AUTHORITY: Implementing and authorized by Sections 11-18, 12-4.4 and 12-13 of the Illinois Public Aid Code [305 ILCS 5/11-18, 12-4.4 and 12-13].

SOURCE: Recodified from 89 Ill. Adm. Code 102.100 and 102.110 and 89 Ill. Adm. Code 121.200 through 121.208 at 10 Ill. Reg. 21094; amended at 11 Ill. Reg. 10604, effective May 29, 1987; amended at 12 Ill. Reg. 18192, effective November 4, 1988; amended at 13 Ill. Reg. 3843, effective March 17, 1989; amended at 17 Ill. Reg. 8187, effective May 24, 1993; amended at 17 Ill. Reg. 18113, effective September 29, 1993; emergency amendment at 20 Ill. Reg. 13376, effective October 1, 1996, for a maximum of 150 days; amended at 21 Ill. Reg. 3151, effective February 28, 1997; emergency amendments at 21 Ill. Reg. 8607, effective July 1, 1997, for a maximum of 150 days; recodified from the Department of Public Aid to the Department of Human Services at 21 Ill. Reg. 9322; amended at 21 Ill. Reg. 15502, effective November 26, 1997; amended at 22 Ill. Reg. 18939, effective October 1, 1998; amended at 26 Ill. Reg. 400, effective January 1, 2002; amended at 26 Ill. Reg. 16495, effective October 28, 2002; amended at 32 Ill. Reg. 7916, effective May 7, 2008; amended by peremptory amendment at 33 Ill. Reg. 5549, effective April 1, 1009; amended by peremptory amendment at 33 Ill. Reg. 11336, effective July 15, 2009; emergency amendment at 36 Ill. Reg. 10513, effective July 1, 2012 through June 30, 2013; amended at 37 Ill. Reg. 1893, effective February 4, 2013.

SUBPART A: GENERAL OVERPAYMENT PROVISIONS

 

Section 165.1  Incorporation By Reference

 

Any rules or regulations of an agency of the United States or of a nationally recognized organization or association that are incorporated by reference in this Part are incorporated as of the date specified, and do not include any later amendments or editions.

 

(Source:  Added at 13 Ill. Reg. 3843, effective March 17, 1989)

 

Section 165.10  Overpayments

 

An overpayment is financial assistance, food stamp benefits or both issued in error to or in behalf of a client.  The Illinois Department of Human Services  (Department) initiates action to recover overpayments, whether or not a client is currently eligible for financial assistance, food stamp benefits or both.  Refer to Section 165.42(d) for food stamp overpayments of $125 or less.

 

a)         If a person currently receives assistance of the type in which the overpayment occurred, the overpayment shall be collected under Subpart B or C, as the case may be, of this Part.

 

b)         If a family currently participating in the Temporary Assistance for Needy Families (TANF) program has received an overpayment of AFDC or TANF, and has not repaid the money, the overpayment shall be collected under Subpart B or C, as the case may be, of this Part.

 

c)         If a person (including a person who receives only medical assistance) does not currently receive assistance of the type in which the overpayment occurred, the overpayment shall be collected under Subpart D of this Part.

 

(Source:  Amended at 26 Ill. Reg. 400, effective January 1, 2002)

 

Section 165.20  Determination of Financial Assistance Overpayments

 

The Department shall determine the amount of a financial assistance overpayment for a specific month by comparing the correct grant amount to the actual grant amount received.  The amount received which is in excess of the correct grant amount is the amount of overpayment for the month. Any overpayment the Department identifies after September 30, 1981, whether or not the overpayment occurred after that date, shall be included in the determination.

 

(Source:  Added at 11 Ill. Reg. 10604, effective May 29, 1987)

 

Section 165.30  Types of Food Stamp Overpayment Claims

 

The Department shall establish one of the following types of claims against any household that has received an overpayment of Food Stamp benefits.

 

a)         Intentional program violation:  This claim is defined at 89 Ill. Adm. Code 121.150 and the methods for finding such a violation are listed in 89 Ill. Adm. Code 121.153.

 

b)         Inadvertent household error:  This claim results from an overpayment caused by a misunderstanding or unintentional error on the part of the household.  Inadvertent household errors include but are not limited to a household member's unintentional failure to provide the local office with correct or complete information or to report changes in its circumstances to the local office, or receiving more benefits than it was entitled to receive while awaiting a fair hearing decision because it appealed within ten (10) days of the date of notice and benefits were continued.

