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Recoveries


Procedures

Overpayments on Open Cases: February 18, 2013

Overpayments on Closed Cases: November 19, 2012

Child in the Home of a Relative Overpayments: September 17, 2009

Write-Off/Extinguishment: September 17, 2009

Specific Types of Overpayments: November 19, 2012

Suspending Recovery from Comforts Allowance: January 26, 2007

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Overpayments on Open Cases: February 18, 2013
February 18, 2013

Overpayment Process Overview (Open Case)

To process an overpayment on an open case, follow these steps (see below for details on each step):

  1. Determine if the overpayment is due to ministry or client error
  2. Determine if the overpayment is to be referred to PLMS
  3. Collect information
  4. Calculate the overpayment amount
  5. Notify client (includes opportunity to respond, right to reconsideration, and sanction)
  6. Add debt to case
  7. Send a Ministry Error Recording Form (IOs only) (if applicable)
  8. Add sanction (if applicable)
  9. Attach all documents to the Service Request
  10. Update PLMS System (IOs only)

1.  Determining Ministry or Client error (Open Case)

To determine if the debt is due to ministry or client error:

  1. Review, in relation to the overpayment, the original application, re-application, and monthly reports (HR0080, HR0080R, and HR0081)
  2. Confirm if client accurately and completely declared their income, assets, and/or circumstances related to the overpayment
  3. Review, in relation to the overpayment, the ministry’s actions on the case
  4. A client error overpayment occurs when the client does not accurately and completely declare their income, assets, or circumstances and receives assistance they are not eligible to receive 
  5. A ministry error overpayment occurs when the client accurately and completely declares their income, assets, or circumstances, but the ministry makes an error that results in an overpayment. Ministry errors include, but are not limited to:

    • Typographical entry errors
    • Not entering declared income
    • Not updating shelter, family composition, or other information declared by the client
    • Issuing assistance or supplements outside of the regulation
    • Providing inaccurate information to a client regarding their reporting obligations (resulting in a client not declaring income, assets, or circumstances that affect eligibility)
  6. Note: Debt is not considered ministry error in situations where the client has a duty to report and does not. For example:

    • A client receives a confirmed job supplement, but the ministry does not set a notification or signal to review earnings in the following month and the client does not declare their earnings. The overpayment is due to client error. In such cases, although the ministry may have prevented the overpayment by using a notification or signal, the client has a legal obligation to declare their income and the overpayment is therefore due to client error.

2.  Referring Overpayments to PLMS (Open Case)

EAWs are to refer to PLMS all overpayments that relate to earned income or WCB temporary wage loss replacement payments where the client and/or their spouse is participating in the Annualized Earnings Exemption.

EAWs are to refer the case to PLMS for review if the overpayment is due to client error and:

  1. the estimated amount is greater than three months’ assistance for the family unit
  2. is due to duplicate assistance (collecting on more than one case or under more than one name), an alleged spousal or dependency relationship, or identity theft
  3. there are previous client-error overpayments on the case or
  4. there is an open Investigation associated with the case

[For PLMS referrals, see Verification and Eligibility – Loss Management – Referral for PLMS Review or Investigation].

3.  Collecting Information (Open Case)

To collect the information required to calculate the debt, EAWs or IOs may complete any or all of the following steps:

  1. If information from the client is required to calculate the debt, contact the client by phone or letter to request the information

    • Staff may request an appointment for the client to provide and discuss the information, or may request the client fax, mail, or drop off the information without an appointment
    • EAWs use the HR3231 and HR3049 if requesting an appointment or the HR3031 if requesting the client provides information without an appointment
    • IOs use the HR3194 (A or B) if requesting an appointment, or the HR3196 if requesting the client provide information without an appointment
    • Staff may offer to obtain information directly from third parties (such as employers) to assist the client. [See Related Link – Program Administration: Individual Case Management: Policy – Staff Assisting Clients]
  2. Obtain documents (such as pay records or bank statements) from third parties only after the client has not responded to requests to provide the information, has not provided the information within the specified timeframes, or after the client has agreed to the EAW or IO’s assistance in obtaining the information from the third party.
  3. Conduct all third-party checks that may relate to the overpayment, such as Equifax, ICBC, BC Online, Student Loan Match, Web AOB, etc.
  4. Gather all relevant documentation from the case, including the application or re-application (HR0080 or HR0080R), monthly reports (HR0081), and documentation (such as paystubs, shelter documents, or other documents applicable to the overpayment). Review the monthly reports relevant to the overpayment to identify what the client declared.

