California Department of Social Services - State Hearings Division
Notes from the Training Bureau - December 24, 1996

Item 96-12-03C
Aid to Families with Dependent Children (AFDC) Recouping Overpayments Caused By Administrative Error and Recipient Error

Question: If a current AFDC recipient received both an administrative error overpayment and a recipient error overpayment in different months, how does a county use grant adjustments(s) to recoup the overpayment?

Answer: A county may recoup each overpayment separately as either a recipient error or administrative error overpayment in the order each overpayment occurred.

Example 1: If a recipient received a $200 administrative error overpayment first and then a $300 recipient error overpayment, the county may first recoup the $200 overpayment using the formula for recouping administrative error overpayments. After the $200 administrative error overpayment is recouped, the county may begin recouping the $300 recipient error overpayment using the formula for recouping recipient error overpayments.

If the county recouped $175 before October (and determined the claimant’s maximum administrative error overpayment adjustment rate at $35 per month), in October the county may recoup the remaining $25 of the $200 overpayment and $10 of the $300 recipient error overpayment. Beginning in November, the county may begin recouping the balance of the $300 overpayment using the formula for recouping recipient error overpayments.

Example 2: If a recipient received a $200 recipient error overpayment first and then a $300 administrative error overpayment (and determined the recipient’s maximum recipient error adjustment rate at $70 per month and maximum administrative error adjustment rate at $35 per month), the county may recoup the $200 recipient error overpayment by $70 in month 1, $70 in month 2, and the $60 balance in month 3. The county may not begin recouping the administrative error overpayment in month 3 because the claimant’s maximum administrative error adjustment rate is $35 per month (for this example) and the county already recouped $60 in month 3.

If the same recipient had an unpaid balance of $25 for a recipient error overpayment before month 3, the county may recoup the $25 balance in month 3 and also recoup $10 of the administrative error overpayment in month 3 (without exceeding a maximum administrative error adjustment rate of $35 determined for this recipient). Beginning in month 4, the county may begin recouping the balance of the administrative error overpayment using the $35 monthly administrative error adjustment rate determined for this recipient.

Question: If a current AFDC recipient receives both an administrative error overpayment and a recipient error overpayment in the same month, how may a county recoup this overpayment by grant adjustments?

Answer: A county must compute the amount of the overpayment caused by administrative error and the amount of the overpayment caused by recipient error. Since MPP §44-352.4 allows counties to use the method of recoupment which provides the maximum recovery, a county may first recoup the recipient error portion of the overpayment and may then begin recouping the administrative error portion of the overpayment.