|CHANGES TO FOOD STAMP CLAIMS PROCEDURES|
| Effective October 1, 2004, changes are being made to the Food Stamp Claims policy and Claims Accounting and Restitution System (CARS) to increase the effectiveness of claims establishment. Establishing claims is a means to encourage food stamp applicants and recipients to provide correct information and to timely report required changes.
Revisions are being made to the claims establishment policy which strengthen the focus on program integrity and maximize agency resources. A small percentage of the total claims owed is collected each year. Of the amount collected, the amount the state retains and the amount that is sent back to USDA is:
The primary impact is realized in intentional program violations. Therefore, to more effectively manage the debt owed, and more efficiently utilize our staff resources, we have developed thresholds for referral and establishment of agency error and inadvertent household error claims.
This memorandum discusses the following changes in the way food stamp claims are determined and processed:
Revised disqualification policy is discussed in Memorandum IM-# 101, dated September 28 , 2004, and is related to this policy. Links are provided to assist staff.
After reviewing the cost of establishing and collecting claims compared to the dollar amount collected, the following thresholds are being set for establishing new claims. The variance in thresholds is due to increased collection activity required for closed cases. These thresholds are effective immediately for any food stamp discovery referral already registered in the discovery system, and for all future claim referrals.
Register and track all possible overpayments in the CARS discovery system. If it is determined the overpayment is under the threshold for establishing a claim, reject the claim referral using reason code 05 (Overpayment less than threshold). This allows another worker or reviewer to see that the claim has already been explored. Refer to CARS user guide REJECTING A FOOD STAMP DISCOVERY CLAIM REFERRAL.
Continue to establish all claims referred as a result of a Quality Control review, and all SPV/IPV referrals. If an overpayment was not discovered as a result of a Quality Control review do not establish a claim if the amount of the overpayment is equal to or less than the stated threshold:
Effective immediately the time frames or “look-back” periods for establishing food stamp claims have changed. It is important to register and track all possible overpayments in the CARS Discovery system. If it is determined the overpayment is not within the look-back period, reject the claim referral using reason code 01 (No overpayment). This allows another worker or reviewer to see that the claim has already been explored. Refer to CARS user guide REJECTING A FOOD STAMP DISCOVERY CLAIM REFERRAL.
Use these time frames when determining for what period of time a claim is established:
Currently all Inadvertent Household Error (IHE) claims are referred to the Welfare Investigation Unit (WIU) for possible investigation of intentional program violation. An overpayment is an Intentional Program Violation (IPV) if a member of the food stamp EU intentionally made a false or misleading statement, or misrepresented, concealed, or withheld facts. IPV can only be determined by a court, administrative hearing, or by the individual signing a Waiver of Administrative Hearing Disqualification Consent Agreement (IM-161).
A Suspected Program Violation (SPV) code is added to notify the Welfare Investigation Unit that the worker feels the claim is an intentional program violation.
Effective with this change, if the case situation indicates a claim may be an intentional program violation, the worker establishes the claim as an Inadvertent Household Error (IHE) and enters an SPV code in CARS. A report is sent to WIU of all SPV claims for investigation of intentional program violation.
The SPV question must be answered for all IHE and AE claims entered on the Add Claim (OVTC) screen. Enter “Y” (Yes) or “N” (No) in the SPV field when entering the information to establish all IHE food stamp claims. Enter “N” (No) in the SPV field when entering the information to establish agency error claims (cause codes 15 and 22).
Example: Mrs. D has been claiming her son as an EU member since her initial application three years ago. The worker discovers this month that Mrs. D’s son has never lived with her. The worker enters “Y” in the SPV field on the OVTA screen when adding information to establish the claim. CARS sends a report to WIU, referring the claim for investigation of intentional program violation.
After the claim is established, the SPV indicator displays on the Display Claim Information (OVCI) screen and Claims Summary (OVCS) screens.
The amount/balance of an Administrative Error or Inadvertent Household Error claim may be reduced (compromised). The demand letter advises the EU to contact the county FSD office if circumstances exist that affect the EU’s ability to repay the claim amount.
Do not compromise Suspected Program Violation or Intentional Program Violation claims. If it is later determined the SPV claim is not an intentional program violation, the claim may be compromised as an IHE claim if requested by the EU. The SPV indicator will remain Y on the OVCI screen. Record on the Note Add (OVNA) screen that the claim has been determined not to be an intentional program violation and, therefore, is eligible for compromise. Record the amount of the reason for and the amount of the compromise.
Claims are compromised for the following reasons:
A demonstration of need
An EU must prove an inability to repay a claim within a three-year period. An active food stamp EU meets this demonstration of need as the EU income meets Food Stamp Program eligibility. Supervisory approval of County Manager or above is needed to compromise a claim amount based on need. If the EU contacts FSD to request reduction of the claim based on need, and any responsible member of the claim receives food stamp benefits, compromise the claim.
To compromise the claim on need complete the following steps:
Example: An AE claim is established for $800. The EU is receiving food stamp benefits of $130 monthly and contacts the FSD office requesting reduction of the claim amount due to need. Recoupment for an AE claim is $10 or 10%, whichever is greater. Ten percent of $130 is $13 recoupment. Multiply the recoupment times 36 months to get the amount of the claim after compromise. $13 a month for 36 months is $468. Subtract $468 from $800 to arrive at the amount to be compromised. Reduce the claim balance to $468 by submitting a CARS-2 for $332 credit, transaction code 21. A County Manager or above must sign the CARS-2 before submitting to Division of Budget and Finance (DBF) for entry.
If a member of a closed food stamp EU requests reduction of a claim balance, follow instructions for a demonstration of hardship.
A demonstration of hardship
To meet a demonstration of hardship, an EU must prove that financial, physical, or mental hardship would exist if forced to pay. Such situation might include medical hardships, loan payments, etc. For situations where a hardship is being claimed, a summary of the information relevant to the compromise request is submitted to the Food Stamp Program and Policy unit. Program and Policy staff will make a decision after considering EU circumstances.
If any responsible member of a claim requests a claim amount be reduced because of a hardship, complete the CARS-8 REQUEST FOR REDUCTION OF CLAIM form and send to the Food Stamp Program and Policy Unit. The electronic CARS-8 will be added to available Word forms. A pdf version is attached to this memorandum.
The Food Stamp Program and Policy Unit reviews the information, makes a determination, and notifies the county office. The county office notifies the EU of the decision using an IM-112 (ACTION TAKEN ON YOUR FOOD STAMP CASE). Type the Claim ID under Case Number. In the space provided type the decision:Your request for reduction of this claim balance has been approved. The outstanding balance of this claim has been reduced to $$$$, orRecord the request and decision on the Note Add (OVNA) screen, and file a copy of the IM-112 in the claims section.
Court ordered restitution
All claims reduced or compromised by a decision made through the court will be considered a compromised claim. No further compromises (reductions) will be applied against any court restitution claim unless granted by further court action.
The CARS-7 FOOD STAMP CLAIM CHANGE form is now obsolete. Destroy all copies of the form and remove form the Forms Manual.
Food Stamp Manual 1142.000.00 FOOD STAMP CLAIMS DETERMINATIONS is being updated to include these changes and will be available upon completion.