|Date: May 18, 1994|
STATE AGENCIES ADMINISTERING APPROVED PUBLIC ASSISTANCE
PROGRAMS AND OTHER INTERESTED PARTIES AND ORGANIZATIONS
|SUBJECT:||INSTRUCTION ON PRIORITY ORDER OF RECOVERY ACTION AGAINST
|APPLICABILITY:||Aid to Families with Dependent Children (AFDC) Program
|Section 402(a)(22) of the Social Security Act (the Act);
Federal regulations at 45 C.F.R 233.20(a)(13); 45 C.F.R 237.50(b); and the
preamble to the final rules on the AFDC provisions of the Omnibus Budget
Reconciliation Act of 1981 (OBRA), 47 Fed. Reg. 5671, (1982).
|PURPOSE:||To clarify the policy governing State action to recover overpayments
under the AFDC program.
The Omnibus Budget Reconciliation Act of 1981 added section 402(a)(22) to the Social Security Act. That section directs State agencies administering the AFDC program to
". . . take all necessary steps to correct any overpayment . . .
[For] an overpayment to an individual who is a current recipient
Implementing regulations at 45 C.F.R 233.20 (a)(13)(i)(B) instruct States to recover from
". . . (1) the assistance unit which was overpaid, or (2) any assistance unit of which a member of the overpaid assistance unit has subsequently become a member, or (3) any individual members of the overpaid assistance unit whether or not currently a recipient."
During the rule making process, several commenters suggested that recovery be limited to the person causing the overpayment or the caretaker relative. The Secretary responded,
"[b]ecause all individuals in the assistance unit receive the benefit of the overpayment, each member has a responsibility for the overpayment. . . . Any individual who has been a member of a unit which has received the overpayment and moves to a new unit carries to the new unit a responsibility to repay the overpayment." 47 Fed. Reg. 5671, (1982).
This interpretation has resulted in States occasionally taking recovery
action against dependent children (or adults who were dependent children
when the overpayment occurred) for overpayments received by the caretaker
relative of a former AFDC unit of which they were members.
While section 402(a)(22) of the Act refers to "an overpayment to an individual", it is silent as to who is an "overpaid individual". Further, sections 402(a)(7) and 402(a)(8) of the Act provide that AFDC eligibility determinations and benefit amount calculations be made on an assistance unit basis, rather than on an individual basis.
To harmonize sections 402(a)(7), 402(a)(8), and 402(a)(22), it is appropriate
to view every member of an overpaid assistance unit as an "overpaid
individual" and, thus, has a responsibility to repay the overpayment
received by the unit. This construction of the Act, which is the basis
for 45 C.F.R. 233.20(a)(13)(i)(B), is consistent with 45 C.F.R. 237.50(b),
which views individual members of assistance units, including children,
as "recipients" of AFDC.
However, if the caretaker relative recipient is unavailable due to death or disappearance, then the State will be required to seek recovery from the other members of the overpaid assistance unit (or their current assistance units). Similarly, if the caretaker relative was not an overpaid individual because she was not a member of the assistance unit on whose behalf she received AFDC payments, the State will be required to seek recovery from members of the overpaid assistance unit (or their current assistance units). Failure to recover from one family member (or her current assistance unit) does not discharge the remaining family members (or their current assistance units).
1. To recover an overpayment to an assistance unit of which the caretaker relative was a member, the State is to seek recovery from the caretaker relative (or the caretaker relative's current assistance unit). Once the caretaker relative is located, the responsibility of the other members of the overpaid unit is discharged.
2. In the event that the caretaker relative cannot be located, is deceased, or was not a member of the overpaid assistance unit, the State must seek recovery from the members of the overpaid assistance unit (or their current assistance units). There is no priority regarding the order in which recovery from such members is to be pursued and failure to recover from one family member (or his current assistance unit) does not discharge the remaining family members (or their current assistance units).
|INQUIRIES TO:||ACF Regional Administrators
Office of Family Assistance