621.03 Rate and Method of Recoupment SR 21-25 Dated 10/21 (FSM-A)

Administrative Error and Inadvertent Household Error

The Special Investigations Unit (SIU) initiates and monitors all recovery actions. To calculate the claim against the household, SIU:

1.    Reviews the amounts of SNAP benefits actually issued during the month of discovery and the 12 months immediately preceding.

2.    Determines the correct SNAP entitlement for each of the months that a household received an overissuance. The earned income deduction is not allowed if the overissuance was the result of a failure to make a timely report of earned income.

3.    Totals the SNAP assistance issued each month that was in excess of the month’s entitlement. Establishes a claim for repayment.

4.    Offsets the claim by deducting any benefits not yet restored to the household. See Chapter 600, STANDARDS AND BUDGET.

5.    Proceeds with collection action to recover the overissuance.

SIU’s method of collection is determined by the type of claim listed below:

•       administrative error claim;

•       inadvertent household error claim;

•       intentional program violation claim (IPV);

•       court adjudicated claim; or

•       non-citizen sponsor claim.

Exceptions: SIU does not take collection action if:

•       the claim is recovered through offset;

•       the total amount of the claim is less than $35 for open cases or $125 for closed cases, and cannot be recovered by allotment reduction; or

•       there is documentation that the household cannot be located.

SIU may postpone collection on inadvertent household error claims being referred for prosecution or administrative disqualification. The SIU Supervisor makes the decision when collection will prejudice the case.

Refer to PART 713, INTENTIONAL PROGRAM VIOLATIONS (IPV), for Intentional Program Violation procedures.

SIU begins collection action with a demand letter informing the household of all the following:

•       the amount owed;

•       the reason for the claim;

•       the period of time the claim covers;

•       any offsetting that was done to reduce the amount of the claim;

•       how the household may pay the claim;

•       the household’s right to an administrative appeal; and

•       the availability of free legal services.

For the specific claim types below, the following information must be added to the demand letter:

Administrative Error Claim:

•       the household’s right to choose reducing their allotment as a method of repayment; and

•       the household’s right to request renegotiation of a repayment schedule if its economic circumstances change.

Inadvertent Household Error:

•       the household must notify DHHS of its choice of repayment method within 20 days of the date of:

-         the initial demand letter; or

-         the demand letter which follows an administrative hearing upholding the claim.

Inadvertent Household Error and Intentional Program Violation:

•       The household’s allotment will be automatically reduced if either of the following apply:

-         the household fails to make a timely choice of repayment method; or

-         the household fails to make a timely request for an administrative appeal and continuation of benefits.

Such allotment reduction begins with the first benefit issuance following the expiration of the household’s time limit for notifying DHHS of its choice of repayment method.

Demand Letters to the Sponsors of Non-Citizens

When an overissuance occurred because an non-citizen’s sponsor was at fault in providing incorrect information, the demand letter includes all the following:

•       the amount owed;

•       the reason for the claim;

•       how the claim may be paid;

•       that the sponsor will not be responsible for repayment of the claim if they can demonstrate good cause or no-fault for the incorrect information; and

•       the sponsor’s right to an administrative appeal to dispute a decision concerning the amount they owe or whether they were at fault in providing incorrect information.

The demand letter is followed with a personal contact whenever possible.

Failure to Respond to a Demand Letter

When a participating household fails to respond to a demand letter, SIU action depends on which type of claim is the object of collection:

•       Administrative Error Claim: If the household fails to respond to the first demand letter, DHHS generates additional demand letters every 30 days until the household responds by paying or the criteria for suspending collection is met. See Section 621.07, Suspending or Terminating Collection Action.

•       Inadvertent Household Error Claim: If the household fails to respond to the demand letter within 20 days of the date it was generated, DHHS reduces the household’s SNAP allotment.

When a nonparticipating household fails to respond to the first demand letter, DHHS generates additional demand letters every 30 days until the household has responded by paying the claim or meeting the criteria for suspending collection.

DHHS may begin civil court action to obtain payment of a claim against any household failing to respond to a demand letter.

Several methods are used to collect repayments of overissuances. These methods are:

•       lump sum payment;

•       installments;

•       allotment reduction; or

•       IRS Tax Refund Offset.

SNAP benefits may be used for repayment instead of cash.

Lump Sum Payments: Whenever possible, a household must repay an overissuance with a single cash payment. However, the lump sum payment must not create undue financial hardship for the household. Nor is the household required to liquidate all of its resources to accumulate the lump sum payment. If a household prefers, it may partially repay the overissuance with a lump sum.

Installments:

If a household cannot make a lump sum repayment, it may repay an overissuance according to an installment plan it negotiates with SIU.

The amount of a claim to be repaid through an installment plan cannot be less than what could be recovered through allotment reduction when both of the following are true:

•       the household is a participating household; and

•       the claim is either:

-         an inadvertent household error claim; or

-         an intentional program violation claim.

Once SIU and the household have agreed upon the monthly installment amount, the amount remains unchanged regardless of subsequent changes to the household’s monthly allotment. However, either SIU or the household may initiate renegotiation of the installment schedule if the household’s economic circumstances warrant it.

The maximum time period of any installment plan is 3 years. If the household will not be able to repay the claim within 3 years, the SIU Supervisor may forgive a portion of the claim.

The full amount of the claim—including any portions forgiven—may be used when offsetting benefits.

Allotment Reduction:

A participating household may repay an overissuance by having SIU reduce its monthly allotment. The criteria for allotment reduction depend on which type of claim is being collected:

•       Administrative Error Claim: The Department must collect any overissuance by setting up a repayment agreement, through allotment reduction, withholding unemployment compensation, recovering Federal pay or income tax refunds, or any other means. State agency errors can be automatically reduced by the greater of $10 or 10% of the allotment.

•       Inadvertent Household Error Claim: A household must repay an overissuance through allotment reduction if the claim has not been satisfied through a lump sum payment or establishment of an installment plan. The amount of the monthly reduction is 10% of the allotment or $10, whichever is greater.

The allotment of one- and two-member households cannot be reduced below the $20 monthly minimum.

Allotment reduction proceeds according to the following steps:

1.    SIU determines claims requiring allotment reduction, the amount of the claim, and the formula for reducing the monthly allotment.

2.    New HEIGHTS matches SIU files to determine if there is an outstanding SNAP claim.

3.    If there is an outstanding SNAP claim, New HEIGHTS reduces the benefit accordingly.

4.    SIU informs the household of the reason for the allotment reduction, the amount of the reduction, the new allotment amount, and the balance of the claim.

SIU posts each allotment reduction and reduces each claim balance accordingly.

If the household chooses allotment reduction, the reduction will begin with the first benefit issuance after the household chooses this method of repayment.

Repayment Agreement

SIU must issue a letter to the household describing the terms of the negotiated repayment agreement. The letter must include all the following:

•       the amount of the claim;

•       method of repayment;

•       amount to be repaid;

•       when payment is due;

•       where to send payment; and

•       that checks or money orders are to be made payable to Treasurer, State of New Hampshire, and sent to the Office of Financial Services, Attn. Accounts Payable.

References: He-W PART 708; RSA 161:10; 7 CFR 273.16 - .18; 7 USC 2017(a)