Overpayments

7-2 Over payments


PURPOSE



1. To identify, recover or otherwise account for Social Assistance benefits received in excess of eligibility by applicants.



PRINCIPLE



2. To avoid future hardship to applicants, overpayments should be prevented by accurate information gathering, careful calculations, correct application of regulation and policy, and timely reviews.



3. Overpayments are cash or material benefits which the applicant was not entitled to receive.



4. Some Social Assistance benefits may not be considered overpayments when caused by an error in interpretation or judgement by the worker, or systems error.



5. The overpayment recovery rate should be realistically based upon the applicants ability to pay.



POLICY



6. All overpayments shall be documented on an Overpayment Record (HSS 127) by the assigned worker in consultation with the Area Overpayment Coordinator.



7. An attempt shall be made to recover all overpayments regardless of whether or not the person continues to receive Social Assistance benefits. (Refer to Sections 14 and 15)



8. Overpayment recoveries from persons with continuing eligibility may be negotiated as follows:

(a) Repayment in lump sum; or

(b) A reasonable deduction from the monthly cheque; or

(c) Termination of assistance until the applicant has expended an amount equivalent to the overpayment, considering both basic and special need expenses; or

(d) Some combination of the above.



9. Overpayment recoveries from persons no longer eligible for benefits may be negotiated as follows:

(a) Lump sum repayment; or

(b) Monthly payments of a reasonable amount, given the circumstances of the person and the size of the overpayment; or

(c) A combination of (a) and (b).



10. Where initial recovery attempts have been non-productive, the Overpayment Coordinator may agree to suspend further recovery action if the overpayment is:

(a) $100, or less and if the client is no longer in pay and recovery would cost more than it is worth;

(b) Against a person who is or is about to become a resident of a nursing home or manor as described in Section 1(1)(q) of the Social Assistance Regulations and whose only income is OAS/GIS.



11. Worker error, as determined by the overpayment coordinator, may be considered sufficient reason not to create an overpayment if:

(a) The error was a mistake or failure to act on the part of the worker; and

(b) It is reasonable to assume the applicant would not have recognized the error.



PROCEDURE



12. The Department shall designate an "Area Overpayment Coordinator" to supervise, monitor and control the documentation and recovery of overpayments, and to advise of necessary corrective action or staff training of each Social Assistance office.



13. All overpayments shall be documented on an Overpayment Record, including opinions about the cause of the overpayment, by worker and Area Overpayment Coordinator. Generally, the cause will relate to one or more of the following:

(a) Failure to report a change in circumstances, income or expenses;

(b) Misunderstanding by applicant or worker;

(c) Possible attempts by applicant to defraud by withholding information or by providing incorrect information;

(d) Calculation or processing error by staff;

(e) Procedural error by worker;

(f) Error in applying regulation or policy;

(g) Misappropriation of funds (Refer to Policy 7-1);

(h) Advances where eligibility doesn’t exist;

(i) Retroactive payments received by applicant from any source, including CPP, EI, Worker’s Compensation, insurance settlements and pay equity settlements;

(j) Deposits such as required by Maritime Electric or Island Tel; and

(k) Monies paid for home repair, in excess of $5,000.



14. The following action is required if the person continues to receive benefits:

(a) The applicant shall be informed of the exact amount of the overpayment, the repayment obligation, and the repayment options available;



(b) The Area Overpayment Coordinator shall send a letter to the applicant confirming the amount and the method of the overpayment recovery,



(c) If an applicant is terminated from Social Assistance benefits before collection is completed, refer to Paragraph 15.



15. The following action is required for those persons no longer receiving benefits:

(a) The Overpayment Coordinator will attempt to obtain a repayment agreement by contacting the former applicant by mail within sixty days of the termination date. (Appendix "A");



(b) If the letter is returned, the Overpayment Coordinator will make a best effort to obtain a current address from: the former worker, the telephone book, the Common Client Index, etc. If a current address cannot be obtained by the coordinator, then the file will be referred to the Investigation and Auditing Services Section of the department.



(c) If there is no response from the first letter, the Overpayment Coordinator will send a second letter signed by the Manager of Finance and Audit. (Appendix "B").



(d) If there is no agreement reached within ninety days of the termination date, then the file will be referred to the Investigations and Auditing Services Section of the Department.



(e) The Overpayment Coordinator will monitor repayment commitments and payments and if an agreement is in default for two consecutive months will refer the file to the Investigations and Auditing Services section of the department.



