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Vol. 11 04/2022

Benefit Integrity

Manual

SNAP/TANF

Program ii

TABLE OF CONTENTS

Chapter 1 Introduction to Benefit Integrity 1

1.1 Authority 1

1.2 Purpose of the Benefit Integrity Program 1

1.3 Administration of the Benefit Integrity Program 1

1.4 Definition of a Recipient Claim 2

1.5 Responsibility for Paying Claims 2

Chapter 2 Types of Claims 4

2.1 Types of Claims 4

2.2 Agency Error (AG) Claims 4

2.3 Inadvertent Household Error (CL) Claims 4

2.4 Intentional Program Violation (IPV) 5

2.5 Suspected Fraud/Fraud (FR) Claims 5

Chapter 3 Possible Claims 7

3.1 Referring Possible Claims 7

3.2 Possible Claims in Transferred Cases 7

3.3 DSS Employee Possible Claim Referral to the Office of Inspector General (OIG) 7

3.4 Priority for Establishing Possible Claims 8

3.5 Possible Claims Management 8

Chapter 4 Electronic Benefit Transfer (EBT) Misuse and Benefit Trafficking 9

4.1 EBT History 9

4.2 EBT Misuse 9

4.3 Benefit Trafficking 9

4.4 Referral Sources for EBT Misuse and Benefit Trafficking 10

4.5 Profiles for EBT Misuse and Benefit Trafficking 10

4.6 Evidence for EBT Misuse and Benefit Trafficking 11

4.7 Investigating EBT Misuse and Benefit Trafficking 11

Chapter 5 Calculating Claims 13

5.1 Start Dates for Calculating Claims 13

5.2 Time Frames for Calculating Claims 14

5.3 Calculating SNAP or TANF Claims Not Due to Trafficking 14

5.4 Calculating SNAP Claims Due to Trafficking 16

5.5 Reducing SNAP Overpayments by Expunged EBT Benefits 16

5.6 Use of ESC Wage Match in Calculating Claims 17

5.7 Use of Subpoenas in Calculating Claims 17

5.8 Use of Home Visits in Calculating Claims 17

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Chapter 6 Establishing Claims 18

6.1 Pre-establishment Cost Effectiveness Determination 18

6.2 Steps to Establish a Claim, Both SNAP and TANF 18

6.3 Restoring Eligible Months for TANF Claims 19

6.4 Establishing Claims on Persons Unknown to CHIP 19

6.5 Notification of a Claim 19

6.6 Transferring Established Claims 19

Chapter 7 Adjudicating Claims 20

7.1 Disqualification from SNAP Participation 20

7.2 Claims Review Process for SNAP Intentional Program Violations 20

7.3 Administrative Disqualification Hearing (ADH) Policy 20

7.4 Referring SNAP Claims for ADH’s 21

7.5 ADH Procedures 21

7.6 Fair Hearings Combined with ADH’s 22

7.7 Administrative Consent Agreements (ACA’s) 22

7.8 SF/FR Claims Sent to the Office of Inspector General (OIG) Policy 22

7.9 Claims Not Sent to the Office of Inspector General (OIG) 23

7.10 Making a Referral to the Office of Inspector General (OIG) Procedure 23

7.11 Cases Returned From OIG 23

7.12 Pre-Trial Intervention for Claims Referred to the Inspector General (OIG) 24

7.13 Repayment Agreements on Claims Referred to the Inspector General (OIG) 24

Chapter 8 Disqualification for IPV’s in the SNAP 25

8.1 Disqualification Time Frames 25

8.2 Imposing the Disqualification 26

8.3 The Disqualified Recipient Subsystem (DRS) 27

Chapter 9 Recipient Rights to a Fair Hearing 28

9.1 Recipient Rights to a Fair Hearing 28

9.2 Collection Activity on Claims Requesting Fair Hearings 28

Chapter 10 Repayment of Claims 29

10.1 Repayment Agreements 29

10.2 Compromising Claims 29

10.3 Allotment Reduction for Claims Repayment 30

10.4 Repayment with Benefits from EBT Accounts 30

10.5 Repayment by Public Service 32

10.6 Bankruptcy 32

10.7 Interstate Claims 32

10.8 Unspecified Joint Collections 32

10.9 Refunds for Overpaid Claims 32

10.10 Retention Rates for Collected Claims 33

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Chapter 11 Delinquent Claims 34

