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Overissuance Collection Timeframes

If you liked the Gross/Net income checklist, then you’re really going to love this quick advocate checklist for figuring out what happens and when it happens whenever a household gets pulled into the vortex of a food stamp overissuance collection.

Here’s the drill:

Time to ESTABLISH a claim

  • Establishing a claim has two parts: Calculating and sending a notice/demand.
  • In California the county welfare office must send a demand for payment (NOA or demand letter) if it calculates an administrative error or inadvertent household error within three years of the overissuance. [MPP § 63-801.111.]
    • Once the overissuance within this time frame is determined, California allows counties to go back six years from the date of discovery for NON-IPV (intentional progam violation) claims. [MPP § 63-801.311(b); 7 CFR § 273.18(c)(1)(i).] . See ACIN I-03-02(January 14, 2002) for an explanation of the difference between “establishing” (3-year limit from overissuance to demand) and “calculating” (6-years retro from discovery).
      Example: the overissuance is discovered and calculated in January 2008. The overissuance includes a period within three years of January 2008 (let’s say, January 2001 through March 2006). Once the three-year timeframe is met, the county can calculate up to six years from the date of calculation (in this example, back to January 2002).
    • BARRED from establishing a claim if the overissuance is $35 or less, or the county welfare department failed to ensure that a household signed the application form, completed a current work registration form, or was not certified in the correct county. [MPP § 63-801.12.]
  • IPV claims go back to the month of the IPV, regardless of when it was discovered.

Note: FNS has clarified that these timeframes are a management tool, and that the obligation to establish a cliam is not affected or ended by exceeding the itmeframe.  75 Fed. Reg. 78153.

Time to COLLECT a claim

  • Once a claim is established, the county has three years in which to collect administrative erroroverissuances.
    • A claim is “established” by sending a demand letter (the NOA, demand for repayment or criminal suit).
  • No limit on IPVs.
  • No limit, per se, on inadvertent household error (client-caused) overissuances, except if the claim is in suspense (i.e., too expensive to collect or household cannot be located). [MPP 63-801.411.] Counties have the option of terminating claims in suspense for more than three years. [MPP: § 63-801.53.]
    • However, California law conflicts with federal mandates! Federal law provides that if the inadvertent-household-error claim is “delinquent” for more than three years, it MUST be written off, UNLESS the state is doing a treasury offset. [7 CFR § 273.18(c)(8)(ii)(e).]
      Delinquent means three years with NO action. Allotment reduction is a form of collection, and does not render the overissuance inactive. [7 C.F.R. § 273.18(e)(5)(i) (defining delinquency), and (f) (allotment reduction is a form of payment).] Federal law defines delinquent as not setting up a payment schedule after demand, or missing a payment. The claim remains delinquent until payment is received in full, allotment reduction is invoked, or if the State agency determines to either resume or re-negotiate the repayment schedule. [7 C.F.R. § 273.18(e)(5)(B)(ii).] A claim is not delinquent if the agency is collecting on a prior overissuance through a repayment plan or allotment reduction, if the agency intends to start collection on the overissuance when the prior claim is paid off. [7 C.F.R. § 273.18(e)(5)(B)(iv).]