County offices must initiate a claim against any household which has received food stamps to which it was not entitled. Such an occurrence is called an "Overissuance" or an "Overpayment". In this section of policy, the term "overpayment" will be used to refer to claims established against households.

This section of policy covers:

1. When and how to prepare an overpayment;
2. Submitting the overpayment to the Overpayment Unit; and
3. The Overpayment Unit's responsibilities, including collection of the amount owed.

In addition, the provisions under which an Overpayment will be collected through a state income tax interception are covered.

The State will initiate or pursue collections only of food stamp benefits paid as a result of improper issuance, or overissuance, and will not initiate or pursue collections of properly issued benefits, or collection of benefits in a manner contrary to federal law or regulation.

The county office will prepare an overpayment claim on any household which received an overissuance of food stamps within the last 36 months. An overpayment must be prepared no matter how small the overissuance. If more than 36 months have elapsed between the month the overissuance occurred and the month of discovery, no overpayment claim will be prepared.

All adult household members will be jointly and severally liable for the value of any overissuance of food stamps to the household. County offices will establish an overpayment claim against:

1. any household that has received more food stamp benefits than it was entitled to receive; or
2. any household which contains an adult member who was an adult member of another household when that household received more food stamp benefits than it was entitled to receive.

See [FSC 15531] for additional instructions.

The following actions will be completed to determine the total amount of the overpayment:

Step 1 Determine the Initial Month of Overissuance

The initial month of overissuance is the first month in the overpayment period:

If the overissuance resulted from the household giving incorrect or incomplete information at the time of application (initial or recertification), the initial month of overissuance is the first month of the certification period assigned at application approval.

Example - A household submitted an application on September 12. The husband's earnings were reported on the application but the wife's earnings were not reported. The application was approved on October 21 based only on the husband's earnings. Retroactive prorated benefits were authorized for September. At the time of the wage match for the quarter ending September, it was discovered that the wife was employed at the time the application was submitted and had been working for several months. The initial month of overissuance will be September.

For Occasional Reporters, as defined in [FSC 11350], if the household fails to timely report one of the changes specified in [FSC 11200], the initial month of overissuance will be established by determining the effective date of the change and adding 20 days. For example, if the effective date of change is established as June 6th, the caseworker will begin with June 7th and count 20 days. The 20th day falls before the end of June (June 26th) so the initial month of overissuance is July. (No overpayment will be prepared if the overissuance resulted from a change other than those listed in [FSC 11200].) If there is more than one unreported change during the overpayment period, the effective date of each change will be established in the same manner.

The effective date of the change is defined as the day upon which an identifiable change actually occurred. Some examples of the effective day of change are given below.

SITUATION	EFFECTIVE DATE
Went to work	First day of employment.
Change in household composition	Date member actually entered or left household.
Received entitlement check	Date 1st check issued to household as verified by issuing agency.
Received unemployment	Date first check issued to household as verified by WESD screen.

Example - A household failed to report that the wife went to work in September until the household's recertification interview in December. The caseworker established that the wife's first day of employment was September 11. The 20th day is October 1. The initial month of overissuance will be November.

Quarterly reporting households, as defined in [FSC 11340], are only required to report changes on the quarterly report form. The initial month of the overissuance will be the first month following the submission of the quarterly report on which the changed should have been reported.

Step 2 Exclude Any Months More Than 36 Months Prior to the Month in Which the Overissuance was Discovered

Step 3 Determine the Household's Correct Allotment for Each Month of the Overpayment Period

The household's correct allotment will be calculated using the household's income, resources, expenses, household composition, etc. for the same month. See [FSC 7512].

NOTE: Weekly and bi-weekly income and/or expenses will not be converted when a budget is calculated.

If verification of the monthly income is not available, the best source of available verification may be used to prepare the overpayment. For example, the quarterly wages appearing on the Wage Match may be used to prepare an overpayment if the individual's employment is verified, but verification of monthly wages cannot be obtained.

Documentation of all verification obtained must appear in the case record. If actual monthly income cannot be established, documentation of all attempts to obtain verification of the actual monthly income must appear.

Use the standards (e.g. - utility standard, standard deduction, earned income deduction) and issuance charts in effect during the overpayment period. If a change in a standard occurs during the overpayment period, the overpayment budgets must reflect this change. The tapes or forms upon which the overpayment budgets were prepared must be clearly labeled and must remain in the case record as documentation.

