475 Neb. Admin. Code, ch. 4, § 007

Current through September 17, 2024

Section 475-4-007 - COLLECTIONS

This section details the responsibilities and guidelines in regard to:

(A) Establishing overpayments and accounts receivable; and

(B) Collections on accounts receivable.

007.01ESTABLISHING OVERPAYMENTS. Thresholds have been established to determine whether or not to create an accounts receivable against a certified or non-certified household. The thresholds are determined by how the error was determined and whether or not the household is certified at the time the overpayment is discovered. Accounts receivable are established for:

(1) All overpayments determined by Quality Control;

(2) Certified households when the cumulative amount of the overpayment is $25 or more;

(3) Non-certified households when the cumulative amount of the overpayment is $125 or more; and

(4) The amount of the threshold for each type of household is applied at the time the overpayments are calculated.

007.01(A)TYPES OF OVERPAYMENTS. There are three types of overpayments:

(i) Administrative Error Overpayment: Any overpayment caused by the Department's action or failure to take action;

(ii) Inadvertent Household Error Overpayment: Any overpayment caused by a household's misunderstanding or unintended error; and

(iii) Intentional Program Violation Overpayment: Any overpayment caused by an Intentional Program Violation as adjudicated by:

(1) A disqualification hearing;

(2) A court of appropriate jurisdiction; or

(3) A household's signing of a waiver of the individual's right to a disqualification hearing.

007.01(B)CRITERIA FOR ESTABLISHING ADMINISTRATIVE ERROR OVERPAYMENTS. An overpayment will be established against any household that received an overpayment due to an Administrative Error within the last 12 months before the month of discovery. Instances of Administrative Error include, but are not limited to:

(i) Income, resources, or deductions which were computed incorrectly or otherwise caused an incorrect benefit amount;

(ii) Action that was not taken timely based on information known to the agency or reported by the household;

(iii) When incorrect policy or procedure was applied; or

(iv) When duplicate benefits were issued in error.

007.01(C)CRITERIA FOR ESTABLISHING INADVERTENT HOUSEHOLD ERROR OVERPAYMENTS. An overpayment will be established against any household that received an overpayment due to an Inadvertent Household Error within the last 12 months before the month of discovery. Action may be taken on an overpayment for which more than 12 months have elapsed; however, action cannot be taken on overpayments for which more than six years have elapsed between the month an overpayment occurred and the month the overpayment was discovered. The following are the most common overpayment situations caused by inadvertent household errors:

(i) Household misunderstanding or an unintended error resulting in the household either reporting incorrect information or failing to report information or changes; or

(ii) Household receiving continued benefits pending a fair hearing and the agency's decision was upheld.

007.01(D)CRITERIA FOR ESTABLISHING INTENTIONAL PROGRAM VIOLATION OVERPAYMENTS. Potential Intentional Program Violations will be reported to the Special Investigations Unit of the Department. Until a determination of an Intentional Program Violation has been made, the Accounts Receivable is processed as an Inadvertent Household Error.

007.01(D)(i)OVERPAYMENT PROCESSING PROCEDURES. In situations where a potential Intentional Program Violation may have occurred, overpayments are calculated back to the month the alleged Intentional Program Violation occurred up to six years from the date of discovery. If the alleged Intentional Program Violation was caused by the household's failure to report information timely, the overpayment will be calculated beginning with the month the change would have been effective if it had been reported in a timely manner. The first month of the overpayment cannot be more than two months after the change occurred.

007.01(E)TRAFFICKED BENEFITS. Overpayment amounts of trafficked benefits will be established based on reports from Food and Nutrition Service, Office of Inspector General or the Department of Health and Human Services Special Investigations Unit. Overpayments based upon trafficking or attempted trafficking of Supplemental Nutrition Assistance Program benefits will be established using the individual's admission, the adjudication, or the evidence of trafficking which may include evidence obtained from social media sites.

007.01(F)SITUATIONS WHEN OVERPAYMENTS ARE NOT ESTABLISHED. An overpayment is not established when:

(i) The agency failed to ensure that the household signed the application form;

(ii) A categorically eligible or an Expanded Resource Program eligible household has been overpaid benefits and there has been no change in the net income and/or household size;

(iii) The household is receiving benefits and the accumulated months of Inadvertent Household Error and/or Administrative Error overpayments total less than $25 and Quality Control or the Special Investigations Unit did not discover the error; or

(iv) The household is not receiving benefits and the accumulated months of Inadvertent Household Error and/or Administrative Error overpayments total less than $125 and Quality Control or the Special Investigations Unit did not discover the error.

007.02COLLECTING ACCOUNTS RECEIVABLE. The following policies and procedures apply to collection accounts receivables.

007.02(A)CRITERIA FOR INITIATING COLLECTION ACTION ON INADVERTENT HOUSEHOLD AND ADMINISTRATIVE ERROR ACCOUNTS RECEIVABLE. Action will be taken to initiate collection on all types of overpayments. Collection on accounts receivable will be done through recoupment from the household's benefit or by other collection actions.

007.02(B)CRITERIA FOR INITIATING COLLECTION ACTION ON INTENTIONAL PROGRAM VIOLATION ACCOUNTS RECEIVABLE. Intentional program violation overpayments are handled as inadvertent household error accounts receivable for collection purposes until a household member is found to have committed an intentional program violation through a disqualification hearing, in a court of appropriate jurisdiction or if the individual has signed a waiver to an administrative disqualification hearing.

007.02(C)INITIATING COLLECTIONS OF ACCOUNTS RECEIVABLE. For households currently receiving benefits, recoupment occurs automatically through a monthly benefit reduction beginning the first month possible considering ten day notice of adverse action. Benefits are not recouped from any prorated month. In cases where a household was found guilty of an intentional program violation or has signed a waiver to a disqualification hearing, collection will be initiated the first month possible. Households not currently certified receive monthly billing statements. If the accounts receivable becomes delinquent, repayment is undertaken through other collection actions.