Note: If mail is returned by the post office or courier, it is necessary to verify the client’s residential address to confirm their eligibility for ongoing assistance. Make a notation and follow regional protocols for contacting the client.

4.  Calculating Overpayments (Open Case)

To calculate overpayments on open cases, complete the following steps:

  1. Using the available evidence, calculate the overpayment using the web-based Overpayment Calculator (OPC) tool. The calculation must be substantiated with supporting documentation.
  2. In cases where the Overpayment Calculator is unavailable, EAWs may use the manual Overpayment Chart (HR2179). If time permits, delay calculating the overpayment until the OPC is available. IOs must use the OPC for all overpayments.   
  3. Apply the policies on asset limits and earnings exemptions. [see Related Link – Policy – Overpayment due to undeclared asset and Overpayment due to undeclared earnings]
  4. Follow regional process for supervisor or peer review of the overpayment chart.
  5. For details on calculating overpayments, see below: Specific Types of Overpayments.

5.  Notifying the Client (Open Case)

Note: if there is a spouse on the case, all notifications and correspondence must be addressed to both the client and the spouse. If the client attends an appointment and receives documents without the spouse present, the EAW or IO must mail copies of all documents to the spouse to ensure they are also advised of the overpayment and their right to reconsideration. 

  1. Contact the client by phone or mail (using the HR3042 or HR3043) to set up an appointment time to discuss the overpayment and the monthly repayment amount. (IOs may also use the HR3194A or HR3194B.) Encourage all clients, especially those who have a disability, are aged, or have barriers to communication, to be accompanied by a friend, family member or advocate, in order to ensure they fully understand the overpayment.  [For language barriers, see Related Links – Individual Case Management – Policy and Procedures – Interpretation Services, for letters and forms, see Related Links – Recoveries – Policy – Letters and Forms.]
  2. In cases where phone contact is made but clients indicate they do not wish to discuss the overpayment on the phone or in person, staff must follow up by sending a letter requesting the client attend an appointment to discuss the overpayment (HR3042 or HR3043). This is to ensure the client understands the nature of the overpayment and has an opportunity to review the information. 

    Note: If a draft unsubmitted overpayment chart is provided in advance of the appointment, staff should circle the word “Draft” on the form to indicate to the client that the calculation is not final.
  3. If the client does not attend the appointment, ministry staff:

    1. complete the calculation of the overpayment and submit the chart
    2. add the debt to the case and (if applicable) enter the sanction
    3. mail the HR3092 (Overpayment Notification) and the final (submitted) Overpayment Chart to the client
    4. mail the HR3163 (for PWD) or HR3164 (non-PWD) to advise of the sanction (if applied)
    5. PLMS staff may also mail the HR3199 (Notice of Decision – Overpayment) to provide additional details regarding the overpayment
  4. If the client attends an in-person appointment:

    1. Confirm the client’s identity by:

      • reviewing the photo identification produced
      • reviewing the photo identification on the case or contact, or
      • if no photo identification is available, noting on the case a detailed physical description of the individual(s) and obtaining personal information that may be verified
    2. Advise the client of the purpose of the meeting and that they may leave the meeting at any time.
  5. If the client prefers to discuss the overpayment on the phone, verify their identity by reviewing personal details from the client case. Advise the client that the overpayment chart and supporting documentation will be mailed to them along with an Overpayment Notification.
  6. Clearly explain the reason for the overpayment and ensure that the client has an opportunity to respond or to provide additional information that may affect the overpayment calculation.  [see Policy – Overpayments – Administrative Fairness] [For minimum repayment amounts, see Rate Tables – Minimum Monthly Repayment Amounts.]
  7. Explain the Overpayment Notification (HR3092).
  8. Explain the recovery process.
  9. Advise the client of their right to reconsideration of the overpayment decision.
  10. If a sanction for inaccurate or incomplete reporting will be applied, advise the client of the amount and duration of the sanction and give them the opportunity to provide information that may affect the decision to impose the sanction. Explain that the sanction is a separate decision from the overpayment, and that they may request a reconsideration.
  11. Make notes on the case to document the conversation and confirm that the right to reconsideration was provided for both the overpayment and the sanction.

6.  Adding Debt (Open Case)

Note: in cases where the client has attended an appointment to discuss the overpayment, the debt should be added to the case at that time, unless additional time is required to adjust the amount of debt based on new information. Adding the debt while the client is present will enable the Overpayment Notification and Overpayment Chart to be provided to the client in person. If the client is not present when the Overpayment Notification is generated, mail it to them.

