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Issue Alert - 10-01-08

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Date: Jan 12, 2010
Program Area:

State Disability Assistance (SDA), Child Development and Care (CDC), Family Independence Program (FIP), and Food Assistance Program (FAP, also known as Food Stamps)
Issue Summary:

DHS is now recovering overpayments cause by Agency error if the overpayment is $125 or more, and the regular DHS caseworker is responsible for recoupment
Persons Affected:

Individuals who have been overpaid because of an agency error
For More Information:

Center for Civil Justice 320 S. Washington, 2nd Floor Saginaw, MI 48607 (989) 755-3120, (800)724-7441 Fax: (989) 755-3558 E-mail: info@ccj-mi.org

Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI 48104-3000 (734) 998-6100 (734) 998-9125 Fax
Background

The Department of Human Services (DHS) is required by federal law to recover Food Assistance Program overpayments even if they are caused by agency error, and the Department chooses to recover overpayments caused by agency error in other programs.

In the past, DHS did not pursue recovery of overpayments caused by agency error unless the overpayment was more than $500. 

What's Happening?

In January 2010, DHS issued an interim policy bulletin announcing that effective October 18, 2009 and retroactive to August 1, 2008, all over issuances of $10 or more would be recouped.  Shortly after the bulletin was issued, DHS decided not to recover overpayments that are less than $125. 

 

The new Bridges computer system automatically sends notices and begins recoupment in overpayment cases, once the caseworkers inputs information about the overpayment.  In cases where the overpayment is caused by a client error (or for Child care (CDC) and provider error), or by a possible Intentional Program Violation (fraud) by the client or the provider, the case is referred to a Recoupment Specialist.

 

The notices DHS sends to clients are very confusing and clients frequently do not understand what they are required to do.  DHS also sends a Repayment Agreement to clients when there has been an overpayment.  Clients should NOT sign a Repayment agreement without first getting legal advice.  In client or agency error cases, clients usually will be worse off if they sign a repayment agreement.  In cases involving possible intentional program violation (IPV or fraud), the repayment agreement also is an agreement to be disqualified from receiving benefits for a period of time.  Clients accused of IPV or fraud should not sign an agreement without getting legal advice unless they are certain they did commit an IPV or fraud.

In January 2010, DHS issued an interim policy bulletin announcing that effective October 18, 2009 and retroactive to August 1, 2008, all over issuances of $10 or more would be recouped.  Shortly after the bulletin was issued, DHS decided not to recover overpayments that are less than $125. 

 

The new Bridges computer system automatically sends notices and begins recoupment in overpayment cases, once the caseworkers inputs information about the overpayment.  In cases where the overpayment is caused by a client error (or for Child care (CDC) and provider error), or by a possible Intentional Program Violation (fraud) by the client or the provider, the case is referred to a Recoupment Specialist.

 

The notices DHS sends to clients are very confusing and clients frequently do not understand what they are required to do.  DHS also sends a Repayment Agreement to clients when there has been an overpayment.  Clients should NOT sign a Repayment agreement without first getting legal advice.  In client or agency error cases, clients usually will be worse off if they sign a repayment agreement.  In cases involving possible intentional program violation (IPV or fraud), the repayment agreement also is an agreement to be disqualified from receiving benefits for a period of time.  Clients accused of IPV or fraud should not sign an agreement without getting legal advice unless they are certain they did commit an IPV or fraud.

 

In general, if DHS intends to recoup the overpayment from the client’s current benefits, the client can prevent the recoupment from starting by requesting a hearing.  However, there are disadvantages to requesting a hearing and clients should NOT request a hearing unless they are very certain that they can prove they were not overpaid or that the amount of the overpayment has been calculated incorrectly.

 

 
What Should Advocates Do?

1.     Help clients get legal advice BEFORE they sign any repayment agreement.

2.     Do NOT advise clients to request a hearing about an overpayment unless it is certain the client will be able to prove he or she was NOT overpaid or that the overpayment amount was calculated incorrectly.

Advise clients to get legal advice before they go to any meeting regarding an Intentional Program Violation (IPV) or fraud.
What Should Clients Do?

1.      Do not sign any repayment agreement without getting legal advice.

2.      Do not request a hearing about an overpayment unless you are sure you can prove the amount of the overpayment is incorrect or you were not overpaid.

Seek legal help if you receive notice of an overpayment, and especially if you receive notice of a possible Intentional Program Violation (IPV or fraud).  
Finding Help

Most legal aid and legal services offices handle these types of cases, and they do not charge a fee.

You can locate various sources of legal and related services, including the free legal aid office that serves your county, at MichiganLegalAid.org.

You can also look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.
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