Types of Payments 430-05-80-70

(Revised 07/01/05 ML2972)

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Claims can be paid using any of the following types of payments or a combination of them:

  1. Allotment Reduction

Allotment reduction is automatic for participating households and begins with the first allotment issued after the appropriate notification, if the household did not make arrangements to repay the claim through a lump sum or in installment payments.

  1. Administrative and inadvertent household error claims. The amount of food stamp benefits recovered each month is the greater of 10% of the household’s monthly allotment or $10 per month, whichever is greater.
  2. IPV claims. The amount of food stamp benefits recovered each month is the greater of 20% of the household’s monthly allotment or $20, whichever is greater.
  3. If a household requests benefit reduction at a rate higher than those listed in (a) or (b) immediately above, benefits are reduced by that amount. Supporting documentation must be in the case file.

Exception:

If collecting at the limits listed in (a) or (b) immediately above are greater than the requested benefit reduction by the household, then (a) or (b) immediately above must be used.

  1. Offsetting Underpayments

When a household has an outstanding balance on a claim and is entitled to an underpayment, the system will automatically apply the underpayment to the overpayment.

  1. Lump Sum or Installment Payments

Acceptable forms of lump sum or installment payments include a check, cash, money order, EBT benefits, or food stamp coupons whether it represents partial or full payment. These payments are generally part of a negotiated repayment agreement.

 

If a household fails to submit a negotiated payment, the claim is subject to additional collection actions.

  1. Treasury Offset Program (TOP)

This is informational and is a State Office procedure.

Properly established administrative error, inadvertent household error and IPV error claims can be submitted if they meet the following requirements:

Exceptions:

  1. There is a court order.
  2. If part of a combined claim is under judgement, it is not limited by the ten-year time frame.
  3. Double submissions of claims involving more than one adult household member are not allowed.
  4. Claims submitted for bankruptcy cannot be referred if the State Office is notified of the bankruptcy.
  1. Client Authorized EBT Benefits

A household must be allowed to pay a claim using benefits from its EBT account.  If the household is currently participating in the program, allotment reduction is automatic.  The worker must explain to the household that choosing repayment from its EBT account in addition to allotment reduction or an EBT benefit greater than allotment reduction is strictly voluntary.  

 

Written authorization must be obtained from the client which specifies the amount. The Demand for Payment notice can be used. This information must be submitted to the State Office.

  1. Stale EBT Account Debits

An automatic notice will be sent to the household allowing the household 10 days to advise either the worker or the State Office that they do not want these benefits used to pay the claim.

 

If the household advises the worker that they do not want these benefits used, they cannot be used. The worker must contact the State Office with this information.

  1. Expunged EBT Benefits

Any benefits in an EBT account that has not been used in 365 days are expunged and no longer available to the household. Expunged benefits are applied to any outstanding claim using the EX code. This is a State Office procedure.

  1. Other Collection Actions

Other collection action may be used to collect claims such as collection agencies.

  1. Unspecified Joint Collections

When an unspecified payment is received for a combined case, each program must receive a prorata share of the amount collected.

  1. Public Service

If authorized by a court, the value of a claim may be paid by performing public service.