607-4          COLLECTING PAYMENT ON CLAIMS

The Claims Unit takes all  SNAPSupplemental Nutrition Assistance Program claim collection actions.  The Claims Unit sends demand letters, receives repayment agreements, collects repayments and completes action to suspend, terminate, or close a claim.

For claims collection in households with sponsored aliens see MS 605-2A and 607-5.

607-4 A.     REPAYMENT LETTER AND AGREEMENT

A demand letter with a repayment agreement is sent to the household for every established client error and IPVIntentional Program Violation claim and every agency error claim.  Demand letters are not sent if the claim is pended or terminated.

The household must respond to the request for payment and establish a repayment schedule.  The household may request renegotiation of the repayment agreement at any time.  However, the Claims Unit will only renegotiate if it agrees that changed circumstances warrant a revised repayment schedule.

607-4 B.     METHODS OF REPAYMENT

The household will be given an opportunity to choose a repayment method.  Repayment will be by cash, check, money order, allotment reduction, or by SNAPSupplemental Nutrition Assistance Program benefits.  Repayments submitted to a district office must be forwarded to the Claims Unit.  See Administrative Procedures Manual section 111-7.  

1. Lump Sum

Claims will be collected in one lump sum whenever possible.

2. Installments

Payment may be in regular installments if the household is financially unable to pay the claim in one lump sum.  The Claims Unit will develop an installment plan to collect the full amount of the claim in as short a time as possible.  Once the amount is determined, it remains unchanged unless the Claims Unit or the client initiates renegotiation of the payment schedule.

3. Allotment Reduction

Any household still participating in the program will have their allotment reduced to repay the claim.

EISEligibility Information System calculates these allotment reductions.

The reduction amount will be:

• Intentional program violation claims (fraud): 20 percent of the household's allotment or $20, whichever is greater.

• Client error and agency error claims: 10 percent of the household’s allotment or $10, whichever is greater.

607-4 C.     FAILURE TO RESPOND TO DEMAND LETTER

Participating households not responding to a demand letter will have their allotments reduced beginning with the next monthly benefit.  These households will not receive another notice of adverse action.

For households not currently participating, the Claims Unit will pursue other methods of collection.

607-4 D.     STATUS OF CLAIMS

An established claim is considered active until it is pended, terminated or closed by the Claims Unit, regardless whether a repayment agreement is signed or repayment is made.  The Claims Unit terminates claims when collection attempts have proven unproductive or not possible.  All restored benefits due a household must be used as payment to offset active claims.

1. Pended Claims

The Claims Unit suspends a claim when the household disputes the reason and/or amount of the overpayment and requests a fair hearing.  The claim remains in pended status until the fair hearing decision is rendered.

2. Termination of Claims

A claim is terminated when no payments are made for three years.  Claims with no payments are terminated three years from the date of establishment.

3. Closure of Claims

A claim is closed when the total overpayment is repaid.

607-4 E.     INTERSTATE CLAIMS COLLECTION

If a household moves out of Alaska, the Claims Unit will pursue collection action against the household for an overpayment that occurred while the household was in Alaska.

The state that overpaid benefits to the household shall have the first opportunity to collect the overpayment.  However, if that state does not take prompt action to collect, then the state from where the household recently moved can initiate action to collect the overpayment.