11.1 Determining Delinquency for Claims 34

11.2 Delinquent Claims Referred to the Claims Collection Unit (CCU) 34

11.3 Terminated Claims 35

11.4 Written Off Claims 35

11.5 Terminating and Writing Off Claims 35

Chapter 12 Benefit Integrity Cases File 36

12.1 Benefit Integrity Case File Format 36

12.2 Retention of Benefit Integrity Case Files 37

Chapter 13 SNAP Management Evaluation (ME) 38

13.1 Management Evaluation (ME) Review Objectives 38

13.2 Frequency of ME Review 38

13.3 ME Review Coverage 38

13.4 Corrective Actions Plans for ME Review 39

13.5 Monitoring and Evaluation of ME Corrective Action 39

Chapter 14 Benefit Integrity Forms, Notices and Reports 40

14.1 Benefit Integrity Forms 40

14.2 Benefit Integrity CHIP System Notices 40

14.3 Benefit Integrity CHIP System Reports 41

Appendix I: SNAP/TANF Benefit Integrity Manual Revisions 42 v

Abbreviations

ARRA..............................................................................American Recovery and Reinvestment Act of 2009 ACA........................................................................................................ Administrative Consent Agreement ADH................................................................................................. Administrative Disqualification Hearing AR....................................................................................................................... Authorized Representative BI.......................................................................................................................................... Benefit Integrity BICS.......................................................................................................... Benefit Integrity Claims Specialist BIPC...................................................................................................Benefit Integrity Program Coordinator CCU............................................................................................................................. Claims Collection Unit CAP............................................................................................................................. Corrective Action Plan CAP2.......................................................................................................Case Profile – Page 2 (CHIP Screen) CHIP................................................................................................... Client History and Information Profile CLAR.............................................................................................. Client and Recovery Menu (CHIP Screen) CLIN....................................................................................................................Client Inquiry (CHIP Screen) CLPR....................................................................................................................Client Profile (CHIP Screen) COR............................................................................................................................... County of Residence DAA. .......................................................................................................Drug and Alcohol Addiction Center DRS................................................................................................................. Disqualified Recipient System DCA................................................................................ Deferred Adjudication Disqualification Agreement DIRE................................................................................................................Direct Recovery (CHIP Screen) DQ............................................................................................................................................... Disqualified EBT.......................................................................................................................Electronic Benefit Transfer EW.......................................................................................................................................Eligibility Worker EWAL........................................................................................................................EW Alerts (CHIP Screen) EXHI.......................................................................................................Expungement History (CHIP Screen) FAIH...........................................................................................Family Independence History (CHIP Screen) FI.................................................................................................................................. Family Independence FITL.......................................................................................................................FI Time Limit Maintenance GLA.......................................................................................................................Group Living Arrangement FR …...................................................................................................................................................... Fraud INME.................................................................................................................. Inquiry Menu (CHIP Screen) IPV.................................................................................................................. Intentional Program Violation ME.......................................................................................................................... Management Evaluation NDQ........................................................................................................................ National Disqualification OIG..................................................................................................................... Office of Inspector General PI...................................................................................................................................... Primary Informant POCL............................................................................................................... Possible Claims (CHIP Screen) PRAP.............................................................................................Program and Person Alerts (CHIP Screen) QC.......................................................................................................................................... Quality Control RCS...................................................................................................................... Regional Claims Supervisor SEPA........................................................................................................ Setup Participations (CHIP Screen) SCOSA........................................................................................ South Carolina Office Scanning Application SF......................................................................................................................................... Suspected Fraud SNAP........................................................................................ Supplemental Nutrition Assistance Program SSN............................................................................................................................Social Security Number TANF……………………………………………………………............................. Temporary Assistance for Needy Families UNIN........................................................................................................... Unearned Income (CHIP Screen)

BENEFIT INTEGRITY MANUAL

Chapter 1 Introduction to

Benefit Integrity

1.1 Authority

The authority under which the Benefit Integrity Program operates is included in the Code of Federal Regulations, Parts 210 to 299, which is updated by the Federal Register as of January 1st each year.

Regulations specific to Supplemental Nutrition Assistance Program (SNAP) claims are found in 7 CFR 273.18.

The authority for the Family Independence (FI) Program also exists in the South Carolina Family Independence Program Regulations Article 11, Section 114-1130. DSS adheres to all federal and state regulations in the operation of the Benefit Integrity Program.

1.2 Purpose of the Benefit Integrity Program

The purpose of the Benefit Integrity Program is to maintain program integrity by providing methods to ensure that benefit amounts provided to recipients in the SNAP and TANF Programs are accurate according to federal and state policies and based on the recipient's circumstances and that misuses of program benefits are detected, prevented and ultimately deterred.

This manual contains policy for the detection, investigation, establishment, and collection of payments made in error or due to fraud. SNAP and TANF claims must be calculated according to the policies and procedures of their respective program at the time the claim occurred.

1.3 Administration of the Benefit Integrity Program

The Benefit Integrity Program is operated on a state, regional, and county level. The Benefit Integrity Unit within the Division of County Operations at the state level is responsible for developing and updating policy and providing policy clarification as needed and providing county Benefit Integrity staff with technical assistance regarding implementation and maintenance of policy and procedures. This Unit also monitors county performance, conducts Benefit Integrity program reviews for the federally mandated county level SNAP Management Evaluation (ME) Review process, and monitors county corrective action plans required to bring a county’s program integrity processes into compliance with federal and state regulations.

The Claims Collection Unit (CCU) within Financial Services at State Office is responsible for the collection of delinquent SNAP and TANF claims. CCU also administers the federal Treasury Offset Program (TOP) and the SC Department of Revenue Debt Offset Program for the interception of income tax refunds to repay delinquent Benefit Integrity.