  1. Enter the overpayment information on the MIS system.  This will automatically generate the Overpayment Notification (HR3092) form. On the MIS RAD A screen, enter the debt amount using Code 3 for Ministry Error or Code 2 for Client Error. 
  2. If the debtor is under the age of 19 years, record the overpayment on MIS as ‘debt claimed’ (code 13) providing there is solid evidence to support the overpayment calculation. IOs record debt claimed overpayments in the ‘Unconfirmed Debt’ field on the PLMS system.
  3. Submit the Overpayment Chart in the Overpayment Calculator system at the same time as the debt is added to the case. Comments and a confirmation message will be automatically placed on the case when the chart is submitted.
  4. Review the Overpayment Notification Form with the client

    • Note: The client’s signature on the Overpayment Notification is a confirmation that he or she has been notified of the overpayment and the right to reconsideration. It is not an acknowledgement of debt and does not affect the client’s right to ask for reconsideration. If the client is unwilling to sign the Overpayment Notification, make note that the client was given the Overpayment Notification but did not sign it.
    • If there are two recipients on the case, it is preferable that both sign the Overpayment Notification
  5. Ask the client to sign the Overpayment Notification Form, and witness the signature.  Note:  The client signature may be witnessed by trusted third parties:

    • other government staff
    • prescribed health professionals (see EAPWD Regulation, Section 2.2)
  6. Provide a copy of the Overpayment Notification Form and a copy of the  Overpayment Chart to the client
  7. IOs – update the PLMS system
  8. Make notes on all the interactions with the client, evidence and decisions pertaining to the overpayment.

7.  Send a Ministry Error Reporting Form, if applicable (IOs only), (Open Case)

IOs only: If the overpayment was a result of a ministry error, IOs complete a “Ministry Error Reporting Form” and forward it to their Supervisor. This form is available on the PLMS Homepage.

8.  Add Sanction (Open Case)

Sanctions are applied in cases of overpayment due to client error. Determine if a sanction is to be applied. [For more information, see Related Link – Verification and Eligibility – Sanctions.]

9.  Attach Documents (Open Case)

Scan and profile all documents related to the overpayment to the Service Request (Overpayment Chart, supporting documentation, signed Overpayment Notification, and all correspondence mailed to the client).

10.  Update PLMS System (PLMS staff only)

PLMS staff enter details of the overpayment in the PLMS system.

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Overpayments on Closed Cases: November 19, 2012
November 19, 2012
  1. In cases where a debtor is no longer receiving assistance and contacts the ministry to discuss a recorded overpayment, refer them to Financial and Administrative Services Branch (FASB).  [see Contacts]
  2. In cases where a debtor attends an office to make a payment (cash, cheque, or money order) on a debt, verify in the system that a debt exists. Provide a receipt for the payment specifying the type of payment and forward the payment to FASB using the approved process. Include the Case Number and the name of the person making the payment on the receipt. [see Contacts]
  3. In cases where a former client contacts the ministry to disclose that a previously unrecorded overpayment occurred, record the details on an allegation in the Fraud Allegation Reporting System (FARS). Make note on the allegation that the client has come forward with this information on a closed case. Forward any documentation provided by the client to PLMS.  
  4. Refer new allegations of overpayments on closed cases to PLMS by completing an allegation on the Fraud Allegation Reporting System (FARS).

Overpayment Process (Closed Case – PLMS)

EAWs are to refer all overpayments on closed cases to PLMS.

For closed files, IOs are to see Compliance Review > Procedures and must obtain Supervisor approval prior to initiating the overpayment process on a closed case.

The following steps are followed by PLMS staff only (see below for details on each step):

  1. Determine if the overpayment is due to ministry or client error
  2. Collect information
  3. Calculate the overpayment amount
  4. Add alert if overpayment amount cannot be calculated
  5. Notify client (includes opportunity to respond, right to reconsideration, and sanction)
  6. Add debt to case
  7. Send a Ministry Error Reporting Form (if applicable)
  8. Add alert for sanction
  9. Attach all documents to the Service Request
  10. Update PLMS System
1.