Step 4 If Necessary, Complete a Second Series of Budgets in Which the Earned Income Deduction is Not Allowed

The earned income deduction will not be allowed for any portion of earned income which a household failed to report timely.

The budget will be prepared in the same manner as any other budget except that the earned income deduction will not be allowed for that portion of the earned income which the household failed to report. For example, if a household had reported the husband's income but failed to report the wife's income, the earned income deduction will be allowed for the husband's earnings but not for the wife's.

The earned income disallowance will only be effective for any months in the overpayment period during which the county was not aware of the earnings. For example, a county becomes aware of a household's earned income in July but does not adjust the case to include the earnings until December. The earned income disallowance will cease in July. The earned income deduction will be allowed when the overpayment budgets for the months August through December are prepared.

Step 5 Complete an DCO-216 (Report of Food Coupon Overissuance)

Calculate the total overpayment as instructed on the EMS-216.

NOTE: If the household should become entitled to restored benefits while the overpayment is being prepared, the amount to be restored will offset. See [FSC 13320] for instructions.

Step 6 Enter the Overpayment in the Overpayment Record in the County Office

Any record must contain the following information.

• Name

• Case Number

• Date overpayment was discovered

• Month, day and year overpayment started

• Date referred to the Overpayment Unit

• Suspected claim type

Other information may be added if desired by the county office. Records may be manual or maintained on a personal computer (PC) based system.

When an overpayment occurs on a case in which a member participated in workfare during the overpayment period, the worker must determine if the household is entitled to an offset on the overpayment.

If a household which has been overissued benefits while participating in workfare remains eligible for participation in workfare, the county office worker must take the following steps.

1. Establish a claim for the entire amount of overissuance.
2. Give credit to the household for all extra hours of work performed during month of overissuance. Apply these hours to future work obligations.
3. To determine the number of hours a participant has actually worked, the worker should contact the workfare sponsor.
4. Notify the workfare sponsor via DCO-209 of the household's entitlement.
5. Complete the DCO-216 and DCO-217 as instructed in [FSC 15400].

If a household has been overissued benefits while a member was participating in workfare, a different procedure will be used. This procedure is outlined below.

Step 1 Determine the household's correct allotment for each month of the overpayment period. Use [FSC 15400]. Enter the corrected allotment on the DCO-216 in column 2 a.

Step 2 Determine the household's correct obligation by dividing the household's correct allotment by the current Federal minimum wage. For workfare households, see [FSC 3730] for the maximum obligation.

Step 3 Determine the number of hours actually participated. The workfare sponsor must furnish this information.

Step 4 If additional hours were worked due to the overissuance, subtract the household's correct obligation from the number of hours the household actually worked. The result will be the extra hours worked.

Step 5 Determine the offset amount by multiplying the extra hours worked by the current Federal minimum wage. Enter the offset amount.

The status of the case as "non-fraud" or as "non-fraud-pending fraud determination" will be determined using the DCO-217. When cases are referred in a non-fraud status, the offset will be allowed when the total overpayment amount is entered. When the case is referred in a pending-fraud determination status, the offset must appear on the form but will not be reflected in the overpayment. The offset amount will be used by the Overpayments Unit to adjust the Overpayment if the household is found not to have committed an intentional program violation through a court of law or an administrative disqualification hearing.

Categorical eligibility cannot be rescinded retroactively.

As long as everyone in the household received AFDC (TEA) or SSI during a given time, the household would be considered to be properly eligible for food stamps even if its AFDC (TEA) or SSI eligibility was subsequently determined improper.

No overpayment will be prepared when excess household resources caused the household to be subsequently found ineligible for AFDC (TEA) or SSI benefits. However, an overpayment will be prepared if the AFDC (TEA) or SSI eligibility was improper due to unreported income or changes in household size and an overissuance of food stamp benefits occurred.

For example, a food stamp household is made up of an TEA recipient and her children, all of whom are included in the TEA grant. She goes to work but does not report this income. To determine the food stamp overpayment, the worker will include both the TEA grant received by the household and the unreported earned income.

In some cases, the additional income will result in a zero allotment. Even though the household would still have been categorically eligible, it would have been entitled to zero benefits. In these instances, the overpayment will be equal to the entire allotment issued to the household. (NOTE: In the case of one and two person households, the minimum benefit rules will apply. See [FSC 8630].)