Chapter

The Office of Inspector General (OIG) within the Office of General Counsel at State Office provides services to the benefit integrity program in the areas of investigation and prosecution of SNAP intentional program violations, suspected fraud and EBT misuse and trafficking offenses.

All 46 counties are divided into four (4) regions within the state of South Carolina. Each Region includes

Benefit Integrity Claims Specialists (BICS) and two (2) Regional Claims Supervisors (RCS). The BICS report directly to the RCS. The RCS are supervised by the Benefit Integrity State Supervisor located at the State

Office.

Since the ability for the general public to report misuse in public assistance programs plays a vital role in ensuring the public trust in the programs DSS administers, contacts for the purpose of reporting fraud and program misuse will be directed to the appropriate county DSS office. The use of DSS Connect, 1-800-616- 1309 should be used to report any instances of fraud or misuse.

1.4 Definition of a Recipient Claim

A recipient claim in the SNAP and TANF Programs is an amount owed to DSS because:

1. Benefits are overpaid.

2. Benefits are trafficked. Trafficking means the buying or selling of SNAP benefit instruments for cash or consideration other than eligible food. Trafficking may also mean the exchange of firearms, ammunition, explosives or certain controlled substances for SNAP benefits. (See Chapter 4 for an expanded definition of Trafficking.)

1.5 Responsibility for Paying Claims

The following individuals, regardless of the claims classification, are responsible for paying a claim:

1. Each person who was an adult member of the household when the overpayment or trafficking offense occurred.

NOTE: The primary informant (PI) may not be held "automatically" responsible for trafficking the household’s benefits if there is no direct evidence identifying him/her as the guilty party. However, the PI may be held responsible when there is sufficient circumstantial evidence to show his/her complicity in the violating act. Complicity in this case means that even though the PI may not have actually conducted the transaction, upon questioning there is convincing evidence that he/she was aware of it, may have benefited, and took no actions to correct it.

2. A sponsor of a non-citizen household if the sponsor is at fault.

3. A person connected to the household, such as an authorized representative (AR) or protective payee, who causes an overpayment.

NOTE: This includes when a drug and alcohol addiction center (DAA) or other group living arrangement (GLA) acts as the authorized representative.

4. A person connected to the SNAP household, such as an authorized representative, who actually trafficks.

NOTE: This includes when a drug and alcohol addiction center (DAA) or other group living arrangement (GLA) acts as the authorized representative.

Federal regulations specify that DSS cannot require individuals serving as authorized representatives or sponsors of non-citizens to provide DSS with their Social Security Numbers (SSNs). Also, SSNs may not be available for individuals who have committed trafficking offenses. Although the individual can be registered in CHIP without a SSN, the system will not process a claim without a SSN.

Chapter 2 Types of Claims

2.1 Types of Claims

There are four types of claims:

1. Agency Error (AG)

2. Inadvertent Household Error (CL)

3. Intentional Program Violation (IPV) specific to SNAP only

4. Suspected Fraud (SF)/Fraud (FR)

2.2 Agency Error (AG) Claims

An agency error (AG) claim is any claim for an overpayment caused by an action or failure to take action by DSS. Instances which may result in an AG claim include, but are not limited to, DSS:

1. Failure to take prompt and proper action on a reported change;

2. Incorrect computation of benefit amounts;

3. Incorrect benefit issuance due to computer system error;

4. Continued benefits to a SNAP household after its certification period has expired without the household having been recertified; and

5. Failure to timely impose a disqualification on an SNAP participant when an IPV has been adjudicated administratively or judicially.

2.3 Inadvertent Household Error (CL) Claims

An inadvertent household error (CL) claim is any claim resulting from a misunderstanding or unintended error on the part of a household who otherwise complies with program requirements.

2.4 Intentional Program Violation (IPV)

An intentional program violation (IPV) is in SNAP only and occurs when a person intentionally:

1. Makes a false or misleading statement, or misrepresents, conceals or withholds facts or

2. Commits any act that constitutes a violation of the Food and Nutrition Act, the SNAP Regulations, or any state statute relating to the use, presentation, transfer, acquisition, receipt, or possession or trafficking of SNAP benefits, coupons, authorization cards or reusable documents used as part of an automated benefit delivery system (access device).

A claim cannot be assigned as an IPV unless:

1. It has been determined through an Administration Disqualification Hearing (ADH) that a household member has committed an IPV; or

2. The individual waives his right to an ADH by signing a DSS 1648, Administrative Consent Agreement

Waiver of Hearing and Consent to Disqualification (ACA); or

3. The individual receives approval to participate in a Pretrial Intervention (PTI) Program and the DSS 2659, Deferred Adjudication Disqualification Consent Agreement, has been forwarded to the BICS by OIG.

Individuals who are found to have committed an IPV are subject to disqualification from participation in the SNAP ranging from 12 months to permanent disqualification if imposed after September 22, 1996. (See 8.1 for disqualification time frames.)

2.5 Suspected Fraud/Fraud (FR) Claims

Fraud is defined as a false representation of facts by words or conduct, by false misleading allegations, or by concealment of that which should have been disclosed, which deceives, and is intended to deceive another in order to obtain assistance illegally. A person who commits fraud violates state and federal laws.