 

c)         Administrative error:  This claim results from an overpayment caused by Departmental action or failure to take action.  Administrative errors include but are not limited to overpayments due to errors such as the Department's failure to act promptly on a reported change, incorrect issuance of duplicate coupons, incorrect computations, and failure to reduce benefits when the public assistance grant is changed.

 

(Source:  Amended at 11 Ill. Reg. 10604, effective May 29, 1987)

 

Section 165.40  Determination of Food Stamp Overpayments

 

The Department determines the amount of a food stamp overpayment claim by comparing the correct amount of food stamp benefits, if any, the household was entitled to receive, based on actual income and expenses, to the amount actually received, beginning with the month of overpayment.  The amount received which is in excess of the correct amount is the amount of the overpayment, except as described in subsection (d) of this Section.  The earned income deduction is not allowed when the amount of an overpayment is calculated, if the household failed to report the earned income.

 

a)         The determination of an intentional program violation, an inadvertent household error, or an administrative error overpayment shall not include any amount of overpayment for any month that is more than six years before the discovery date of the overpayment.

 

b)         Where an intentional failure to report a change in circumstances constitutes the intentional program violation, the first month of overpayment is the month the change would have been effective if it had been reported.

 

c)         For an inadvertent household error and an administrative error overpayment, where the overpayment resulted from an unreported change or the Department's inaction on a reported change, the first month of overpayment is the month the change would have been effective had it been reported or acted on in a timely manner.

 

d)         As provided for in the 2009 American Recovery and Reinvestment Act, the amount of any overpayment cannot include the amount of the temporary benefit increase granted under that Act.

 

(Source:  Peremptory amendment at 33 Ill. Reg. 5549, effective April 1, 2009)

 

Section 165.42  Establishment of Claims for Food Stamp Overpayments

 

All adult (age 18 or over) members of a food stamp household that receives an overpayment are jointly and severally liable for repayment of the overpayment.

 

a)         The Department will establish a claim to collect an overpayment against the household that received the overpayment.  First priority will be given to collecting claims from currently receiving households.

 

b)         If there has been a change in household composition since the overpayment, the Department will establish the claim against a currently receiving household in the following order:

 

1)         The household that now contains the head of the overpaid household; or

 

2)         The household that now contains an adult member of the overpaid household; or

 

3)         The household that now contains an adult member of the overpaid household, which currently receives the highest monthly allotment, or, in the case of a claim for an intentional program violation, the highest monthly entitlement.

 

c)         If there is no currently receiving household against which to establish the claim, the Department will apply the recovery provisions of Subpart D of this Part in accordance with subsection (b) of this Section.

 

(Source:  Amended at 26 Ill. Reg. 16495, effective October 28, 2002)

 

Section 165.44  Acceptable Forms of Food Stamp Payments

 

The Department shall collect food stamp overpayments by one or more of the following forms of payment:

 

a)         Reduction of benefits prior to issuance. This includes allotment reduction and offsets to restored benefits.

 

b)         Reduction of benefits after issuance.  These are benefits from electronic benefits transfer (EBT) accounts.

 

1)         Prior to collection from active accounts, written permission will be obtained from the household, or oral permission will be obtained for a one time only reduction.  If oral permission is used, a receipt will be sent to the household within 10 days.

 

2)         Prior to collection from stale accounts, a written notice will be sent telling the household that the benefits will be used to reduce existing overpayment claims if they do not respond within 10 days.

 

c)         Cash payment or any of its generally accepted equivalents.

 

d)         Offsets and intercepts of various State payments, including, but not limited to, wage garnishments, income tax refunds and lottery winnings.

 

e)         Public Service in lieu of paying the claim, when ordered by a court.

 

f)         Collections through the US Department of the Treasury's collection programs.  (See Section 165.104(e)).

 

g)         Offset of Unemployment Compensation Benefits if the household agrees or if ordered by a court.

 

See Section 165.82 for methods of food stamp claim repayment for currently participating households and Section 165.104 for methods of involuntary repayment for nonparticipating households.