When a household's AFDC (TEA) or SSI ineligibility is related to the discovery of an unreported household member who was not either an AFDC (TEA) or SSI recipient, an overpayment may be prepared if an overissuance has occurred as a result. The overissuance amount will be the difference between the allotment the household received and the allotment the household should have received as an NA household had the additional household member been properly reported and included in the food stamp budget.

Overpayments will also occur when an otherwise ineligible household loses its categorical eligibility due to changes in income or household size but continues to participate in the program.

Overpayments prepared for categorically eligible households will be classified as an administrative error, inadvertent household error or IPV according to the guidelines which appear in [FSC 15410].

The three types of overpayment claim referrals are:

1. Inadvertent household error,
2. Administrative error, or
3. Intentional program violation.

A definition of each type of claim follows:

Inadvertent Household Error - An overpayment caused by a misunderstanding or an error on the part of the household. An inadvertent household error which results in an overpayment includes, but is not limited to, the following:

1. The household unintentionally failed to provide the county office with correct information;
2. The household unintentionally failed to report to the county office changes in household circumstances; or
3. The household unintentionally received an overissuance of food stamp benefits, because it requested a continuation of benefits pending an administrative hearing decision.

Administrative Error - An overpayment caused by the agency or by the agency's failure to take action. An administrative error results in an overpayment when:

1. The county office failed to take timely action on a change reported by the household;
2. The agency incorrectly computed the household income or deductions, or otherwise assigned an incorrect benefit amount;
3. A household received food stamp benefits to which it was not entitled due to a worker or system error;
4. The household continued to receive food stamp benefits after its certification period had expired without a reapplication determination; or
5. The county office failed to reduce a household's food stamp benefits after its TEA (AFDC prior to 7-1-97) grant increased.

An overpayment will not be prepared when the county office failed to insure that the household signed the application form.

Intentional Program Violation (IPV) - An overpayment caused by an individual household member when the member intentionally:

• Made false or misleading statements (for example, the household falsified statements on the application);

• Misrepresented, concealed or withheld facts (for example, the household did not report a change in a timely manner although the household was aware of the reporting requirements); or

• Violated the Food Stamp Act, the Federal Regulations, or State Statutes relating to the Food Stamp Program. (See [FSC 16700] for a full explanation of an Intentional Program Violation.)

An IPV must be determined through:

1. An Administrative Disqualification Hearing;
2. A Court of Law with appropriate jurisdiction;
3. The accused member signing a Waiver of the Disqualification Hearing (DCO-257); or
4. The accused member signing a consent agreement with the prosecuting attorney.

Until one of the above actions occurs, suspected IPVs will be handled as inadvertent household errors.

A Summary of Circumstances and/or Fraud (DCO-217) will be completed on each overpayment. On the DCO-217, the county office worker must briefly explain why fraud is suspected or why it is not suspected. All pertinent dates and supporting information will be included in the explanation.

15430 Review and Submission of the Overpayment

The Report of Food Stamp Overpayment (DCO-216) and DCO-217 will be reviewed by the Economic Services Supervisor or designee for accuracy. If the overpayment is valid, the supervisor or designee will sign the DCO-216 and forward both the DCO-216 and DCO-217 to the Overpayment Unit. A Suspected Fraud Report (DHS-1700) must also be completed and forwarded with the DCO-216 and DCO-217 when the claim is submitted as a non-fraud pending fraud determination.

If a intentional program violation is suspected by the county office but no claim can be established, only the DHS-1700 will be submitted to the Overpayment Unit. If the Fraud Unit does not find sufficient evidence to prosecute but does find that an overpayment exists, the information will be sent to the county for use in completing the DCO-216 and DCO-217.

The county will complete and submit a Report of Restored Benefits (DCO-201) if the overpayment is used to offset restored benefits owed to the household. Copies of the DCO-216, DCO-217 and (if applicable) the DHS-1700 and/or DCO-201 will be retained and filed in the Overpayment Section of the case record. The Overpayment Section of the Face Sheet (DCO-275), will be completed.

All claim documents must be retained for six years or until the claim is paid in full, whichever occurs earlier.

The Overpayment Unit will maintain a record showing the circumstances which resulted in each overpayment, the procedures and methods used to calculate the overpayment, and any circumstances which resulted in suspension or termination of collection action. The Overpayment Unit will also monitor claim payments and identify situations where an amount not yet restored to a household can be used to offset an overpayment owed by the household. The Overpayment Unit will identify households that have failed to make installment payments on their overpayment. 