As generally accepted in South Carolina courts, the necessary elements of fraud are:

1. Misrepresentation of a fact with intent to deceive, including positive assertion of falsehood, concealment of the truth, suppression of the truth, and/or establishment of a false impression by words, actions or trickery;

2. Knowledge of the falsity of the representation by the maker;

3. Materiality of the fact misrepresented;

4. Reliance on the misrepresentation by the person deceived; and

5. Damage to the person deceived (benefit to the wrongdoer is normally immaterial). Damage is not required to prove a violation under SC Code 16-13-430, Fraudulent Acquisition or Use of Food Stamps.

A determination of fraud for the SNAP or TANF can only be made through judicial proceedings in a criminal court and must be proven by evidence which is beyond a reasonable doubt. Individuals who are found guilty of fraud by a court are subject to disqualification from participation in the SNAP. No disqualification exists in the TANF Program.

Chapter 3 Possible Claims

3.1 Referring Possible Claims

All situations involving potential overpayments or trafficking are defined as possible claims (POCL) and a POCL referral, DSS 1680, must be submitted to the Benefit Integrity Unit as soon as detected. In addition, counties are required to submit possible claims referrals in all Quality Control (QC) error cases that cite an overpayment.

BICS must search for the information in the appropriate folders to avoid making unnecessary requests for information that has already been received by DSS.

The DSS 1680 should be scanned in the Benefit Integrity Folder; Possible Claim (1680) Sub-folder; and be assigned to the “Claims” folder in SCOSA no later than 10 days from the date of detection.

The RCS is responsible for rotating the DSS 1680 to the next available BICS from the Claims mailbox and entering the date detected on CHIP screen Possible Claim (POCL) no later than 10 days following the date the referral was received in the Claims mailbox.

3.2 Possible Claims in Transferred Cases

If a case is transferred from one Region to another, coordination between Regions should take place to resolve any pending issues on the claim.

Claims must be completed within six months from the date of detection.

3.3 DSS Employee Possible Claim Referral to the Office of Inspector General

(OIG)

When a BICS receives a DSS 1680 involving a DSS employee, the BICS must forward the DSS 1680 through the RCS to the OIG. The Benefit Integrity State Supervisor collects all the employee referrals and forwards them, as received, to OIG. The Benefit Integrity State Supervisor keeps a log of all the employee referrals, so that once the OIG case has been completed that claim may be established on the employee. The BICS will not investigate a DSS employee, nor will they calculate the claim amount, until OIG completes the claim investigation and returns it to the RCS along with all evidence necessary to determine the overpayment amount.

When a BICS receives a DSS 1680 involving a DSS employee, the BICS must forward the DSS 1680 through the RCS to the OIG. The BICS will not investigate a DSS employee, nor will they calculate the claim amount, until OIG completes the claim investigation and returns it to the RCS along with all evidence necessary to determine the overpayment amount.

3.4 Priority for Establishing Possible Claims

The BICS must establish possible claim referrals based on the date of detection with the oldest date of detection taking first priority over any newer possible claim referrals.

NOTE: If there are multiple overpayments in different classifications for concurrent time periods, establish the claims in the following order: AG, IPV/SF and CL last.

3.5 Possible Claims Management

The BICS must establish a claim on any possible claim referral, or take action to unfound the referral, no later than six months from the date of detection of the possible claim.

Chapter 4 Electronic Benefit Transfer

(EBT) Misuse and Benefit Trafficking

4.1 EBT History

In the late 1990s, the Food Stamp (now SNAP) program was revamped, with some states phasing out actual stamps in favor of a specialized debit card system known as Electronic Benefit Transfer (EBT). Many states merged the use of the EBT card for public welfare programs as well, such as cash assistance or Temporary Assistance for Needy Families (TANF). The move was designed to save the government money by not printing the coupons, make benefits available immediately instead of requiring the recipient to wait for mailing or picking up the booklets in person, and reduce theft and diversion.

One of the ways DSS tracks fraud is through analyzing electronic (EBT) transactions with suspicious patterns.

4.2 EBT Misuse

EBT misuse is defined as:

1. Buying ineligible items with SNAP benefits

2. Using SNAP benefits, excluding trafficking, for any reason other than to purchase food items for eligible household members

3. Maintaining a credit account with a retailer for the purchase of eligible items paid with SNAP benefits.

4.3 Benefit Trafficking

Benefit trafficking is:

1. Attempting to buy, sell, steal, or otherwise affect an exchange (either online or in person) of SNAP benefits issued and accessed via Electronic Benefit Transfer (EBT) cards, card numbers and personal identification numbers (PINs), or by manual voucher and signature, for cash or consideration other than eligible food, either directly, indirectly, in complicity or collusion with others, or acting alone.

2. The exchange of firearms, ammunition, explosives or certain controlled substances for SNAP benefits.

3. Purchasing a product with SNAP benefits that has a container requiring a return deposit with the intent of obtaining cash by discarding the product, and intentionally returning the container for the deposit amount.

