Special Assistance SA-3300 Administration of checks and payments

VIII. OVERPAYMENTS FOR ONGOING RECIPIENTS

Each DSS establishes internal policies to determine who will calculate overpayments according to the following procedures. Overpayments can only be determined for ongoing SA recipients. (For changes during the application process and prior to disposition of the application, refer to SA-3110, Application Process and SA-3220, Budgeting).

A. Reasons for Overpayments

An overpayment occurs when the recipient received a payment for which he is not eligible due to:

1. Error in applying program regulations, or

2. A/r fails to report a change in situation timely, or

3. A/r provides false or incorrect information, or

4. A/r fails to report the receipt of an assistance payment greater than the authorized payment, or

5. A/r fails to report timely a move from an adult care home to independent living, or

6. A/r receives continued assistance during hearing process, and the hearing officer affirms the reduction or termination (Refer to SA-3340, Hearings).

B. Computing an Overpayment

1. Verify all changes according to the appropriate SA Manual section.

2. Determine and document the date the change occurred.

3. For changes involving a reported or unreported move to a private living situation:

a. Apply 5/10 day rule. Using a calendar, count 5 calendar days beginning the day following the date the change occurred and add 10 working days (Using the calendar below, this date is the 20^th).

b. Subtract the date established in VIII.B.3.a. above from the number of days in the month of overpayment (Using the calendar below, the calculation would be 31 - 20 = 11). This determines the number of days for which the overpayment was made.

c. Divide the recipient's monthly SA payment minus the $46 personal needs allowance by the number of days in the month to determine the per diem rate for that month.

d. Multiply the number of days of overpayment in VIII.B.3.b. above times the per diem rate to determine the amount of overpayment for the month.

e. If the recipient was not eligible for SA payment for any month, the overpayment is the full amount.

Refer to Example 1 below.

Note: The 5/10 day rule does not apply for changes involving a move from the SA facility to a higher level of care or when the recipient dies. In those situations, the recipient is entitled to the payment for the entire month of change if he was in the facility on the first day of the month. The facility is required by licensure rules to refund to the recipient or his estate the portion of the payment after his discharge or death.

4. For changes involving unreported income:

a. Verify date new income was received.

b. Apply 5/10 day rule. Using a calendar, count 5 calendar days beginning the day following the date the change occurred and add 10 working days (See calendar below for an example).

(1) If the 5/10 day rule ends in the same month in which change occurred, there is no overpayment because the recipient was eligible for the full amount on the first day of the month.

(2) If the 5/10 day rule ends in the next month after the change occurred, subtract the end date of the 5/10 rule from the number of days in the month, recoup overpayment for that number of days.

To calculate overpayment for partial month:

Determine the new SA amount.

(a) Subtract the new SA payment from the old SA payment.

(b) Divide the difference by the number of days in the month to determine the daily SA payment amount.

(c) Multiply the new SA daily payment amount times the number of days of recoupment.

Refer to Example 2 below.

5. For unreported changes resulting in excess resources:

a. Determine number of months the recipient was over the resource limit on first moment of the first day of the month.

b. The overpayment period begins the second month following month of receipt of excess resources.

NOTE: The month following the receipt of resource is not included in the overpayment period due to the notice requirement.

c. Recoup full SA payment for any subsequent months. Refer to Example 3 below.

6. For unreported death of recipient recoup the full SA payment for any month following the month in which death of recipient occurred.

EXAMPLES OF COMPUTING AN OVERPAYMENT:

MARCH AND APRIL
Sunday	Monday	Tuesday	Wednesday	Thursday	Friday	Saturday
1	2	3	4	5	6	7
8	9	10	11	12	13	14
15	16	17	18	19	20	21
22	23	24	25	26	27	28
29	30	31	1	2	3	4
5	6	7	8	9	10	11
12	13	14	15	16	17	18
19	20	21	22	23	24	25
26	27	28	29	30

Use the following calendar as a reference when referring to the examples below.

Example 1: Overpayment (Use March and April calendar above): Recipient doesn’t report moving from an SA facility to a Private Living Arrangement.

