Calculating Underpayments 430-05-90-20
(Revised 04/01/08 ML3136)
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If a household was eligible but received an incorrect benefit, an underpayment is calculated only for those months the household participated. After correcting the loss for future months the worker must calculate the underpayment as follows:
- If a household’s application was denied in error, the month the underpayment initially occurred is the month of application.
- If a household filed a timely application for review and it was denied in error, the month of underpayment is the month following the expiration of the household’s review period.
- If an eligible household’s application was delayed by the worker, the month of underpayment is the month of application.
- If a household’s benefits were terminated in error, the month of underpayment is the first month benefits were not received.
An underpayment is calculated for each month beginning with the first month incorrect benefits were issued to:
- The first month the error has been corrected.
- The first month the household is found ineligible.
In cases where there is insufficient information to determine eligibility, the worker must advise the household of what information is needed to determine eligibility. The F813 - Request for Information on a Closed Case must be sent requesting circumstances for each benefit month there is insufficient information to determine eligibility. For each month the household cannot provide the necessary information to determine eligibility, the household is ineligible.
Exception:
If expenses are not provided the expense is not allowed in determining the underpayment.
For the months the household was eligible, the worker must calculate the benefit the household should have received. If the household received a smaller benefit than it was eligible to receive, the difference between the actual and correct benefits equals the underpayment.
If the case has been closed since the incorrect denial or closure, the case must be reverted to open. If the case has been reopened since the incorrect denial or closure, benefits must be manually calculated using actual month circumstances and an underpayment must be added and authorized for each month the household is eligible for a benefit.
When a household is entitled to underpayments for a period of time in which the review would have expired, an application for review must be completed. The application for review is registered as an application for review the month the original review period expired.
When completing corrective action on a case, corrective action must be established based on the reporting requirement the household was subject to when the error occurred or should have been subject to if the incorrect reporting requirement was applied.
Change Reporting
When completing an underpayment, actual month’s circumstances must be used for the eligibility item(s) determined to be in error. If completing an underpayment for income that was used incorrectly, actual income must be used, even if income conversion applies (income paid weekly or biweekly).
Simplified Reporting
When completing an underpayment, circumstances that should have been used at initial certification, the six-month report, review, or when a change was reported/discovered or should have been reported that required action must be used for the eligibility item(s) determined to be in error, taking into consideration any other changes reported during that time. If income conversion applies, the corrected converted amount from the initial month, six month report or review (not corrected converted income from each month in error) must be used to determine the underpayment, taking into consideration any other changes reported during that time.
Correcting the Reporting Requirement
When completing corrective action on a case that was assigned the incorrect reporting requirement, the SR indicator is corrected as follows. Policy approval is required when correcting the indicator for paid benefit months.
For cases that should have been simplified reporting:
- If correcting the indicator prior to the date the six-month report is generated in TECS, the indicator is changed for prior months.
- If correcting the indicator beyond the date the six-month report should have been generated in TECS, the indicator is not changed for prior months. The indicator is changed for month 7 forward.
Six-month reports are generated on the 6th to the last working day of month 5.
For cases that should have been change reporting:
- The indicator is corrected for all prior months.
Examples:
- Household with earned income applied in September. The worker incorrectly entered an N for the simplified reporting indicator on CHRS when approving the application for September and October. In November, the household reports an increase in income. The worker reacts to the change and decreases the household’s benefit. In December the worker discovers the incorrect reporting requirement was assigned to the case.
The indicator must be changed back to September so the six-month report is mailed correctly in January.
The worker must complete corrective action for December based on simplified reporting policy, which results in an underpayment. The income used at application to determine September, October and November benefits is used to determine the underpayment for December. The case will then roll with this income until six-month report, unless the household reports a change.
- Elderly household with no earned income applies in October and is certified as simplified reporting. In March the household files a six-month report. The worker determines the household was assigned the incorrect reporting requirement at the time of application. The indicator must be change to N for October through March. Actual month circumstances for each month must be used to determine if the household would have been required to report a mandatory reportable change based on change reporting requirements. If the household would have been required to report a mandatory reportable change, the worker must correct the case.