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78. Underissuances: Getting too few food stamps

General authority: 7 U.S.C. § 2020(b), (e)(11); 7 C.F.R. § 273.17; MPP §63-802.
An “underissuance” is when a household gets less food stamps than it should have. This happens because the food stamp office makes a mistake. [MPP § 63-102.(u)(1).] The food stamp office or the household may not spot the mistake until later. The mistake could be in figuring out how many food stamps the household should get. The mistake could be that the food stamp office did not tell the household about an exclusion or deduction for which it qualified that would have increased the household’s benefit amount, such as special rules that apply to student aid. The mistake may result from a third party’s mistake or delay. [See, e.g., Gleim v. Commonwealth Dep’t of Pub. Welfare, 409 A.2d 951 (Pa. Commw. Ct. 1980) (Social Security Administration’s delay in beginning to pay disability benefits).] The mistake also could be in deciding that the household was not eligible for food stamps at all. The mistake may be that the food stamp office never gave the household’s application proper consideration. [See, e.g., Harris v. Kirby, 433 N.Y.S.2d 613 (App. Div. 1980).]  See, e.g., Lowry v. Obledo, 169 Cal. Rptr. 732 (Ct. App. 1980); Burch v. Prod, 153 Cal. Rptr. 751 (Ct. App. 1979) (discussing amount state must pay); Ross v. Superior Court of Sacramento County, 569 P.2d 727 (Cal. 1977); Gonzalez v. Department of Health and Rehab. Servs., 558 So. 2d 32 (Fla. Dist. Ct. App. 1989).

If the food stamp office underissued the household’s food stamps, the household has a right to get the food stamps that should have been paid. [7 U.S.C. § 2020(b), (e)(11); 7 C.F.R. § 273.17(a)(1); MPP § 63-802.1; 802.22.] A household can get back benefits when a disqualification due to an intentional program violation (IPV) is overturned. [7 C.F.R. § 273.17(a)(1); MPP § 63-802.112, 802.15.] (See the sections about overissuances and fraud for related information.)

When a court says that the food stamp office improperly denied food stamps to eligible households, the food stamp office should give the households the benefits they were denied, even if the court does not explicitly order it to do so. This only applies, of course, if the household requests the back food stamps within one year of when the underissuance took place. [7 U.S.C. § 2020(e)(11), 2023(b); MPP § 63-802.2; see Dunn v. Secretary of USDA, 921 F.2d 365 (1st Cir. 1990) (when restoration is required, it must be accomplished with food stamp coupons, not cash).]

Whenever the food stamp office discovers it gave fewer food stamps that it should have, the office must repay those food stamps to the household whether or not the household asks for them. [MPP § 63-802; 802.122; 7 C.F.R. § 273.17(a)(1)(i)-(ii), (b).]  Unfortunately, the food stamp office can only correct underissuances that occurred within one year prior to the date the error was discovered, or within one year of the date that the household requests correction of the underissuance. [Id.] (See further discussion below.)
The Food and Nutrition Service (FNS) discussed correction of underissuances as offsets to overissuances, and the one-year limitation on such corrections, in the preamble to the 2000 claims regulations, see 65 Fed.Reg. 41752, 41755 (July 6, 2000). The 12 months are those just before the food stamp office finds out about the mistake. Canfield v. Prod, 137 Cal. Rptr. 27 (Ct. App. 1977) (effect of 12-month limitation). See also . 7 U.S.C. § 2020(e) (11); 7 C.F.R. § 273.17(a)(1); MPP § 63-802.12.

Keep in mind the office might offset an underissuance against an overpayment. But the household can only get back 12 months worth of food stamps that it should have received. Therefore, whenever a household thinks there is a mistake, it should tell the food stamp office right away and ask for the back food stamps. (See note below, for additional authorities.)

Generally, these retroactive benefits are simply posted on the EBT card, after providing notice to the individual. If, however, the underissuance was from one county, and the person now lives in another, there are some technical difficulties: The new county can’t issue the benefits themselves, and the old county does not have a case to issue the benefits onto. There is an EBT information update that counties were provided (and reminded about) that informs the county owing the benefits how to have a new card printed in the new county.  (The benefits cannot be merged with the existing EBT card.)