 

(Source:  Amended by peremptory rulemaking at 33 Ill. Reg. 11336, effective July 15, 2009)

 

Section 165.50  Suspension and Termination of Food Stamp Claims

 

a)         If collection action has been initiated and at least one demand letter has been sent, the Department may suspend a claim if:

 

1)         The household cannot be located, or

 

2)         The cost of further collection action is likely to exceed the amount that can be recovered, or

 

3)         The household has initiated bankruptcy proceedings, or

 

4)         The claim is determined to be invalid, or

 

5)         The claim balance is $25 or less and has been delinquent for 90 days or more, unless the total of all claims is more than $25, or

 

6)         All adult household members are deceased.

 

b)         A claim may be terminated as uncollectable if it has been suspended for three years.  Suspended claims shall be used by the Department to offset any lost benefits to which a household is entitled.  Lost benefits shall be offset until the entire claim is paid off.  (See 89 Ill. Adm. Code 121.95 regarding the Restoration of Lost Benefits.)

 

c)         The amount of the claim may be adjusted if upon review the Department believes that the household is not able to repay the claim.

 

d)         A terminated and written off claim will be reinstated if a new collection method or a specific event (such as winning the lottery) substantially increases the likelihood of further collections.

 

(Source:  Amended at 26 Ill. Reg. 400, effective January 1, 2002)

SUBPART B: COLLECTION OF FINANCIAL ASSISTANCE OVERPAYMENTS FROM CURRENT CASES

 

Section 165.70  Recoupment of Overpayments from Current Temporary Assistance for Needy Families (TANF) and Aid to the Aged, Blind or Disabled (AABD) Cases

 

a)         When the Department determines that a TANF or AABD assistance unit has received assistance to which it is not entitled, the Department shall recoup the overpayment from:

 

1)         the current assistance grant;

 

2)         the assistance grant case that now contains the former grantee of the overpaid assistance case; or

 

3)         the assistance grant case that now contains any adult member of the overpaid assistance case.

 

b)         The entire overpayment will be recouped in as short a time as possible.  For AABD cases, the amount to be deducted for any one month shall not reduce the family's or individual's total income and assets to an amount less than 90% of the respective payment standard for a family or individual of that size with no income. (For overpayments due to the receipt of duplicate warrants, see 89 Ill. Adm. Code 117.20.)

 

c)         For TANF cases, the family's or individual's total income shall include all gross earned income, less the earned income disregard and child care deduction if applicable, all unearned income, and all assistance payments.  For AABD, total income shall include net earned income, all unearned income, and all assistance payments.

 

d)         Families participating in the TANF program who have received an overpayment of AFDC or TANF, and have not repaid the money, will have the overpayment recouped from the TANF payment.  The amount to be deducted for any one month shall not reduce the family's or individual's total income and assets to an amount less than 90% of the applicable assistance payment level with a $75 monthly maximum deduction.  (For overpayments due to the receipt of duplicate warrants, see 89 Ill. Adm. Code 117.20.)

 

(Source:  Amended at 37 Ill. Reg. 1893, effective February 4, 2013)

SUBPART C: COLLECTION OF FOOD STAMP OVERPAYMENTS FROM CURRENTLY PARTICIPATING HOUSEHOLDS

 

Section 165.80  Initiating Collection from Currently Participating Households

 

a)         The Department initiates the collection of all claims by sending a written demand letter to the  household pursuant to the requirements of 7 CFR 273.18(d)(3) (2001 with no later editions).

 

b)         Collection action is taken on all claims except when collection of an intentional program violation claim will prejudice a case referred for prosecution.

 

c)         Collection action may be taken against all adult household members simultaneously.

 

(Source:  Amended at 26 Ill. Reg. 400, effective January 1, 2002)

 

Section 165.82  Methods of Food Stamp Claim Repayment

 

a)         A household may repay a claim for intentional program violation, inadvertent household error, and administrative error in full (by cash payment or transfer of electronic benefits) or the monthly benefit amount will be reduced to repay the claim.

 

b)         The Department may intercept any irregular and/or unexpected State payments.

 

(Source:  Amended by peremptory rulemaking at 33 Ill. Reg. 11336, effective July 15, 2009)

 

Section 165.84  Determination of Monthly Benefit Reduction Amount

 

a)         For an intentional program violation claim, the reduction amount is the greater of either 20 percent of the household's monthly benefit amount or $20.

