California Department of Social Services - State Hearings Division
Notes from the Training Bureau - May 13, 2008

Judges Must Write Decisions Evaluating Equitable Estoppel When Claimant Disputes Recoupment of CalWORKs Administrative Error Overpayment

Administrative error overpayments are a common issue in CalWORKs cases. In many instances, claimants are not disputing the existence of an overpayment, but are only disputing the county's right to recoup the overpayment. Where the claimant disputes the county's right to recoup an administrative error overpayment or overissuance, the judge must discuss equitable estoppel.

If a claimant is represented by a Legal Aid advocate, the authorized representative is likely to raise the issue of equitable estoppel. If the claimant is not represented or if the authorized representative is not a legal professional but is a friend or relative, it is unlikely that the claimant or representative on behalf of the claimant will mention the words "equitable estoppel'. It is not necessary for a claimant to specifically cite "equitable estoppel" for a judge to address the issue of equitable estoppel.

If a claimant simply says something like "it is unfair" or "I should not have to pay back the overpayment because I reported everything", then the judge should evaluate whether equitable estoppel should be applied.

Notes from the Training Bureau 01-01-2E dated January 16, 2001 sets out the CDSS policy on equitable estoppel. That policy is still valid except for a couple of changes that have occurred since that Notes was issued. The items in Notes from the Training Bureau 01-1-2E are modified as follows:

• It is indicated that judges should consider whether a recipient lost the right to apply for a Reduced Income Supplemental Payment (RISP) or Transitional Child Care (TCC). THIS IS NO LONGER ACCURATE except in old cases, because those programs no longer exist. RISPs ended in the month a county implemented quarterly reporting. TCC ended effective January 1, 1998.

• It states that: "the collection of overissuances has been broadly delegated to the states, so that the state can equitably preclude collection of an overissuance." THIS IS NO LONGER ACCURATE. In the unpublished decision of Vang v Healy, it was determined that equitable estoppel may not be applied in food stamp cases.

Notes from the Training Bureau 02-04-3 is titled: Equitable Estoppel Update.
It discusses the Vang case and also addresses decision writing in equitable estoppel cases.

All equitable estoppel overpayment decisions may be written as final decisions except cases involving overpayments in excess of $5000.

All Notes from the Training Bureau may be found on the State Hearings Division website.