A court can make the food stamp office report to advocates on actions it takes on households’ cases. [Anderson v. Lyng, 652 F.Supp. 1237 (M.D. Ala. 1987) (reporting when any households are denied under a particular rule).] A court also can make the food stamp office send households notices telling them that they may have received too few food stamps. [Wilson v. Lyng, 662 F.Supp. 1391 (E.D.N.C. 1987), rev’d on other grounds, 856 F.2d 630 (4th Cir. 1988); Gardebring v. Jenkins, 485 U.S. 415 (1988).]

When the food stamp office loses one case, it should take steps to help other recipients affected by the practice that was struck down. [See, e.g., Cash v. Califano, 469 F.Supp. 129 (W.D. Va. 1979), aff’d, 621 F.2d 626 (4th Cir. 1980).] Similarly, when a court orders USDA to apply different rules to one group of households, USDA should act to ensure that all other households in the same situation will receive benefits under the same rules. [7 U.S.C. § 2014(b); MPP §§ 63-409, 63-501.] If the food stamp office does not correct the mistake right away, ask for a fair hearing to rectify the situation.

A person can get back food stamps even after they leave food stamps. [7 C.F.R. § 273.17(a) (3); MPP § 63-802.13.] A household also has a right to back food stamps when a court says it got too few food stamps. [7 C.F.R. § 273.17(a)(2); 7 U.S.C. § 2023(b); MPP § 63-802.14; see also, Tambe v. Bowen, 839 F.2d 108 (2d Cir. 1988). Hurley v. Toia, 408 N.Y.S.2d 821 (App. Div. 1978); Craig v. Maher, 381 A.2d 531 (Comm. 1977) (household moved out of area); Cullen v. Karmer, 394 N.Y.S.2d 136 (1977).]

County welfare offices are supposed to correct any mistake that results in an underissuance as soon as it is discovered, even without the person having to ask for the mistake to be corrected. [7 C.F.R. § 273.17(b); MPP §63-802.3.] Sometimes, underissuances may be “offset” against overissuances. [7 C.F.R. § 273.18(g)(3). MPP §§ 63-801.313; 802.2; 802.54.] This means that the household may not receive any money back when the mistake is corrected, unless the overissuance was caused by agency error.

Example: Amy was underpaid $1,000 in food stamp benefits, but she owes the county $1,500 due to a different mistake she made two years ago. Amy will not receive any money to correct this underissuance, but her debt to the county will be reduced by $1,000 — leaving a balance of $500.

California forbids offsetting underissuances against agency error overissuances [MPP § 63-801.313 (Handbook)] and offsetting against the first benefits after application, even when paid late [MPP  § 63-802.541].

Example: Amy was underpaid $700 in food stamp benefits, but she owes the county $1,200 due to a different mistake the county made two years ago. Amy will get the full amount of $700 paid to her to correct this underissuance, since the overpayment was caused by the agency and these cannot be offset. She will still owe the $1,200 to the county.

Whenever an underissuance is restored, a notice must be sent informing the household of the underissuance, the amount of it, any offsets, and how benefits will be paid back. [7 C.F.R. § 273.17(b).] The notice must also include appeal and hearing rights.  [Id.]  (For related iinformation see the sections about notices and hearings.)

Additional authorities:West v. Bowen, 879 F.2d 1122 (3rd Cir. 1989) (precluding payment of retroactive food stamp benefits during time when SSA was determining if applicant was eligible for disability benefits is reasonable); Baum v. Madigan, 769 F.Supp. 249 (N.D. Ohio 1991) (relief due from improper treatment of utility reimbursement checks may accrue as of date of order approving relief plan); Atkins v. Parker, 472 U.S. 115 (1985); but see Cotton v. Mansour, 863 F.2d 1241 (6th Cir. 1988) (distinguishing between cases in which courts award only retroactive food stamps and those in which some prospective relief is granted, cert. denied, Cotton v. Babcock, 493 U.S. 1042 (1990); Baum v. Yeutter, 758 F.Supp. 423 (N.D. Ohio 1991) (11th Amendment bar to food stamp recipients getting retroactive award for allocations withheld due to administrator’s mistake).