4. Purchasing a product with SNAP benefits with the intent of obtaining cash or consideration other than eligible food by reselling the product, and subsequently intentionally reselling the product purchased with SNAP benefits in exchange for cash or consideration other than eligible food.

5. Intentionally purchasing products originally purchased with SNAP benefits in exchange for cash or consideration other than eligible food.

4.4 Referral Sources for EBT Misuse and Benefit Trafficking

Sources of referrals for EBT misuse and benefit trafficking include:

1. Unsolicited reports from outside DSS.

2. Reports of suspected misuse from within DSS including computer program identification from the Conduent Intelligent Analytics Portal and Pondera.

3. Recipients whose EBT transactions may be used, or have been used, as evidence to disqualify a retailer for trafficking. These referrals are generated and forwarded by Food and Nutrition Service

(FNS).

4.5 Profiles for EBT Misuse and Benefit Trafficking

The following profiles can be used to substantiate allegations of EBT misuse or benefit trafficking:

1. Rapid Transactions: These are transactions that appear too rapidly after the prior transaction to be a legitimate food purchase. In supermarkets that have electronic scanners, conveyor belts large enough to hold several large food purchases, and electronic scales to instantly weigh them. For example, a $100 purchase, transaction time should not be less than five minutes and for a $40 purchase, transaction time should not be less than three minutes.

2. Excessively Large Transactions: These are transactions that are unreasonably large based on the size and nature of the retailer's operation. The store does not carry the amount and/or type of food stock to account for the number of such transactions occurring. The majority of retailers with one EBT terminal do not carry the amount or type of food stock to justify routine transactions in the $100.00 range.

3. Repeated Transactions: These are transactions involving the same EBT card during the course of a given day. This type of transaction takes two basic forms:

a. Series of two or more consecutive transactions

b. A number of transactions spread out over the entire day.

4. Consecutive Transactions Ending in the Same Cents Value: These are transactions in amounts ending in zero cents or some other cent value in blocks of three or more consecutive transactions.

The probability of the occurrence of the same cents value twice consecutively is 1/10,000.

5. Zeroing Out an EBT Account: This is complete or near depletion of the balance of an account in one transaction.

6. Large Transaction to Specialty Stores: These are large dollar transactions occurring at retailers that do not offer a wide range of food stock such as seafood retailers or meat markets. These transactions should be weighed against the overall benefit amount for the household.

7. Odd Cents Transactions Followed by Large Withdrawals: This is a small transaction, usually less than

$1.00, followed by a larger transaction. This could indicate a balance check followed by a large depletion.

8. After Hour Transactions: These are transactions made after or before a retailer's regular posted hours.

9. Excessive EBT Card Replacements: Requesting excessive replacement cards, over 4 in a 12 month period, can be an indicator that a client is exchanging SNAP cards for cash or other ineligible items.

A BICS will investigate the case for trafficking and determine the amount of the claim based on trafficked benefits spent, if suspicious circumstances warrant an investigation.

4.6 Evidence for EBT Misuse and Benefit Trafficking

The following evidence should be used to substantiate allegations of EBT misuse and benefit trafficking:

1. Site Survey – A BICS may survey a retailer location to document the physical characteristics and the business activity of the retailer. This information can generally be obtained from the Benefit Integrity Program Coordinator at State Office.

2. Conduent Data - Conduent is South Carolina’s SNAP benefits EBT issuance vendor. Conduent documents all activity conducted by the client and retailer via the electronic transfer of benefits.

Screen prints from this system are to be considered official confidential business records of DSS.

3. Client Education - Prior to participating in EBT, clients are informed about their rights and responsibilities as well as their liabilities and fraud penalties. This information is provided to the client at the time of the application for eligibility for SNAP/TANF.

4.7 Investigating EBT Misuse and Benefit Trafficking

Before any investigation of an individual suspected of EBT trafficking or EBT misuse can occur, clearance must be received from FNS on the retailer involved in the EBT transactions. This clearance ensures that there is not an ongoing investigation by another state or federal agency that may be jeopardized by the BICS investigation of the recipient.

The PI may not be held "automatically" responsible for EBT misuse or benefit trafficking if there is no direct evidence identifying him/her as the guilty party. However, the PI may be held responsible when there is sufficient circumstantial evidence to show his/her complicity in the EBT violation. Complicity in this case means that even though the PI may not have actually conducted the transaction, upon questioning there is convincing evidence that he/she was aware of it, may have benefited, and took no actions to correct it.

Complicity may be shown by establishing a clear pattern of misuse over time with the PI not providing a reasonable explanation and never reporting a loss/theft of the EBT card or benefits.

Chapter 5 Calculating Claims

5.1 Start Dates for Calculating Claims

Table 1. The following chart shows the start dates when calculating claims:

Claims Classification

Start Dates for Calculating Claims

SNAP/TANF AG

On an initial application, the claim is calculated from the first month of issuance.

On every other case, the first month of overpayment will be the first month DSS would have made the change effective had it acted timely based on the date the change was reported.

Example 1: The client reports at an initial application, 2/14/19, that she receives child support. The income was not included in the budget. The AG claim to add the child support income will start effective 2/14/19.