Ms. Smith was a resident of an ACH. Ms. Smith signed a contract with the ACH stating she would give a 14-day notice before leaving. She moved to a private living situation on March 25 without prior notice to the facility. Ms. Smith is entitled to a SA payment for 5 calendar days (5 days allowed to report change to IMC) plus 10 working days (10 days timely notice period) after the day she left. Using the calendar

above, Ms. Smith is eligible for a SA payment through April 13. She is responsible for making the payment to the ACH to cover the 14-day notice.

The change of living arrangement was not reported to the IMC until July 7. The remainder of April's SA check (April 14 through 30) must be returned to the county DSS. The full amount of May and June SA checks must be returned to the county DSS.

Outcome:

Ms. Smith has no disregarded income or excess resources. She signs a statement agreeing to pay back the overpayment should she acquire any extra money in the future. If repayment is not voluntarily submitted, refer to SA-3410, Recipient Fraud.

Example 2: Overpayment (Use March and April calendar above): Unreported earned income.

Mr. Jones receives RSDI in the amount of $720 per month. When he was approved for SA on February 14^th, he stated RSDI was his only income. His SA payment was determined to be $528 per month, based on current basic SA Basic rate of $1,182 and personal needs allowance of $46. He was in the facility on the first day of February and met all other SA eligibility requirements, so he was authorized for the entire month.

RSDI	$720.00
General Unearned Income Exclusion	- 20.00
Total Countable Monthly Income (TCMI)	$700.00
SA Basic Maintenance	$ 1,228.00
Minus TCMI	- 700.00
SA Basic Payment	$528.00

On May 5 Mr. Jones notified the county DSS that he began working in March and received his first paycheck March 20. Mr. Jones’ gross earned income was determined as $200 per month. IRWE is 0.

See the earned income calculation below.

Earned Income Calculation:

Gross earned income	$ 200.00
Earned Income Exclusion	- 65.00
Divided by Two	÷ 2 $ 135.00
Minus One Half the Remainder	- $ 67.50
Equal Countable Earned Income	$ 67.50

Calculating the New SA Basic payment:

See the new SA Basic payment calculation below.

New SA Basic Payment Calculation:

RSDI	$720.00
General Unearned Income Exclusion	- 20.00
Countable Unearned Income	$700.00
Plus Countable Earned Income	+ 67.50
Total Countable Monthly Income (TCMI)	$767.50
SA Basic Maintenance	$ 1,228.00
Minus TCMI	$767.50
SA Basic Payment	$460.50
New SA Basic Payment	$461.00

Counting $67.50 net countable earned income and $720 unearned income minus the $20 general income exclusion results in SA payment of $460.50 rounded to $461.00 per month for April and May.

Calculating the overpayment:

Mr. Jones began working and received his first paycheck on March 20. Considering the five calendar day reporting requirement, plus the 10 workday timely notice, the 5/10 rule ends April 8. The overpayment period and overpayment amount are computed as follows:

SA Basic Overpayment Calculation:

Old SA payment	$528.00
New SA payment	- $461.00
Overpayment for April	67.00
Number of Days in April	30
5/10 Rule Ends April 8th - Subtract 8 days	- 8
Remaining Days in April	= 22
Number of Days Overpaid in April (April 9-30)	22
Full month overpayment	$ 67.00
Number of days in month of April	÷ 30
Daily overpayment amount	$ 2.23
Number of days of recoupment	x 22
Overpayment for April	$ 49.06
Overpayment for May (full amount)	$ 67.00
Overpayment for April (partial month)	+ 49.06
Total Overpayment	$116.06
Total Overpayment (rounded)	$116.00

The DSS-8110, Termination or Modification of Public Assistance was issued to Mr. Jones notifying him of reduction of his SA payment effective June. It explained that the $116.00 overpayment must be paid to the county DSS.

Outcome A: Mr. Jones has $200.00 in his checking account as reserve. He voluntarily repays $49 for April and $67 for May.

Outcome B: If Mr. Jones does not return the $116 ($49 overpayment for April and $67 overpayment for May), then his future checks must be adjusted. Mr. Jones has disregarded income.