(f) All outstanding overpayments shall remain on file so that the balance may be recovered from any future Social Assistance benefits until such time as the debt is written off as per sub-section (g) below.



(g) An annual review of accounts shall be completed by the Department in order to determine a list of accounts to be recommended for a write-off by the Lieutenant Governor in Council on the approval of Treasury Board. The current criteria (subject to change each year) for these write-offs are:

a) Applicants whose accounts have been inactive for a minimum of 6 years;

b) Applicants who are deceased and there is no possibility of collection from an estate;

c) Applicants who have declared bankruptcy and have not named the region or department as a creditor;

d) Applicants whose accounts are for less than $100.00 and have been inactive for more than 3 years.



16. Investigation and Auditing Services on receipt of referrals will:

a) Send a demand letter (Appendix C)



b) For returned letters, check for an updated address through the Common Client Index or similar means of locating address and then resend the letter to the new address.



c) Document responses and repayment schedules including the method of payment amount and location of payment.



d) Follow up by phone on those that do not respond and then document those that cannot be contacted as well as those not in a position to make payments.



e) Where necessary, make initial efforts to explain overpayments from the computer records and reports on file in the Social Assistance offices.



f) Receive and enter payments, send receipts and on a monthly basis, copies to the respective Social Assistance offices.



g) Monitor agreements, payments, and reports from the regions on a monthly basis, and contact by phone, those persons in default.



h) Proceed to judgment (Writ of Execution) with the issuance of a certificate in the Supreme Court and service on former applicants that are in default or have sufficient assets to warrant such action.



i) Report monthly to the Social Assistance office including repayment agreements, list of clients that cannot be contacted, and applicants that are at present, unable to make payments.



j) Notify the Social Assistance office when Investigation and Audit services are closing a file in terms of their activities to pursue an overpayment.



17. Where it appears that the overpayment has resulted from possible fraud by the recipient, refer to Instruction 7-5 (prosecutions).



18. OVERPAYMENT CONTROL:

(a) The Area Overpayment Coordinator is responsible for ensuring an up-to-date account of all overpayments including a history of all overpayment recoveries.



(b) Each Social Assistance office shall keep a separate record of overpayment numbers and their assignment to individual overpayments as they are discovered. Four items of data should be kept in this list:

(i) Overpayment numbers in sequence

(ii) Date assigned

(iii) Applicant’s name

(iv) Applicant’s file number



CROSS REFERENCES

3-14 Changes in Circumstances

7-5 Prosecutions

7-1 Misappropriation of Funds






Appendix “A”



(Regional Letterhead)

1st Letter



Date


Name and Address of
Former Client


Dear _____________:

Re: File # ______________

On review of your financial assistance file, it has come to my attention that there is an overpayment with a balance of ____________ owing to the Department of Social Services and Seniors.

As you are no longer receiving assistance, we need to discuss how the balance of the overpayment can be recovered. Please contact me (name) at (phone number).

Your cooperation in this matter will prevent this office from taking further action.

Sincerely,



Name
OP Coordinator






Appendix "B"



(Letterhead)

2nd Letter



Date

Name and Address of

Former Client



Dear _____________:



Re: File # ______________



It has come to my attention that you have not contacted Income Support to make arrangements to pay the overpayment that is on your Social Assistance file.



I urge you to contact (name of O/P Coordinator) at (phone number) to make arrangements to repay this debt.



If we have not heard from you within 15 days, your account will be passed on to Investigation and Auditing Services for collection. This action could include obtaining through the courts liens against your property, garnishment of income or other appropriate legal action.



Sincerely,



(name)



Supervisor of Finance and Audit

Department of Social Services and Seniors




Appendix "C"



(Letterhead)

Date

Name & Address of

Former Client



Dear:



Re: Social Assistance File # _____________



The Department of Social Services and Seniors is in the process of reviewing all inactive Social Assistance files that contain an unpaid debt. This debt is commonly referred to as an overpayment. Our records indicate an overpayment exists in your inactive file.



This overpayment is in the amount of $__________. Our records also indicate no payments are presently being made on this debt.



You are now required to contact __________ at __________ to discuss repayment of this debt. It is important that a plan be put in place to bring about an agreeable repayment method.



Failure to contact this office within fourteen days from the date of this letter could result in an action being filed in the Supreme Court of PEI. This action could result in a lien against your property, garnishment of income and a judgment being reported by the Credit Bureau of PEI.



We await your response within the 14 days.

Sincerely,



Case Auditor