Example 2: The client reports at recertification, 2/2/19, for March 2019, that she no longer pays rent. The worker left the rent in the budget. The AG claim to remove the rent deduction will start effective 3/1/19.

SNAP/TANF CL

The first month of overpayment is the first month in which the change would have been effective if it had been reported timely based on when the change occurred and the recipient's requirement to report.

Example: The client reports at recertification, 2/2/19, for March 2019 that she is employed. However, she became employed 11/1/18. Her gross income made her ineligible for benefits. Therefore, her CL claim will start 1/1/19.

The client should have reported that she was over the 130% gross income limit by

12/12/18 and the case would have been closed for January 2019. Client did not understand that she was over the 130% gross income limit for SNAP.

SNAP IPV or

SNAP/TANF SF/FR

The first month of the IPV is the month the act of intentional program violation occurred. An overpayment resulting from an IPV may occur based on the household’s reporting requirements.

Example: The client fails to reports at recertification, 2/2/19, for March 2019 that she is employed. It was discovered from the ESC wage match during recertification in August 2019. She became employed 11/1/18. Her gross income does not make her ineligible for benefits.

The client’s gross income from the time she became employed (11/1/18) did not cause her to be over the 130% gross income limit. Therefore, she would not be required to report employment until recertification. The first month of IPV is

February 2019 when the intentional act occurred but the first month of the overpayment is March 2019 since that would be the first month the change could have been acted on if it was reported correctly by the household.

CAUTION: The months of IPV and overpayment may not be the same.

NOTE: In a recertification, if an intentional program violation occurs in the last month of certification and in connection with efforts to establish recertification, the first month of overpayment is the first month of the certification period based on the recertification action.

5.2 Time Frames for Calculating Claims

Table 2. The following chart shows the time frames when calculating claims by classification type:

For SNAP AG, CL, IPV, or SF/FR you must calculate a claim . . .

and . . . and . . .

back to at least twelve months prior to when you become aware of the overpayment for an IPV claim, the claim must be calculated back to the month the act of IPV first occurred for all claims, don't include any amounts that occurred more than six years before you became aware of the overpayment.

For TANF AG, CL or SF/FR claims, there is no time limit on the calculation of an overpayment.

Note: SNAP AG claims will not be calculated more than 12 months before you became aware of the overpayment and can go 12 months after the date of detection if the case has not been corrected when the referral was made.

5.3 Calculating SNAP or TANF Claims Not Due to Trafficking

Table 3. The following chart shows the steps for calculating a claim not related to trafficking:

Steps for Calculating a SNAP or TANF Claim Not Related to Trafficking

Unless Then

Determine the correct amount of benefits for each month the household received an overpayment.

Example: The client reports at an initial application, 2/14/19, that she receives child support. The income was not included in the budget. This was not detected until recertification July 2019. The AG claim to add the child support income will start effective 2/14/19.

To determine the overpayment amount for each month, calculate the monthly amount of child support received and include it in the budget each month on the unearned income screen (UNIN).

Do not apply the earned income deduction to that part of any earned income that the household failed to report in a timely manner.

NOTE: The household would be entitled to the earned income deduction in a CL claim ONLY for the month of discovery.

Example: The client fails to reports at recertification, 2/2/19, for March 2019 that she is employed. It was discovered from the ESC wage match during recertification in August 2019. She became employed

11/1/18. Her income gross income does not make her ineligible for benefits. Therefore, her IPV/SF claim will start 3/1/19.

SNAP benefits are $200 for 3/1/19; add earned income on UNIN with the code EI FA (which will include the income for both SNAP and TANF) since it was not reported for that month; if determined client was entitled to $42 for March 2019, the overpayment for

March is $158.00. This process is repeated for each month of the overpayment.

The claim is a TANF or a SNAP AG claim.

Apply the earned income deduction.

Subtract the correct amount of benefits from the benefits actually received. The remainder is the amount of the overpayment.

Example: $200 issued less $42 correct amount = $158 overpayment.

The remainder is zero

(0) or negative.

Example: $200 issued;

DSS failed to remove a household member with income. The corrected amount of

Unfound the claim referral.

the benefits is $285.

No claim exists.

For SNAP claims, reduce the overpayment amount by any EBT benefits expunged from the household’s EBT account. The difference is the amount of the claim.

Example: Initial claim amount of $425 less expunged benefits of $2.27 = claim $422.73.

NOTE: When calculating claims with income, use actual income due to unreported and/or underreported income and for reported income use converted income.

CAUTION: When calculating a claim against a household whose allotment was reduced during the month of the overpayment, use the full allotment amount prior to the reduction.

See SNAP Benefit Integrity Alert, July 2, 2009, Subject: SNAP Over issuance regarding ARRA. This SNAP Alert is clarification received from USDA, Food and Nutrition Service, in reference to SNAP provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) regarding the ARRA disregard and impact on over-issuances of SNAP benefits. DSS must disregard the additional amount of benefits that a household receives as a result of the ARRA in determining the amount of SNAP over issuances.