Upon receipt, the Overpayment Unit will review the Report of Food Stamp Overpayment (DCO-216) and Summary of Circumstances and/or Fraud (DCO-217) to determine if the information necessary to process an overpayment claim is contained in the documents. If the claim report is accurate and all information and calculations are correct, the Overpayment Unit will take the following actions:

1. Prepare and forward a DHS-11 to Overpayment Accounting; and
2. Send a Demand Letter and Repayment Notice to the household (with a copy to the county office) unless prosecution is pending on the claim. See [FSC 15620] for actions taken on claims where prosecution is pending.

If additional information is required to complete the claim, the county office submitting the DCO-216 and DCO-217 will be requested to provide the additional necessary information.

If the requested information is not received from the county office within 30 days, one of the following actions will be taken:

1. Depending upon the specific claim circumstances, a second request for the information may be made to the county office.
2. If sufficient information is available to process any portion of the claim, then one will be processed for the period and/or amount that can be substantiated with the available information. The county office will be notified and advised that if the requested information is received, the claim will be adjusted accordingly.
3. If there is not sufficient information to verify and establish an overpayment claim for any period or amount, the claim report (DCO-216 & DCO-217) will be administratively closed. The county office will be notified and advised that if the requested information is received in the Overpayment Unit, the claim will be re-opened and processed in accordance with the Overpayment Unit's standard procedures.

15531 Initiating Collection

Collection action will be initiated by sending a Demand Letter and Repayment Notice to the customer (claim debtor). The Demand Letter will inform the customer about the overpayment, the amount, time period, the reason it occurred, and the customer's right to an administrative hearing and how to request one. The Repayment Notice will inform the customer how the overpayment is to be repaid.

Customers who are certified for food stamp benefits will be entered into recoupment for repayment of the debt. Individuals not certified for food stamp benefits will be required to make monthly restitution through direct payment unless they can repay the debt in full.

The Overpayment Unit will initiate collection action against the individual identified as the casehead on the DCO-216 and DCO-217. However, every adult who was a member of the household during the overpayment period has liability for the debt. Therefore, if a change in household membership occurs, the Overpayment Unit may pursue collection action against any household with a member who was an adult member of the household that received the overissuance. The county office may offset restored benefits by the amount of the overpayment when restored benefits are owed to any household containing a member who was an adult member of the household that received the overissuance. See [FSC 13320] for instructions on offsetting claims. Under no circumstances may the Overpayment Unit collect more than the amount of the claim.

The county office must send a copy of the Food Stamp Authorization Document (DCO-233) to the Overpayment Unit when the head of household changes on a case with an overpayment.

There are two different payment schedules for two different sets of circumstances. They are:

1. A payment schedule for recoupment of food stamp benefits which is established by policy in section 15700; and
2. A payment schedule for restitution (direct payment made by the customer) in the form of cash, check, or money order. The restitution schedule is based upon the amount of the overpayment. The schedule is listed below:

Overpayment Amount	Monthly Payment Amount
$       1.00 to   100.00	$ 10.00
101.00 to   300.00	15.00
301.00 to   500.00	20.00
501.00 to   800.00	25.00
801.00 to 1000.00	30.00
1001.00 to 1500.00	35.00
1501.00 to 2000.00	40.00
2001.00 to 2500.00	45.00
2501.00 and above	50.00

The payment schedule will remain in effect until changed by the Overpayment Unit. The customer may contact the Overpayment Unit and request a change in the repayment schedule at any time. If the Overpayment Unit staff determines there is sufficient reason or that there is a legitimate financial hardship for the customer, the repayment schedule may be changed.

If a customer fails to repay a food stamp overpayment debt or fails to make monthly payments as required in the repayment schedule, the Overpayment Unit will determine if the customer is certified for food stamp benefits under their own case number or as a member of another household. If the customer is certified for food stamp benefits, the household in which the customer is receiving such benefits will be set up for recoupment. Recoupment will be at the rate established by Federal regulations.

If the customer is not currently certified for food stamp benefits, the Overpayment Unit will determine the appropriate action and pursue it accordingly.