Determining Ministry or Client Error (Closed Case – PLMS)

To determine if the debt is due to ministry or client error:

  1. Review, as applicable to the overpayment, the original application, re-application, and monthly reports (HR0080, HR0080R, and HR0081).
  2. Confirm if client accurately and completely declared their income, assets, and/or circumstances related to the overpayment.
  3. Review, as applicable to the overpayment, the ministry’s actions on the case.
  4. A client error overpayment occurs when the client does not accurately and completely declare their income, assets, or circumstances and receives assistance they are not eligible to receive. 
  5. A ministry error overpayment occurs when the client accurately and completely declares their income, assets, or circumstances, but the ministry makes an error that results in an overpayment. Ministry errors include, but are not limited to:

    • Typographical entry errors
    • Not entering declared income
    • Not updating shelter, family composition, or other information declared by the client
    • Issuing assistance or supplements outside of the regulation
  6. Note: Debt is not considered ministry error in situations where the client has a duty to report, and does not. For example:

    • A client receives a confirmed job supplement, but the ministry does not set a notification or signal to review earnings in the following month and the client does not declare their earnings. The overpayment is due to client error. In such cases, although the ministry may have prevented the overpayment by using a notification or signal, the client has a legal obligation to declare their income and the overpayment is therefore due to client error.
2.

Collecting Information (Closed Case – PLMS)

To collect the information required to calculate the debt, IOs may complete any or all of the following steps:

  1. If information from the client is required to calculate the debt, contact the client by phone or letter to request the information.

    • IOs may request an appointment for the client to provide and discuss the information, or may request the client fax, mail, or drop off the information without an appointment.
    • IOs use the HR3194 (A or B) if requesting an appointment, or the HR3196 if requesting the client provide information without an appointment.
  2. Gather all relevant documentation from the case, including the application or re-application (HR0080 or HR0080R), monthly reports (HR0081s), and documentation (such as paystubs, shelter documents, or other documents applicable to the overpayment). IOs review the monthly reports relevant to the overpayment to identify what the client declared.
  3. On-line third-party checks (Equifax, ICBC, BC Online, Student Loan Match, Web AOB, etc) must not be conducted on closed cases. Third parties such as employers, landlords, or banks may be contacted. The IO must request information from third parties in writing (by letter or fax) with the client consent attached, and must ensure the request specifies the time period during which the client was in receipt of assistance. Third parties may not be contacted unless attempts have first been made to contact the client to give them the opportunity to provide the information directly.
3.

Calculate the Overpayment Amount (Closed Case – PLMS)

To calculate overpayments on closed cases, complete the following steps:

  1. Using the available evidence, calculate the overpayment using the web-based Overpayment Calculator (OPC) tool. The calculation must be substantiated with supporting documentation.
  2. Apply the policies on asset limits and earnings exemptions. [see Related Link – Policy – Overpayment due to undeclared asset and Overpayment due to undeclared earnings]
  3. Follow regional process for supervisor or peer review of the overpayment chart.
  4. For details on calculating overpayments, see Specific Types of Overpayments.
4.

Add Alert if the Overpayment Amount Cannot be Calculated (Closed Case – PLMS)

If there is evidence of an overpayment on a closed case, but insufficient details are available to calculate the debt amount, the IO is to place an Eligibility Alert on the contact to ensure the situation is revisited if the client returns to assistance in the future. An example of a situation where this would be necessary is:

A client was on assistance all of 2009 and 2010 and did not declare any earnings. A Canada Revenue Agency (CRA) data match reveals that the client declared $5,000 earnings to CRA in 2009, and $8,000 in 2010. The file is closed and the client cannot be contacted. Although there is strong evidence that an overpayment occurred, the details on net income received in each month are not available, therefore, an overpayment cannot be calculated.

In these situations, the IO is to make detailed notes on the Service Request and the CRV, and note the Service Request number in the Eligibility Alert information.

Note: the IO must make reasonable efforts to obtain the information in order to calculate and establish the debt. For example, if the IO is able to contact the client, they can inquire as to where they were working or ask them to provide payslips. If the employer is known, the IO may be able to obtain the pay records from the employer.

If it appears the overpayment is substantial, a referral to an MI should be considered.

5.

Notifying the Client (Closed Case – PLMS)

  1. Prior to sending any correspondence to the last known address, the IO must attempt to verify the address by phoning the client. The IO may check on the contact for an updated phone number. If unable to contact the client, correspondence is to be sent to the last case address reported to the ministry. Correspondence is not to be mailed if the last address reported was No Fixed Address (NFA).
  2. Contact the client by phone or mail to set up an appointment time to discuss the overpayment and the monthly repayment amount. Encourage all clients, especially those that have a disability, are aged, or have barriers to communication, to be accompanied by a friend, family member or advocate, in order to ensure they fully understand the overpayment.  [For language barriers, see Related Link – Individual Case Management – Policy and Procedures – Interpretation Services, for letters and forms, see Recoveries – Policy – Letter and Forms]
  3. In cases where phone contact is made but clients indicate they do not wish to discuss the overpayment on the phone or in person, staff must follow up by sending a letter requesting the client attend an appointment to discuss the overpayment (HR3042 or HR3043). This is to ensure the client understands the nature of the overpayment and has an opportunity to review the information.
  4. If the client attends an in-person appointment:

    1. Confirm the client’s identity by:

      • reviewing the photo identification produced
      • reviewing the photo identification on the case or contact, or
      • if no photo identification is available, noting on the case a detailed physical description of the individual(s) and obtaining personal information that may be verified
    2. Advise the client of the purpose of the meeting and that they may leave the meeting at any time.
  5. If the client prefers to discuss the overpayment on the phone, verify their identity by reviewing personal details from the client case. Advise the client that the overpayment chart and supporting documentation will be mailed to them along with an Overpayment Notification.
  6. Clearly explain the reason for the overpayment and ensure that the client has an opportunity to respond or to provide additional information that may affect the overpayment calculation.  [see Policy – Overpayments – Administrative Fairness] [For minimum repayment amounts, see Rate Tables – Minimum Monthly Repayment Amounts.]
  7. Explain the Overpayment Notification (HR3092).
  8. Explain the recovery process.
  9. Advise the client of their right to reconsideration of the overpayment decision.
  10. Advise the client of the amount and duration of the sanction for inaccurate or incomplete reporting (unless the overpayment was due to ministry error) and give them the opportunity to provide information that may affect the decision to impose the sanction. Advise the client that the sanction will be applied if they return to assistance. Advise that the sanction is a separate decision from the overpayment, and may also be reconsidered.
  11. Make notes on the case to document the conversation and confirm that the right to reconsideration was provided for both the overpayment and the sanction.
  12. If the client does not attend an appointment to discuss the overpayment in person or on the phone, ministry staff are to mail the HR3092 (Overpayment Notification) and the Overpayment Chart to advise the client of the overpayment, and either the HR3163 (for PWD) or HR3164 (non-PWD) to advise client of the sanction (if applied). PLMS staff may also mail the HR3199 (Notice of Decision – Overpayment) to provide additional details regarding the overpayment.
  • Note: The overpayment chart should be “submitted” in the Overpayment Calculator system before it is provided to the client. In cases where a draft of the chart is provided in advance of the appointment to discuss the overpayment, staff should circle the word “Draft” on the form to indicate to the client that the calculation is not final.  

Notifications of overpayments on closed cases should be sent using Registered mail. If the Registered mail is not picked up, the IO should send the package again by regular mail.  If the regular mail is not returned after one week, it can be assumed that it was delivered to the debtor (Supreme Court Rules deem this as delivered unless there is evidence to the contrary). The 20 day reconsideration period begins at this time.[see Related Link – Decisions, Reconsideration and Appeal]

6.

Adding the debt (Closed Case – PLMS)

Where the IO was able to contact the client: 

  1. Record the overpayment amount on the MIS RAD A screen using Code 03 (Overpayment Client Error) or Code 02 (Overpayment Ministry Error). MIS will automatically generate the Overpayment Notification – Closed or MSO (HR3092A) form. The HR3092A instructs the client to contact a toll-free number to negotiate monthly repayment terms.
  2. Enter the entire debt amount in the Monthly Repayment amount field on the RAD A screen. 
  3. Submit the Overpayment Chart in the Overpayment Calculator when adding the debt to the case.
  4. A debt is referred to as “established” when client contact has occurred. IOs record overpayments established through their compliance reviews in the Overpayment fields on the Eligibility tab of the PLMS System.

Where the IO was not able to contact the client:

  1. If the meeting request letters are not returned by the post office and clients either do not respond to the letters or they refuse to meet with staff to discuss the overpayment, the overpayment should be recorded as Ministry Error (code 02) or Client Error on MIS (code 03) providing staff have solid evidence to support the overpayment calculation. Send the client a Notice of Decision – Overpayment letter (HR3199) [see Forms and Letters].
  2. If correspondence requesting to meet with a client regarding a Client Error overpayment on a Closed case is returned  marked 'moved' or 'unknown' and a new address cannot be located,  record the overpayment on MIS as 'debt claimed' (code 13) providing there is solid evidence to support the overpayment calculation. MIS generates a Printed Record when debt code 13 is entered on the RAD screen.
  3. IOs record debt claimed overpayments in the ‘Unconfirmed Debt’ field on the PLMS system.
  4. Add an Eligibility Alert to advise the client of the debt and their right to reconsideration when they next make contact with the ministry.
  5. Submit the Overpayment Chart in the Overpayment Calculator when adding the debt to the case.