5.4 Calculating SNAP Claims Due to Trafficking

Claims arising from trafficking related offenses will be the value of the trafficked benefits as determined by the individual's admission, adjudication, or documentation that forms the basis for the trafficked determination. Reduce the overpayment amount by any EBT benefits expunged from the household’s EBT account. The difference is the amount of the claim.

Example: The client admitted that she used her EBT card 3 times for cash. She received $50 cash in exchange for $100 of her SNAP benefits to pay her electric bill; $75 cash in exchange for $150 of her SNAP benefits; and $100 cash in exchange for $200 of her SNAP benefits to pay her rent. She admitted to trading $450 in SNAP benefits for $225 in cash. Therefore, her trafficking claim amount owed is $450.

Note: It was determined she had expunged benefits of $3.25. Expungement amount must be deducted from her claim, leaving a claim amount of $446.75.

5.5 Reducing SNAP Overpayments by Expunged EBT Benefits

Reduce the overpayment amount by any benefits expunged from the household’s EBT account. There are three methods to reduce overpayments by expunged benefits for SNAP claims.

1. Through the bookkeeper

2. Manually

3. Automatically

5.6 Use of ESC Wage Match in Calculating Claims

Wages can be calculated by using the Employment Security Commission (ESC) data to establish claims.

NOTE: If the BICS is aware of the dates’ employment started or stopped, the BICS should average earnings over the appropriate time period based on the "start" or "stop" dates. The Wage Match must be used only when all other attempts to verify wages have failed. Documentation must be included in case to show attempts were made to obtain wages from employer.

The BICS will use CHIP Notice C501, Overpayment Demand Letter-ESC Data, to notify the client of an overpayment resulting from ESC Wage Match data.

5.7 Use of Subpoenas in Calculating Claims

A subpoena may be requested through the Office of Inspector General (OIG) and used by authorized personnel to secure both witnesses and documents, which may be required for proof of overpayment in calculating a claim.

NOTE: Subpoena requests must go through the Hearing Officer when a hearing has been scheduled.

CAUTION: A subpoena should only be used when all other efforts to secure the information have been exhausted.

5.8 Use of Home Visits in Calculating Claims

The Agency has decided to no longer conduct home visits; therefore Benefit Integrity staff will no longer make home visits to calculate claims.

Chapter 6 Establishing Claims

6.1 Pre-establishment Cost Effectiveness Determination

Table 4. DSS will not establish and subsequently collect an overpayment that is not cost effective. The BICS will:

Not establish any claim if it is determined that the claim referral is $250 or less.

Unless: the BG is currently participating in TANF or SNAP

Or: The overpayment results from an act of Intentional

Program Violation.

Or: The BICS has already established the claim

Or: The overpayment was discovered in a QC review

Note: This applies to SNAP, TANF and Trafficking overpayments.

6.2 Steps to Establish a Claim, Both SNAP and TANF

In determining a possible claim classification of IPV, the BICS may need the household to cooperate to provide clarification of information relevant to the IPV. The BICS may do this by contacting the household and giving them an opportunity to explain any questionable circumstances. The BICS may ask the household to discuss the issues over the telephone or respond in writing. He/she may also request that the household member appear for an in-office interview, but cannot require that they do so. If the household fails or refuses to respond to any such request, the BICS, having otherwise completed his/her investigation and having sufficient evidence, may proceed with an Administrative Disqualification Hearing action to disqualify the appropriate household member. In no event may the household or household member be threatened with the possibility of termination for non-cooperation.

NOTE: If the eligibility worker (EW) is requesting information to correct future benefits and information from this source is relevant to the overpayment period, the EW should request information for the overpayment period as well. However, the EW is not required to request information to substantiate the claim, unless it is relevant to the EW's on-going eligibility determination.

NOTE: If there is insufficient documentation to proceed with a claim investigation, the BICS will unfound the claim, update the POCL screen on CHIP, and move the POCL in SCOSA to the Unfounded folder.

CAUTION: When an overpayment is suspected in one assistance program, it is important not to overlook the probability that there may be an overpayment in another assistance program simultaneously.

6.3 Restoring Eligible Months for TANF Claims

A TANF household may only receive TANF benefits for 24 months in a 10 year period with certain exceptions.

Due to Agency Error

A TANF household with a claim due to Agency error resulting in total ineligibility must have the ineligible months restored to the BG at the point in time that the claim is established.

Due to Client Error

A TANF household with a claim due to client error or fraud must have any total ineligible months restored to the BG at the point in time that the overpayment is paid in full.

6.4 Establishing Claims on Persons Unknown to CHIP

A claim must be established on anyone who receives benefits that the household is not entitled to receive, regardless of the classification of the claim or who presented the information (i.e. Authorized Representatives, Alien Sponsors).

6.5 Notification of a Claim

The BICS must mail, or otherwise deliver to the household, written notification of any claim, unless the claim will be sent to the Office of Inspector General (OIG) as Suspected Fraud (SF). The claim will be considered established for tracking purposes as of the date of written notification; for this purpose, the initial demand letter. The initial demand letter is CHIP Notice C500, Overpayment Demand Letter, or in the case of an overpayment calculations using the ESC Wage Match data, CHIP Notice C501, Overpayment Demand Letter, ESC Data.

