Action Transmittal

U.S. Department of
Health and Human Services
Administration for Children & Families
Office of Family Assistance
Washington, D.C. 20447

No. ACF-AT-94-11

STATE AGENCIES ADMINISTERING APPROVED PUBLIC ASSISTANCE PROGRAMS AND OTHER INTERESTED PARTIES AND ORGANIZATIONS

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
. . . recovery will be made by repayment by the individual or by reducing the amount of any future aid payable to the family of which he is a member . . . [For] an overpayment to any individual who is no longer receiving aid . . . recovery shall be made by appropriate action under State law against the income or resources of the individual or the
family . . . ."

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.

At the same time 45 C.F.R 233.20(a)(13)(i)(A)(1) requires a State to recover an overpayment from "the individual responsible for the overpayment" (or from that individual's current assistance unit). In AFDC, the caretaker relative in the unit is normally responsible for the overpayment since she receives and administers the AFDC payment(s) of which the overpayment is a part. Therefore, when 45 C.F.R 33.20(a)(13)(i)(A)(1) and 45 C.F.R 233.20(a)(13)(i)(B) are read together, they require a State to look to the caretaker relative recipient in the overpaid assistance unit (or the current assistance unit of which she is a member) for purposes of collecting any overpayment for which she was responsible. Once the State locates her, the responsibility of the other members of the overpaid assistance unit is discharged.

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).