Calculating Underpayments 430-05-90-20

(Revised 11/01/13 ML3384)

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If a household was eligible but received an incorrect benefit, an underpayment is calculated only for those months the household participated. After correcting the loss for future months the worker must calculate the underpayment as follows:

1. If a household’s application was denied in error, the month the underpayment initially occurred is the month of application.
2. If a household filed a timely application for review and it was denied in error, the month of underpayment is the month following the expiration of the household’s review period.
3. If an eligible household’s application was delayed by the worker, the month of underpayment is the month of application.
4. If a household’s benefits were terminated in error, the month of underpayment is the first month benefits were not received.

An underpayment is calculated for each month beginning with the first month incorrect benefits were issued to:

• The first month the error has been corrected.
• The first month the household is found ineligible.

In cases where there is insufficient information to determine eligibility, the worker must advise the household of what information is needed to determine eligibility. The F813 - Request for Information on a Closed Case must be sent requesting circumstances for each benefit month there is insufficient information to determine eligibility.  For each month the household cannot provide the necessary information to determine eligibility, the household is ineligible.

 

Exception:

If expenses are not provided the expense is not allowed in determining the underpayment.  

 

For the months the household was eligible, the worker must calculate the benefit the household should have received. If the household received a smaller benefit than it was eligible to receive, the difference between the actual and correct benefits equals the underpayment.

 

If the case has been closed since the incorrect denial or closure, the case must be reverted to open.  If the case has been reopened since the incorrect denial or closure, benefits must be manually calculated using actual month circumstances and an underpayment must be added and authorized for each month the household is eligible for a benefit.

 

When a household is entitled to underpayments for a period of time in which the review would have expired, an application for review must be completed.  The application for review is registered as an application for review the month the original review period expired.

 

When completing corrective action on a case, corrective action must be established based on the reporting requirement the household was subject to when the error occurred or should have been subject to if the incorrect reporting requirement was applied.

 

When completing an underpayment, circumstances that should have been used at initial certification, review, or when a change was reported/discovered or should have been reported that required action must be used for the eligibility item(s) determined to be in error, taking into consideration any other changes reported during that time.  If income conversion applies, the corrected converted amount from the initial month or review (not corrected converted income from each month in error) must be used to determine the underpayment, taking into consideration any other changes reported during that time.