Debtors under 19 years of age:

If the debtor is under the age of 19 years, record the overpayment on MIS as ‘debt claimed’ (code 13) providing there is solid evidence to support the overpayment calculation. IOs record debt claimed overpayments in the ‘Unconfirmed Debt’ field on the PLMS system.

7.

Send Ministry Error Reporting Form (if applicable) (Closed Case – PLMS)

If the overpayment was a result of a ministry error, complete a “Ministry Error Reporting Form” and forward it to your Supervisor. This form is available on the PLMS Homepage.

8.

Adding an Eligibility Alert for Sanction (Closed Case – PLMS)

Sanctions for inaccurate or incomplete reporting are not added to closed cases. Place an Eligibility Alert on the contact(s) to ensure the sanction is applied if the case re-opens. If the IO was unable to contact the client to advise of the debt and their right to reconsideration, the Alert must also make note to take these steps the next time the client contacts the ministry. 

9.

Attach documents to Service Request (Closed Case – PLMS)

Scan and profile all documents related to the overpayment to the Service Request (Overpayment Chart, supporting documentation, signed Overpayment Notification, and all correspondence mailed to the client).

10.

Update PLMS System (Closed case)

PLMS staff enter details of the overpayment in the PLMS system.

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Child in the Home of a Relative Overpayments: September 17, 2009
September 17, 2009

Recording Child in the Home of a Relative Overpayments resulting from undeclared parental contributions

This overpayment occurs when the relative caregiver does not declare contributions made by the child’s parent(s). 

  1. Overpayments resulting from failure to deduct parental contributions from the CIHR’s monthly rate constitute a claim of overpayment against the CIHR (i.e., the child recipient).  Because the ministry cannot legally advance a claim or pursue recovery from a minor, do not record an overpayment in this situation. 
  2. Reduce the ongoing benefits and inform the EAW of the parental contributions.

Overpayment resulting from assistance paid to relatives for children not in their care

This overpayment occurs when the CIHR child is not actually in the care of the relative caregiver, or the caregiver does not meet the regulatory requirements.  The relative caregiver is responsible for this overpayment.

  1. Complete a manual Overpayment Notification (HR3092A) and ensure the following information is documented on the form.

    • relative caregiver's full name, address, SIN and date of birth;
    • CIHR child’s given and surname;
    • CIHR –case number.
  2. Send a Request to Record Non-MIS Debt memo explaining the origin of the overpayment along with the Overpayment Notification (HR3092A) to FASB [see Contacts] for recording on the FMIS accounting system and collection action.

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Write-Off/Extinguishment: September 17, 2009
September 17, 2009
  1. Send a Request for Debt Review memo with supporting documentation to FASB.  If the case is Open, send a copy of the memo to the Supervisor of the office where the case is held. 
  2. FASB reviews the documentation and may consult with PLMS Operations Manager (OM) if clarification is required.  If the client has information relevant to the calculation that was not previously considered, FASB may request that the OM meet with the client prior to FASB making a determination.

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Specific Types of Overpayments: November 19, 2012
November 19, 2012

Undeclared Income

Note: Debt calculations for ministry error overpayments due to inaccurate entry of income declared by the client are processed the same as calculations for undeclared income.

  1. Determine if income is earned or unearned according to Schedule B and whether an exemption is applied.  [see Resources for Staff : Guidelines – Applying Earning Exemptions]
  2. Earnings exemptions are applied to undeclared earnings based on the client’s eligibility for exemptions at the time the earnings were received. The Overpayment Calculator is programmed to include the applicable exemption amounts. Staff are to verify the client’s status (PWD, PPMB, etc) and select the appropriate exemption in the OPC for each month in the overpayment period.

    • Example: A PWD client earns $985 in March 2012; they do not report this income and receive $906 for May. The client would have been eligible for a $500 earnings exemption if the income had been declared for May 2012 assistance. When calculating the overpayment, the exemption is applied. The overpayment is $485 ($985 earnings – $500 exemption = $485 income to deduct; $906 assistance – $485 deduction = $421eligibility; eligible for $421, received $906 = $485 overpayment).
  3. The amount of the overpayment for each month cannot exceed the amount of assistance issued.