 

b)         For an inadvertent household error or an administrative error claim, the reduction amount is the greater of either 10 percent of the household's monthly benefit amount or $10.

 

(Source:  Amended at 26 Ill. Reg. 400, effective January 1, 2002)

 

Section 165.86  Failure to Respond to Initial Demand Letter

 

If a currently participating household fails to respond within ten days after the date of mailing of an initial demand letter for repayment of an intentional program violation, an inadvertent household error or an administrative error claim, the Department shall reduce the household's monthly benefit amount without further notice.

 

(Source:  Amended at 21 Ill. Reg. 3151, effective February 28, 1997)

 

Section 165.88  Failure to Comply with Repayment Schedule (Repealed)

 

(Source:  Repealed at 26 Ill. Reg. 400, effective January 1, 2002)

SUBPART D: COLLECTION OF OVERPAYMENTS FROM NON-RECIPIENTS

 

Section 165.100  Collection of Overpayments from Persons Not Receiving Financial Assistance or Food Stamps

 

The Department shall collect from persons who were overpaid financial assistance, Food Stamps, or both, but who now do not receive the type or types of assistance in which they were overpaid, under this Subpart D of Part 165.  These persons are described in this Subpart D as "debtors".

 

(Source:  Added at 11 Ill. Reg. 10604, effective May 29, 1987)

 

Section 165.102  Demand for Repayment

 

The Department shall inform a debtor in writing that it demands repayment of the overpaid amount.  The written demand shall specify the total amount of the overpayment, the method of calculating the overpayment, the month or months in which the overpayment occurred, a description of the nature of the overpayment and the options for method of repayment of the total.  The written demand shall also notify the debtor of the right to appeal and receive a hearing in accordance with 89 Ill. Adm. Code 104.1 and provide information on the availability of free legal services.  The Department shall send the debtor monthly statements indicating the overpayment balance and the monthly installment amount due, and shall continue sending monthly statements until the total amount is fully repaid or the Department takes any of the actions described in Section 165.104.

 

(Source:  Added at 11 Ill. Reg. 10604, effective May 29, 1987)

 

Section 165.104  Methods of Involuntary Repayment

 

If the debtor has failed for 90 days to make regular installment payments to retire the overpayment according to the repayment schedule and a balance due is outstanding, the Department may take any or all of the following actions to collect the overpayment:

 

a)         Initiation of wage garnishment proceedings, if the overpayment was established by a civil judgment and the Department determines that the debtor is employed.

 

b)         Referral of the overpayment to a private collection agency for collection.

 

c)         Referral of the overpayment to the Comptroller of the State of Illinois for collection under Section 10.05 of the State Comptroller Act [15 ILCS 405/10.5].

 

d)         Initiation of proceedings to obtain a civil judgment under Section 8A-7 of the Illinois Public Aid Code [305 ILCS 5/8A-7].

 

e)         Referral of the overpayment to the Treasury Offset Program for deduction of the debt from tax refunds and/or other federal warrants in accordance with federal regulations (see 7 CFR 272-273).

 

f)         Referral of delinquent debt to the Department of Revenue Debt Collection Bureau for collection of debt using all legal authority available to the Department of Revenue to collect debt in accordance with Section 10 of the Illinois State Collection Act of 1986 [30 ILCS 210/10].

 

(Source:  Amended at 32 Ill. Reg. 7916, effective May 7, 2008)

 

Section 165.106  Effect of Return to Active Assistance Status

 

If a debtor, while still owing an overpayment balance due to the Department, returns to active status as a financial assistance recipient or food stamp beneficiary, the Department shall immediately cease any action under Section 165.104 to collect that portion of the overpayment that is related to the type of assistance being received and shall initiate collection actions under Subpart B or C, as the case may be, of this Part.  The Department shall not take further action under Section 165.104 until such time as the person is no longer receiving that type of assistance, except for households receiving food stamp benefits.  The Department may refer food stamp debts to the Comptroller as per Section 165.104(c) to withhold irregular or unexpected state payments, such as, but not limited to, income tax refunds or lottery winnings.

 

(Source:  Amended at 26 Ill. Reg. 400, effective January 1, 2002)