Efforts to collect an overpayment may be suspended under any of the following circumstances:

1. The claim is less than $35.00, or the combined amount of all the open claims is less than $35.00, and the customer/debtor is not currently certified for food stamp benefits.
2. The customer/debtor has requested an administrative hearing regarding the matter of the overpayment in question. Collection will be suspended until a decision has been reached concerning the validity of the claim.
3. The current address of the customer/debtor is unknown.
4. The customer/debtor has filed for bankruptcy and the overpayment debt is listed in the proceedings; or the debt has been discharged by the bankruptcy court. Discharged claims will be processed for abatement. Claims "Dismissed" by the bankruptcy court will be reentered into the collection process.
5. The cost of continued collection action is determined to be greater than the amount to be recovered.
6. The claim debt has been overturned by an administrative hearing decision or by court action.
7. The customer/debtor is in prison, or is otherwise incapacitated and unable to attend to his/her personal needs.
8. The customer/debtor is deceased. If no other adult is found to have liability for the debt, the claim will be processed for abatement.

Claims suspended for three years will be reviewed to determine if they can be collected. If the claim is determined to be uncollectable, it will be processed for abatement.

Until an IPV has been determined through one of the procedures specified in [FSC 16700], the overpayment will be handled as an inadvertent household error. If an administrative disqualification hearing is declined by the Appeals and Hearings Section or if the individual is found innocent of the charge through the hearing, the overpayment is handled as an inadvertent household error. This is also true if a court of law finds the individual innocent of an IPV.

When the Overpayment Unit receives the DCO-216, DCO-217 and DHS-1700, the case will be logged, batched and forwarded to the Fraud Unit. The Overpayment Unit will track all cases referred to the Fraud Unit and take appropriate action based upon the Fraud Unit's decision to accept or to decline prosecution.

Cash, money orders or cashiers checks may be accepted as partial or full payment of an overpayment. All cash payments must be properly documented and receipted via the Receipt For Food Coupons and/or Money Received (DCO-273). See the Department of Human Services Administrative Procedures Manual, chapter 201, for additional information.

EBT food stamp benefits may be used to repay an overpayment debt. The customer must authorize the Overpayment Unit, in writing, to withdraw benefits from the customer's EBT account. The authorization must include the customer's name, social security number and the amount authorized to be withdrawn from the account.

Before accepting food stamp benefits as a payment on an overpayment, the county office must verify that an overpayment exists. The overpayment may be one that has previously been submitted to the Overpayment Unit by a DCO-216 and DCO-217 or one that exits but has not been submitted. Each type of transaction is handled differently.

A valid overpayment does not exist until a claim has been entered into the Recipient Overpayment Accounting System (ROAS) as a STATUS 1, 3, or 7. However, for the purpose of this policy section, when the county office has submitted an overpayment claim by DCO-216 and DCO-217 and afterward accepts food stamps on such a claim, the following actions should be taken:

1. Void all loose food stamps or partial books or signed books accepted as repayment.
2. Prepare a Receipt for Food Coupons and/or Money (DCO-273).
3. Give a copy of the DCO-273 to the household.
4. Mail the food stamps and the original DCO-273 by certified mail, return receipt requested, to Food Stamp Accounting, P. O. Box 1437, Little Rock, Arkansas 72203.
5. File a copy of the DCO-273 in the "Overpayments" section of the case record.

NOTE: To void food stamps, each food stamp coupon must be clearly marked or stamped with the word "VOID".

If the DCO-216 and DCO-217 have not been submitted to the Overpayment Unit but an overpayment exists, the overpayment is considered a "new overpayment". When accepting food stamps as payment on a new overpayment, the following actions must be completed:

1. Void all loose food stamps or partial books or signed books accepted as repayment.

2. Prepare an DCO-273.

3. Give a copy of the DCO-273 to the household.

4. Mail the food stamps, the original DCO-273, the DCO-216, the DCO-217, and the DHS-1700 (if applicable) by certified mail, return receipt requested, to Food Stamp Accounting at the address given above.

5. File copies of all documents in the "Overpayments" section of the case record.

In no instance will food stamps intended for payment on an overpayment be mailed to the Overpayment Unit or Food Stamp Accounting in advance of the required forms. If the required forms cannot be prepared immediately, void all food stamps (including full books) and hold them in a secure place in the county office until the DCO-216 and DCO-217 are ready for submission. (The DCO-273 must be completed at the time the household returns the food stamps to the county office.)

NOTE: Food Stamp benefits are to be issued via Electronic Benefits Transfer (EBT) Statewide effective April 1998.

If a household receives a food stamp allotment to which it is not entitled, an overpayment can be prevented by returning the full allotment, intact and unaltered to the county office during the month the allotment was issued.