    • Example: a single person earns $710 income in March 2012, they do not report this income and receive $610 for May. The overpayment is $610 for May.
  4. The amount of an overpayment for a month may exceed the amount of unreported income only when:

    • the client received supplements, and
    • their income (after any earning exemption the person was eligible for is applied) exceeded the basic support and shelter rate, rendering the client ineligible for the supplements.

      Example: a single person receives $610 support and shelter and a $40 diet supplement for May 2011. They received $630 income in March 2011 and did not report the income. The overpayment is $650. Since their income exceeded the basic support/shelter amount, they were not eligible for income assistance and consequently not eligible for a diet supplement.
  5. In calculating the overpayment amount apply the reporting period.  The Monthly Report (HR0081) should be used as evidence the client did not report, unless the monthly report was not submitted (for example where the client has the PWD designation and is not required to submit the HR0081 in order to receive assistance, there may not be an HR0081 available).

    • Example: Income received in March affects assistance issued for May.
  6. Ministry staff must only calculate overpayments due to undeclared income if there is sufficient supporting documentation available.  Supporting documentation must include the following:

    • Dates or time period of payment
    • Name and address of employer or source of income, and
    • Amount of NET earnings or income received
  7. Gather all supporting documentation pertaining to the overpayments.  Supporting documents may include but are not limited to:

    • Pay-stubs
    • Record of Employment forms
    • T4s, T5s and other tax information
    • Bank statements that list payroll deposits
    • Confirmation of Earnings – Letter (HR2181) and Confirmation of Earnings Form (HR2181A) (These forms are used by PLMS only)
  8. Calculate the overpayment amount by determining how much undeclared income the family unit received and what assistance month that income affected. 

Undeclared non-exempt asset

Note: For property jointly owned with a parent (that the client is not residing in), trust rules may apply. Contact Legislation and Litigation Branch for assistance.

  1. Supporting documents must provide proof for each month the asset was in excess of the allowable asset level for the family unit. 
  2. For assets in the form of equity in investments or other financial vehicles, supporting documents may include, but are not limited to:

    • Detailed statements that identify the client either by name, social insurance number or account number, the name and location of the financial institution, and the cash value of the asset for each calendar month pertaining to the overpayment period
  3. For assets in the form of equity in property, supporting documents may include, but are not limited to:

    • Documents pertaining to the purchase price of the property
    • Land Title documents
    • Mortgage documents or agreements for sale
    • Other documents relating to amounts owing on the property
    • Market value less encumbrances (to determine equity/cash value)
  4. Review the value of the asset over the overpayment period to determine the maximum value it reached at any time during the overpayment period (e.g., the value of an asset may fluctuate from $2,000 in May up to $5,000 in August and then go back down to $2,000.  The maximum value the asset reached was $5,000).
  5. If the total amount of the overpayment is less than the maximum value the asset reached during the overpayment period, the overpayment amount is the amount of assistance the family unit was not eligible to receive.

    • Example 1: The maximum value of the asset was $5,000. The family unit (a single person) failed to declare the asset for 3 months and received a total of $1,830 before the case was closed. The overpayment amount is $1,830.
    • Example 2: The maximum value of the asset was $5,000. The family unit (a single person) failed to declare the asset for 24 months and received a total $14,640 before the case was closed. The overpayment amount is capped at $5,000 which is the maximum value the asset reached during the overpayment period.
  6. Enter the dollar value of the asset for each calendar month during the overpayment period.  Note the source of the asset (e.g., RRSP with BMO).
  7. The Overpayment Calculator (OPC) will determine the amount of overpayment based on $0 eligibility for each month in which “assets in excess” is entered as the overpayment reason. Staff need to override the OPC if the overpayment amount calculated exceeds the maximum value of the asset during the overpayment duration. The final (adjusted) overpayment amount is capped at the maximum value of the asset or amount of assistance, whichever is the lesser.

Both undeclared income and undeclared non-exempt assets

  1. Follow procedures for calculating an overpayment due to undeclared non-exempt assets for each month (do not determine the adjusted overpayment amount).
  2. Follow procedure for calculating an overpayment due to undeclared income and add the undeclared income amount for each month to the chart.
  3. Determine the maximum value of the asset.
  4. Review the overall overpayment in relation to both the asset and the undeclared income.  If the overpayment due to undeclared income is greater than the maximum value of the asset, the greater amount will prevail.