007.02(C)(i)BENEFIT REDUCTION FOR INADVERTENT HOUSEHOLD ERROR OR ADMINISTRATIVE ERROR ACCOUNTS RECEIVABLE. The amount of the inadvertent household error or administrative error benefit reduction is the greater of ten percent of the household's monthly benefit or $10 unless the household agrees to a higher amount.

007.02(C)(ii)BENEFIT REDUCTION FOR INTENTIONAL PROGRAM VIOLATION ACCOUNTS RECEIVABLE. The amount of the monthly benefit reduction for intentional program violation is the greater of 20% or $20 unless the household agrees to a higher amount.

007.02(C)(iii)OTHER COLLECTION ACTIONS. In addition to benefit reduction for participating households, the following may also be used to repay overpayments:

(a) Cash payments either through installment payments or lump sum amounts;

(b) Treasury Offset Program;

(c) Offset of restored benefits;

(d) Public service if authorized by a court;

(e) State tax refunds;

(f) Wage garnishments;

(g) Lottery winnings;

(h) Property liens;

(i) Small claims court; or

(j) Unemployment Compensation Benefits intercept.

007.02(C)(iii)(1)ADDITIONAL COLLECTION METHODS. If the household's benefit is reduced, no other involuntary collection methods will be used unless the source of the payment is irregular and unexpected such as a state tax refund or lottery winnings offset.

007.02(C)(iii)(2)VOLUNTARY PAYMENTS. The household has the option to voluntarily enter into an agreement to repay the accounts receivable through an additional repayment method even though monthly Supplemental Nutrition Assistance Program benefits are being recouped.

007.03ESTABLISHING DELINQUENCY. An accounts receivable becomes delinquent when:

(1) There is no active recoupment;

(2) No collections have been received within 210 days from the date of the initial demand letter or post fair hearing notice;

(3) The accounts receivable has not been paid by the due date and a satisfactory payment arrangement has not been made. The due date is the date on the initial written notification or demand letter or post fair hearing notice-30 days from the mail date.Accounts Receivable remain delinquent until payment is received in full, a satisfactory payment agreement is negotiated or an allotment reduction is invoked; or

(4) An accounts receivable payment arrangement has been established but a scheduled payment has not been made by the due date. The due date is the date of the missed payment.

007.03(A)ACCOUNTS RECEIVABLE DELINQUENCY. The accounts receivable will remain delinquent until:

(i) Payment is received in full;

(ii) An allotment reduction is invoked;

(iii) The repayment schedule is resumed or renegotiated;

(iv) A good faith effort is determined; or

(v) The accounts receivable is compromised due to hardship.

007.03(B)ACCOUNTS RECEIVABLES NOT CONSIDERED DELINQUENT. Accounts Receivables will not be considered delinquent in the following situations:

(i) Another accounts receivable for the same household is currently being paid either through an installment agreement or benefit reduction and collection on the accounts receivable is anticipated to begin once the prior overpayment is settled;

(ii) Collection is being coordinated through the court system and the Department has limited control over the collection action; or

(iii) The accounts receivable is awaiting a fair hearing decision.

007.04ACTION TAKEN ON DELINQUENT ACCOUNTS. All accounts receivables that are legally enforceable and delinquent are submitted to the Treasury Offset Program as well as to other programs or agencies for further collection actions. Debtors will receive notice of impending referral to Treasury Offset Program.

007.04(A)SUSPENDED COLLECTION ON ACCOUNTS RECEIVABLE. An administrative error, inadvertent household error or intentional program violation accounts receivable will be suspended in the following situations:

(1) The household is nonparticipating;

(2) Delinquency of the accounts receivable has been established;

(3) At least one demand letter has been sent; and

(4) At least three billing statements have been sent to the household.

007.04(A)(i)TREASURY OFFSET PROGRAM ON SUSPENDED ACCOUNTS RECEIVABLES. Suspended accounts receivables will still be subject to Treasury Offset Program collection and automatic recoupment if the responsible party becomes eligible for benefits.

007.04(B)TERMINATED COLLECTION ON ACCOUNTS RECEIVABLES. An administrative error, inadvertent household error, or intentional program violation accounts receivable will be terminated and written off in the following situations:

(i) The accounts receivable has been in suspended status for three or more years with no active collection;

(ii) All adult household members have died;

(iii) The accounts receivable balance is $25.00 or less and there are no accounts receivables existing that would result in an aggregate of accounts receivables to be greater than $25.00 and the accounts receivable has been delinquent for 90 days or more; or

(iv) The household cannot be located.

007.04(C)COMPROMISING AN ACCOUNTS RECEIVABLE. An administrative error, inadvertent household error, or intentional program violation accounts receivable will be compromised in the following situations:

(i) The Department will compromise an accounts receivable or a portion of an accounts receivable if it is reasonably determined that a household's economic circumstances dictate that the accounts receivable will not be paid in three years; or

(ii) The full amount of an accounts receivable, including any compromised amount, will be used to offset benefits.

007.05CHANGE IN HOUSEHOLD COMPOSITION. Collection action will be taken against any or all of the adult household members at the time the overpayment occurred. If a change in household composition occurs, the accounts receivable may be collected from any household which contains an original adult member of the household which received the overpayment. Offsetting the amount of the accounts receivable may also be done against restored benefits owed to any household which contains an adult member of the original household at the time the overpayment occurred. The amount collected will never exceed the amount of the accounts receivable.

475 Neb. Admin. Code, ch. 4, § 007

Amended effective 5/21/2016.

Amended effective 7/4/2020

Amended effective 9/17/2024