Because Mr. Jones has disregarded income, the SA payment may be reduced up to 10% of payment amount. His new payment is $461.00 and 10% of that is $46.10. Only up to 10% of the SA payment can be recouped. Therefore the recoupment can only be $46.00 per month. Assuming no other changes, Mr. Jones should receive $415 ($461.00 - $46.00) for June and July and $415.00 ($461.00-$34.00) for August. Beginning in September, his continuing payment would be $461.00 monthly.

Example 3: Overpayment: Exceeding the Resource Limit

Mr. Brown is a recipient of SA and resides in an ACH. Mr. Brown receives his full SA payment on March 1. On March 6, he received an inheritance check and did not report this to the county DSS. On June 10, the IMC discovered a receipt of inheritance and verified he still had it on hand the first day of April, May and June. Issue a DSS-8110, Termination or Modification of Public Assistance effective June 30. Recoup full SA payment for April, May and June

C. Collecting an Overpayment

1. Recipient Responsible Overpayments

The collection of recipient responsible overpayments for SAA and SAD cases remains the responsibility of the legal county of residence. Ask recipient to refund the overpayment voluntarily. Refer to Example 2, Outcome A in VIII.B.6., above.

a. If recipient refuses to refund overpayment, reduce SA payment up to 10% of the payment amount if there is disregarded income or reserve up to the amount to be recouped. Refer to Example 1, Outcome in VIII.B.6, above.

b. If there is no disregarded income or reserve, ask the recipient to sign an agreement to repay if resources are acquired in the future. Refer to Example 2, Outcome A in VIII.B. above.

(1) Repayment agreements must contain, at a minimum

(a) Amount of the overpayment

(b) Repayment schedule

(2) Provide recipient with a dated copy of the repayment agreement and file a copy in the record.

2. County Responsible Overpayments

a. If an overpayment occurs because of a county office error in applying program regulations, the overpayment will be charged to the county.

b. When an overpayment occurs because of a county error in processing the check, recoup the overpayment from the recipient only if the recipient was properly notified of the correct amount he/she was eligible to receive. Refer to notice requirements in SA-3330, Notices.

c. For all county responsible SA overpayments, complete a DSS-8201, County Responsible Overpayment form, and submit the form to the address below:

DHHS Controller’s Office

Program Benefit Payments Section

2019 Mail Service Center

Raleigh, NC 27699-2019

When completing the DSS-8201, fill in the full amount (state and county portion) of the SA overpayment in the “Amount” column. The county share of the overpayment will be adjusted and will reflect on the Public Assistance Adjustment Register (adjustment code 20) that the State will recoup its 50% share of the state/county payment. A copy of the Public Assistance Adjustment Register and a notification adjustment letter is provided to the county DSS director.

3. State Responsible Overpayments

a. If an overpayment occurs because of a State office error in interpreting program regulations, the overpayment will be charged to the State.

b. If an overpayment occurs because of a State office error in processing the check, and the recipient has received notification of the correct amount, collect overpayment from the recipient.

4. Refunding Overpayments

a. SA Checks That Have Been Cashed

(1) Complete DSS-1656, Refund Receipt, when a refund of an overpayment is made either by cash or personal check. Refer to EIS-3250, Processing Cash Overpayment Collections.

(2) Deposit overpayment refund into DSS account.

(3) Prepare county DSS check in the amount of refund and submit DSS-1656, Refund Receipt with check to Program Benefits Payment Section at the address below for cancellation and financial adjustment for the county DSS.

Program Benefits Payment Section
2019 Mail Service Center
Raleigh, NC 27699-2109

b. SA Checks That Have Not Been Cashed

NOTE: Do not complete DSS-1656, Refund Receipt if the original check is returned, even if the check has been endorsed.

(1) To return the SA check:

(a) Mark "VOID" on signature of returned check. Do not mark over printed information on the check.

(b) Issue recipient a receipt.

(c) Send voided check to Program Benefits Payment Section for cancellation and financial adjustment.

Program Benefits Payment Section
2019 Mail Service Center
Raleigh, NC 27699-2019

(2) Verify cancellation of check by reviewing monthly Adjustment Register.

NOTE: If fraud is suspected, refer to SA-3410, Recipient Fraud.