If an allotment has been altered, a DCO-216 and DCO-217 must be completed and submitted to Food Stamp Accounting with the allotment. All loose coupons, altered books or incomplete books in the allotment must be voided.

Altered allotments received by Food Stamp Accounting without an accompanying DCO-216 and DCO-217 will be voided and returned to the county office. The county office will complete the required forms and return the allotment to Food Stamp Accounting.

NOTE: Food Stamp benefits are to be issued via Electronic Benefit Transfer (EBT) Statewide effective April 1998.

Act 372 of 1983 as amended (Ark. Stats. Ann. S 84-4901 thru 84-4918), Act 987 of 1985 and Act 1154 of 1991 authorizes the collection of food stamp benefits overpayments through the interception of State Income Tax Refunds.

The Division of Administrative Services will submit a list of households with an overpayment debt to the Department of Finance and Administration. The list will be certified as meeting the requirements established by Act 372, Act 987 and Act 1154 by the Overpayment Unit of the Division of Administrative Services.

Act 987 requires prenotification of households who owe a debt to the State before this information is furnished to the Revenue Division of the Department of Finance and Administration. A computer generated notice (FM 1594) of DHS' intention to intercept refunds will be mailed on or before December 1 of each year on cases that have overpayment debts listed.

The taxpayer has 30 days from the date the notice was mailed to file a written request for a hearing. If no hearing is requested within 30 days, the refund will be intercepted and mailed to the Division of Administrative Services to be allocated within the Department of Human Services in order of priority.

In order for a case to be submitted for State Tax Refund Intercept, the following conditions must be met:

• The amount owed the State must be approved by the Overpayment Unit.

• The taxpayer must have been notified of the overpayment in at least one demand letter.

• Claims certified for Federal Income Tax Intercept will not be certified for State Income Tax Intercept.

• The overpayment must be at least $20.00.

If the State Tax Refund due a taxpayer is less than $20.00, the Revenue Department will not intercept the refund.

A State Tax Refund intercepted to apply against debts to the State is normally allocated according to the following guidelines:

• Current Court Ordered Fraud Conviction Overpayment Claims have first priority. Any balance remaining will be applied to any other Overpayment Claims.

• When only one overpayment claim exists, the refund will be applied against that claim. Should the refund be larger than the claim, the balance will be returned to the taxpayer by the Revenue Department.

• When more than one claim exists with the Food Stamp, AFDC, TEA and Medicaid Programs, the refund will be applied against the oldest claim first until the entire amount is used or all claims are paid. Any balance after these claims are satisfied will be allocated to other DHS claims or will be returned to the taxpayer.

Public Law 104-134, the Debt Collection Improvement Act (DCIA) of 1996 authorizes the Department of the Treasury to be the primary federal collection agent for the collection of delinquent food stamp debts. As such, Treasury now has the responsibility for operating the Federal Tax Refund Offset Program (FTROP), the Federal Salary Offset Program (FSOP), and actions will be made to the Treasury Offset Program (TOP).

Federal Tax Refund Offset is the reduction (offset) of a delinquent food stamp debtor's federal income tax refund by the amount of the delinquent food stamp debt and applying such amount reduced (offset) against the delinquent food stamp debt.

Federal Salary Offset is the reduction in salary of a federal employee who owes, and is delinquent in repayment of, a food stamp overpayment debt and crediting such amount to the delinquent debt.

Administrative Offset is the withholding of funds payable by the federal government to an individual owing a delinquent food stamp debt and crediting such funds withheld to the delinquent debt.

The Arkansas Department of Human Services has signed a letter of agreement with USDA-Food and Consumer Service (FCS) to participate in the Treasury Offset Program by certifying the name and social security number of individuals having a delinquent food stamp debt to FCS in accordance with applicable rules and regulations.

The Accounts Receivable Overpayment Unit of the Division of Administrative Services has the responsibility for certifying delinquent debts to Food and Consumer Service for the purpose of offsetting monies owed by debtors through the Treasury Offset Program (TOP).