    • Example 1: The maximum value of the asset was $5,000. The family unit (a single person) failed to declare the asset for three months and received a total of $1,830. During the same three-month period the client failed to declare employment income of $200 each month before the case was closed. The overpayment amount is $1,830.
    • Example 2: The maximum value of the asset was $5,000. The family unit (a single person) failed to declare the asset for 12 months. In addition, the client failed to declare employment earnings of $700 each month for 24 months (including the same period of time they had the asset) and received a total $14,640 before the case was closed. The overpayment amount is not capped at $5,000 which is the maximum value the asset reached during the overpayment period. The overpayment is the actual amount of assistance they were not entitled to receive, which is $14,640.
    • Example 3: The maximum value of the asset is $2,000. The family unit (a single person) failed to declare the asset for two calendar months and then spent the asset on new furniture and clothes when they started working in the third calendar month. They continue to work and do not report employment earnings of $300 each month for 12 additional months. The total overpayment period is 15 months. The maximum value of the asset was $2,000, they were not eligible for the first two months due to the asset, not eligible in the third month due to both the asset and income, and not eligible for the top up in the remaining 12 months. The overpayment is: (3 X $610) plus (12 X $300) = $1,830 + $3,600 = $5,430

Undeclared Marriage-Like Relationship

  1. If two adults residing together are not legally married and there is no acknowledgement they are a couple, staff must assess the nature of the relationship to determine if a marriage-like relationship exists using the following three factors:

    • The parties resided together for at least 3 consecutive months, or 9 out of the previous 12 months; and
    • Financial dependence or interdependence is consistent with “marriage-like” relationship; and
    • Social and familial aspects are consistent with “marriage-like” relationship.

      Note: Ministry staff can verify information that pre-dates July 1, 2006 based on the current definition of “spouse” only to determine eligibility, not to calculate an overpayment that may have occurred prior to July 1, 2006.
  2. In applying these three factors, staff must keep in mind that the amended definition of “spouse” was effective July 1, 2006.
  3. If two unmarried individuals are residing together at the time of an IA application or review, staff can verify information that pre-dates July 1, 2006, in order to determine if they resided together for the previous 3 consecutive months or 9 of the previous 12 months.  This is for the purpose of determining if they are in a marriage-like relationship (factor 1 of above criteria) and eligible for assistance based on the current definition of “spouse,” not for calculating overpayments that may have occurred before July 1, 2006.
  4. Any resulting determination of ineligibility or overpayment based on this definition of “spouse” must be applied or calculated from July 1, 2006 onward only.

    Examples:

    1. Determining eligibility – Example 1

      An unmarried couple who are living together apply for IA in August 2006. Since the couple has not declared a “marriage-like” relationship, staff must assess the nature of the relationship based on the current definition of ‘spouse’ (above 3 factors). Applying the new definition, staff look to see if a) the couple lived together from May–Aug. 2006 (previous 3 consecutive months); or b) the couple has lived together for 9 out of those 12 months between September 2005 and Aug. 2006. This information that pre-dates July 1, 2006 can be used only for the purpose of determining eligibility for IA, not for calculating any overpayments.
    2. Overpayments – Example 2

      Two individuals who are receiving IA are found to be living together at annual review in September 2006. Staff can apply the three factors to determine the nature of their present living arrangement to assess current eligibility. However, the definition of spouse cannot be applied retroactively to calculate an overpayment prior to July 1, 2006. Overpayments can only be calculated for the months of July, August and September 2006.
  5. Gather all supporting documentation pertaining to the overpayment.  Supporting documents may include, but are not limited to:

    • Tenancy agreement
    • Financial documents (such as for bank accounts, joint credit or loans, insurance contracts, etc.)
    • Car ownership documents
    • Child’s birth certificate (to see list of parents), or court orders for child support, etc.
  6. Calculate the overpayment amount by determining the period of time (after July 1, 2006, only) the client was ineligible as a single person, how much assistance they received for that period and how much they would have received had they been assessed as the correct family unit size.
    [For further information, please refer to Verification and Eligibility – Living Arrangements.]

Other undeclared circumstances

  1. Gather all supporting documentation pertaining to the overpayment.  Supporting documents must provide proof for each month whether the family unit was totally or partially ineligible for the assistance they received.
  2. Enter all appropriate information onto the overpayment chart. 
  3. Determine the total overpayment of assistance the family unit received due to the undeclared circumstance.

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Suspending Recovery from Comforts Allowance: January 26, 2007
January 26, 2007

Effective July 18, 2006: To reduce or suspend the monthly recovery of a debt from a client in Long-Term Care (LTC):

  1. Confirm that the client is in LTC on a per diem basis.
  2. Review client circumstances with Supervisor for approval to reduce or suspend recovery.
  3. Reduce the recovery amount.  Ensure that a note is added on the system explaining the reason for the reduction.

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