6.6 Transferring Established Claims

When an eligibility case is transferred from one Region to another, all established claims are transferred automatically on CHIP.

Chapter 7 Adjudicating Claims

7.1 Disqualification from SNAP Participation

Table 5. A person who intentionally violates SNAP regulations can be disqualified from SNAP participation.

Disqualification can occur regardless of the current eligibility of the accused. One of the following adjudication processes must occur to classify a suspected intentional program violation as an IPV or SF/FR:

Claim Classification Adjudication Action

SNAP IPV Administrative Disqualification Hearing (ADH) or

Administrative Consent Agreement (ACA)

SNAP SF/FR, TANF SF/FR Court referrals

Only SNAP cases can be disqualified for IPV through an ADH, ACA, or court decision; TANF must only be disqualified through a court decision.

7.2 Claims Review Process for SNAP Intentional Program Violations

The RCS will use a monthly group review process to screen claim types of IPV or SF/FR to protect clients from possible errors in assigning these claim classifications which carry a disqualification from program participation.

7.3 Administrative Disqualification Hearing (ADH) Policy

The Administrative Disqualification Hearing (ADH) is an official hearing before an impartial Hearing Officer in SNAP cases where an individual is suspected of an IPV. The ADH determines intent to defraud, or guilt, on the part of the suspected individual; the amount of the overpayment is not an issue. An ADH is held:

1. When a case is not being referred to the OIG for prosecution in a court.

2. When the suspected individual has chosen not to waive his right to an ADH.

3. When a referral to the OIG for court prosecution has been withdrawn because no action has been taken on the referral in a reasonable time period.

4. When a referral to the OIG for court prosecution has been rejected for prosecution by the Circuit

Court Solicitor.

An ADH must not be used in:

1. Cases currently referred to the OIG for court prosecution.

2. Subsequent to any court action taken against the accused, if the factual issues of the case arise from the same or related circumstances.

7.4 Referring SNAP Claims for ADH’s

When referring SNAP claims for ADHs, the BICS:

1. Sends a copy of the claim and summary to The Division of Individual and Provider Rights (DIPR) at State Office to schedule a hearing. The summary must include the case name, CHIP case number, individual's SSN, individual's (household’s) current address, number of offense (first, second, or permanent), time period of disqualification (Since September 22, 1996, 12 months for the first offense, 24 months for the second offense, or permanently for the third offense. (See 8.1 for detailed disqualified time frames).

2. Sends a copy of the claim summary to the accused.

NOTE: Any evidence of the claim that the BICS plans to submit at the ADH must be provided to the accused with the copy of the claim summary.

The Hearing Officer schedules a timely date for the ADH and notifies the BICS and the accused of this date.

NOTE: If an ADH scheduling notice is returned to the Hearing Officer by the postal service on an active case, there may be information that needs to be resolved regarding current benefit eligibility. In this case, the EW must be notified. An appointment should be scheduled with the recipient to resolve questionable information and the ADH scheduling notice should be given to the accused at this time.

7.5 ADH Procedures

Table 6. The following chart lists ADH procedural responsibilities:

Role Responsibility

Hearing Officer Explains the rules which will govern the ADH, swears each party in, rules on admission of evidence, disallows inadmissible evidence, including hearsay, questions witnesses to discover facts in case, may issue subpoenas, may continue case, may dismiss case, and makes a decision based on the evidence presented at the hearing.

BICS Cites the basis of the overpayment and the time period covered by the claim, proceeds chronologically through the case record by presenting evidence which proves the IPV, and introduces testimony of witness to support the case.

Accused Presents evidence to rebut the testimony of the BICS and introduces testimony of witnesses to support his case.

NOTE: An individual does not automatically face termination from SNAP if the accused fails to attend an ADH, nor is the individual determined guilty of the IPV for failure to appear at the ADH. However, the ADH will be held in the client’s absence and the BICS will be able to present case evidence to prove the client’s intent to violate the program. An impartial Hearing Officer will render a decision based on evidence presented as to whether or not the client committed an IPV.

When the hearing is concluded, the ADH is formally ended; however, the record may be left open for a designated time period. Following the hearing, the Hearing Officer will render a decision and notify the accused, the county office, and the BICS of the findings. The ADH decision is final and binding, but can be appealed by the accused to the Administrative Law Court. If the accused is found guilty by the Hearing Officer, a disqualification from SNAP participation will be sent out in the decision and imposed by the BICS.

If the individual is not found guilty, no disqualification will occur and the claim must be reclassified as a CL.

CAUTION: No further action on the case can occur until the Hearing Officer renders a decision. Any disqualification action is dependent upon this decision.

7.6 Fair Hearings Combined with ADH’s

A Fair Hearing cannot be combined with an ADH when the facts about the case involve the same or related circumstances. A Fair Hearing will be conducted and a committee will make the decision regarding the Fair Hearing. A separate ADH will be conducted and the Hearing Officer will make the ADH decision.

7.7 Administrative Consent Agreements (ACA’s)

For SNAP, an individual suspected of an IPV…