Food stamp overpayments submitted for offset must be past due and legally enforceable. A claim is determined to be past due and legally enforceable after establishment of the claim and making reasonable efforts to collect the claim as required in Sections 15100-15800 of the Food Stamp Certification Manual and must additionally meet the following criteria:

1. The claim type is either an inadvertent error claim or an intentional program violation.
2. The claim amount is at least $25 (may be a cumulative amount).
3. The individual owing the debt is not making regular payments against the debt or otherwise complying with the repayment schedule established by the Overpayment Unit. "Regular payments" means the individual has missed no more than one monthly payment (or an amount equal to one monthly payment) within the most recent twelve month period. If the claim is less than twelve months old the individual must have missed no more than one monthly payment (or an amount equal to one monthly payment) since the claim was established. If the individual debtor has missed more than the allowed one monthly payment (or a amount equal to one monthly payment) the claim will be certified for federal tax offset.

Once a claim has been correctly certified to the federal certification center, the debtor does not have the option of "making up" a missed monthly payment and thereby having the debt deleted from the certification file.

4. The claim must be submitted in the name of only one individual or must be reduced by any amount submitted as a separate claim for other individuals who are jointly and severally liable for the claim.
5. The claim must not be involved in a bankruptcy stay or discharged in bankruptcy.
6. The individual owing the debt must be notified of the intended action prior to intercept and must be provided with an explanation of his/her appeal rights.
7. Any claim against an individual currently certified for food stamp benefits will not be certified for Federal Tax Offset. If an individual is certified for food stamp benefits after the certification file has been transmitted to the federal certification center, the individual's name will be deleted from the certification file via the weekly update process.

Any claims certified in error will be deleted from the certification file when the Overpayment Unit discovers, or is otherwise made aware of the error. If the debtor's federal income tax refund is intercepted by the Internal Revenue Service before the claim can be deleted from the certification file, the full amount received from the IRS will be refunded to the individual.

Any amounts received from the IRS offset in excess of the balance due on the debt, will be refunded to the customer/debtor. 

The Overpayment Unit will notify the debtor of its intent to refer a claim for intercept and give the debtor 60 days to appeal the intended intercept by presenting evidence that all or part of the claim is not past due or legally enforceable.

The 60 day notice must state:

1. The amount of the claim;
2. That the debtor has previously been notified of the claim and prior collection efforts have been made;
3. That the debt is past due and legally enforceable;
4. The debtor's social security number;
5. That the claim is to be referred for intercept unless the claim is paid within 60 days of the date of the letter or other repayment arrangements acceptable to the Overpayment Unit have been made;
6. Instructions about how to pay the claim;
7. The name, address, and telephone number of an individual in the Overpayment Unit who can discuss the claim and the intended intercept with the individual; and
8. The specifics of the appeal process as described in the following section.

As one of the conditions for referring a claim for offset, any evidence presented by a debtor making a timely request for a review must be considered and a determination made as to whether the debt is past due and legally enforceable.

In order to request a review, the debtor must provide evidence or documentation to the Overpayment Unit, who will refer the request for review to the Appeals and Hearings office, that the claim is not past due or is not legally enforceable within 60 days of the date of the 60 day notice. A request for review is not considered received until the individual provides such evidence or documentation. The debtor's social security number must be included with the request. A claim will not be submitted for intercept if a timely request for review has been filed and is pending.

The debtor must be notified in writing after the Appeals and Hearings office has reviewed the submitted evidence and documentation and rendered a decision whether or not the debt is past due and legally enforceable.

If the determination is made that the claim meets the requirements for certification, the debtor must be notified that the Overpayment Unit intends to refer the claim for offset. The debtor must be advised that he or she is entitled to appeal that decision to Food and Consumer Service within 30 days of receipt of the decision by the Appeals and Hearings Office. The notice must contain the address of Food and Consumer Service. The debtor must be advised to include his/her social security number on the appeal.

If the determination is made that the claim is not appropriate for offset, the debtor must be notified in writing and any appropriate corrective action taken under food stamp claim rules.

When Food and Consumer Service (FCS) receives a timely appeal, the FCS Regional Office in Dallas, Texas, will take one of two actions prior to the date the Overpayment Unit is required to certify files to FCS. 1) If time permits, FCS will complete the review and notify the debtor and the Overpayment Unit. 2) If not, FCS will notify the Overpayment Unit that it has not completed its review and the claim must be deleted from the final files certified to FCS for intercept.

When FCS receives an appeal from a state agency decision, it will request documentation from the Overpayment Unit. After review, if a determination is made that the debt is past due and legally enforceable, the debtor will be notified and advised that he or she has the right to pursue other appeals through the courts. If FCS determined that the claim is not past due or legally enforceable, FCS will request that the Overpayment Unit take any appropriate corrective action. The Overpayment Unit will be notified of FCS's decision in either event.