or the day prior to case closure or adjustment.
Example: Ms. Jones won the lottery and received a lump sum payment of $10,000 on April 14, 2003, but never reported it to the CAO. The CAO discovered it in February 2004. At the request of the CAO, Ms. Jones verified she remained over the resource limit through December 2003. Ms. Jones was within resource limits in January 2004.
Claim Computation: The ARRC system will begin the claim period with the first assistance payment date in April 2003. The ARRC system will divide the lump sum of $10,000 by the standard of need in April and May. The ARRC system will compute a resource overpayment for the period June through December. The claim will end with the day prior to the first assistance payment date in January 2004.
The ARRC system will not use the standard of need to calculate the overpayment.
The ARRC system will calculate the overpayment by considering the entire family size allowance.
The ARRC system will begin the lump sum overpayment with the first benefit issued on or after the 11th day of the month following the month the lump sum was received and calculate a resource overpayment each month the budget group exceeds the resource limit.
There is no overpayment in the month of lump sum receipt.
NOTE: The ARRC system will display a claim begin date in the month of the lump sum receipt (month prior to beginning of resource overpayment). The date the ARRC system will reflect will be the 10-day reporting date and will not always be a cash assistance payment date. The ARRC system will also display a $0.00 claim in the month of lump sum receipt.
Example: Ms. Ames is receiving cash assistance in Philadelphia for herself and two children. Ms. Ames receives assistance benefits on the 8th and 25th of each month. The FSA is $403 per month. The CAO learned on November 7, 2005, that Ms. Ames had received a lump sum insurance settlement on August 19, 2005, for $10,000. The entire settlement was spent by October 30, 2005.
Claim Computation: The claim period is September 25, 2005, through November 7, 2005. The claim amount is $806.
The ARRC system will begin the claim period with the first benefit issued on or after the 11th day of the month following the month the lump sum was received since Ms. Ames resources exceeded the resource limit. The ARRC system will end the claim with the day prior to the first assistance payment in the month Ms. Ames was again within the resource limits. Each month, the entire family size allowance ($403) is used to calculate the overpayment.
Cash agency error income overpayments occur where the CAO received verification on an income change timely but did not act on it timely. The ARRC system will compute income agency error overpayment claims using the CAO’s method of calculating the income.
The CAO will calculate the appropriate begin date and enter this calculated date into the Begin Income field. The ARRC system will then use this date for the claim’s start date. The CAO will continue to input the date the income was adjusted.
The CAO will enter the gross monthly income for each month of the agency error overpayment. The CAO will apply the actual and/or 2.0 or 4.0 multiplier to the income in order to determine the monthly income for each month entered during the overpayment period.
Example: Mrs. Marks reported an increase in her monthly wages of $140 on October 3, 2003. She went over the reporting threshold of $100 a month on September 29 with her fourth pay of the month. Mrs. Marks reported her increased income on September 30. The CAO should have acted on this information, issued an adverse action notice, and affected Mrs. Marks second assistance payment of October (October 28). However, the CAO did not act on this information until November 10. At that time, the CAO determined that Mrs. Marks remained eligible for assistance and reduced her cash benefits for the assistance payment of November 28.
Claim Computation: The CAO will make the determination to apply either actual and/or the 2.0 multiplier to the income. The CAO will determine the appropriate begin date and enter that date in the Begin Income field. In this example, the CAO will enter October 28, 2003 in the Begin Income field. The CAO will enter November 27, 2003 in the Income Adjusted field. The ARRC system will apply incentives and deductions to the reported income. The ARRC system will subtract the gross income from the three-person FSA and claim the difference between what the October 28, 2003 assistance payment was and what it should have been. The ARRC system will complete the same calculation for November’s first check of the month.
Reissued March 24, 2021, replacing March 24, 2006