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-94-20

As it is used in ACF-AT-94-11, what is the definition of the term "caretaker relative?"

The term "caretaker relative" has long been used to refer to an individual, identified in section 406(a) of the Act, with whom a needy child must be living in order to qualify as a "dependent child." A caretaker relative may also be an AFDC
recipient. See section 402(a)(33) of the Act.

As set forth at 45 C.F.R. § 233.90(c)(1)(v)(A)(1)-(4), a caretaker relative may be:

"(1) Any blood relative, including those of half-blood, and including first cousins, nephews, or nieces, and persons of preceding generations as denoted by prefixes of grand, great, or great-great.
(2) Stepfather, stepmother, stepbrother, and stepsister.
(3) Person who legally adopt a child or his parent as well as the natural and other legally adopted children of such persons, and other relatives of the adoptive parents in accordance with State law.
(4) Spouses of any persons named in the above groups even after the marriage is terminated by death or divorce."

ACF-AT-91-33 further clarifies that the "caretaker relative" concept includes "any relation by blood, marriage or adoption who is within the fifth degree of kinship to the dependent child." Degree of kinship is determined by using the civil law method which has been adopted, by statute or court decision, in most jurisdictions.

What does the term "responsible" mean as it is used in ACF-At-94-11?

"Responsible" ¹ as used in reference to overpayment recovery refers to the management and administration of the AFDC grant. Responsible does not mean that the overpayment was the fault or error of the individual. This is a critical distinction since section 402(a)(22) of the Act does not limit overpayment recovery to such situations, but rather requires States "to correct any overpayment." (emphasis added). Moreover, the preamble to 45 C.F.R. § 233.20(a)(13), the implementing regulation, specifically rejected a suggestion that States not be required to recover overpayments resulting from administrative errors as inconsistent with the statute. See 47 Fed. Reg. 5648, 5672 (1982).

Therefore, when ACF-AT-94-11 provides that States must seek recovery "from 'the individual responsible for the overpayment' (or from that individual's current assistance unit)," this means that States are required to pursue collection of the overpayment from the person who managed and administered the AFDC funds, provided, that this individual was also a recipient (i.e., a member of the overpaid assistance unit). There is, however, no obligation to repay the overpayment if the individual responsible for managing and administering the grant was not a member of the overpaid assistance unit as this person was not an overpaid individual since s/he did not receive the benefit of the overpayment. As ACF-AT-94-11 states "if the caretaker relative was not an overpaid individual because she was not a member of an 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)."

Thus, while in most circumstances the individual responsible for managing and administering the grant will be the caretaker relative recipient, if this is not the case, as when the individual responsible for controlling the grant was not a recipient (e.g., a judicially appointed payee, as provided for in § 1111 of the Act, or a caretaker relative who was not a member of the overpaid unit) there can be no recovery from this individual and overpayment recovery will have to be pursued from the overpaid individuals in the overpaid assistant unit.

ACF-AT-94-11 states that when 45 C.F.R §§233.20(a)(13)(i)(A)(1) and 233.20(a)(13)(i)(B) 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." (emphasis added).

Thus the sole purpose of locating the caretaker relative recipient is so the State may collect the overpayment. Therefore, the term "locate" is interpreted to mean that: (1) the State has identified the physical whereabouts of the caretaker relative; and (2)(a) the State must be able to obtain a repayment/recoupment from the AFDC grant, or (b) the State must be able to effectuate legal process, ² if necessary, to collect the overpayment from the caretaker relative recipient. For example, if a State determines that "A" (the caretaker relative recipient) is residing in Country X and is not a current AFDC recipient nor can the State effectuate legal process against her, then "A" is not located.

As for the procedures used in locating the caretaker relative recipient 45 C.F.R §233.20 (a)(13)(i)(A) requires a State to "take all reasonable steps necessary to promptly correct any overpayment" and location efforts must begin "by the end of the quarter following the quarter in which the overpayment is first identified." 45 C.F.R §233.20(a)(13)(i)(E). Moreover, 45 C.F.R §233.20(a)(13)(iv) provides "[i]n locating former recipients who have outstanding overpayments the State should use appropriate data sources such as State unemployment insurance files, State Department of Revenue information from tax returns, State automobile registration, Bendex, and other files relating to current or former recipients." ³

What is appropriate regarding location searches in particular cases is left to State discretion, so long as the State makes all reasonable efforts, as defined by the regulations, to locate the caretaker relative recipient and utilizes appropriate data sources such as those identified above. If the State has done this then it has fulfilled Federal requirements. ⁴

As discussed above, the statute requires the State to "take all necessary steps to correct any overpayment" and enumerates the methods by which the overpayment may be recovered. See section §402(a)(22) of the Act. Implicit in the statute is the concept of "discharge." "Discharge" means that there has been a "permanent release" of the obligation to repay the overpayment. "Discharge" (permanent release) is accomplished, with respect to an overpayment, once the overpayment is fully recovered. When this occurs all of the overpaid individuals are "discharged" (permanently released) from any further repayment obligation regardless of the extent to which they shared in the repayment of the debt since the statute does not mandate that the debt recovery be pro-rated among the overpaid individuals, but rather focuses solely on the recovery of the overpayment. Thus, the full recovery of the overpayment is the exclusive method, under the statute, for all overpaid individuals to be "discharged" (permanently released) from having to repay the overpayment.

Therefore when ACF-AT-94-11 refers to the "discharge" of certain individuals under various circumstances, it is understood that there may be no "discharge" (permanent release), under the statute, of the duty to repay the overpayment until it has been collected by the State.

For example, when 45 C.F.R §233.20(a)(13)(i)(A)(1) and 45 C.F.R §233.20(a)(13)(i)(B) are read together, we believe that a reading to require a State to look first 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 best harmonizes their provisions. Thus, in this example, a "discharge" of the other overpaid individuals would be premised, in application, upon the existence of a person from whom the State has the legal ability to collect the overpayment and from whom the State does secure full recovery of the overpayment.⁵

Similarly, at the bottom of page three, the AT provides that "failure to recover from one family member (or his current assistance unit) does not discharge the remaining family members (or their current assistance units)." This statement recognizes that there may be no statutory "discharge" (permanent release) of any overpaid member's obligation to repay the overpayment until it is collected.

If a deceased caretaker relative recipient has an estate, does the State have an obligation to file a claim against the estate if the time for filing a claim has not run?

As noted in the answer to question five, when 45 C.F.R §§233.20(a)(13)(i)(A)(1) and 233.20(a)(13)(i)(B) are read together, we believe that a reading to require a State to look first 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 best harmonizes their provisions. Only when the caretaker relative recipient cannot be located, as defined in answer three,⁶ may the State seek to recover from the other overpaid individuals in the assistance unit.

In many circumstances, when the caretaker relative recipient is deceased there is no estate to collect from or the time for filing a claim against the estate has expired. If, however, the State should become aware of the caretaker relative recipient's demise in time to file a claim and this is allowed under State law, then, under these circumstances, the State has an obligation to file a claim against the estate. This is based on the regulatory preference for overpayment collection from the caretaker relative recipient.