Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
7 C.F.R.
272.1,
272.5,
272.6,
273.16,
273.17,
273.18,
26
C.F.R. 301.6402-6
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
194A.010(2) requires the
Cabinet for Health and Family Services to administer income-supplement programs
that protect, develop, preserve, and maintain families and children in the
Commonwealth.
KRS
194A.050(1) requires the
secretary to promulgate administrative regulations necessary to implement
programs mandated by federal law or to qualify for the receipt of federal funds
and necessary to cooperate with other state and federal agencies for the proper
administration of the cabinet and its programs.
7 C.F.R.
271.4 requires each state to administer a
Supplemental Nutrition Assistance Program (SNAP).
7 C.F.R.
273.18 requires the agency administering SNAP
to develop a process to establish and collect claims. This administrative
regulation establishes the criteria for recipient claims, collections
provisions, and additional provisions used by the cabinet in the administration
of SNAP.
Section 1. Responsibility for
a Claim. The following individuals shall be responsible for paying a recipient
claim as defined in
921 KAR 3:010:
(1) An individual who was an adult member of
the household during the time period when the overissuance or trafficking
occurred;
(2) A sponsor of an alien
household member if the sponsor is at fault; or
(3) A person connected to the household, such
as an authorized representative, who actually traffics or otherwise causes an
overissuance or trafficking.
Section
2. Claim Category.
(1) As
specified in
921 KAR 3:010, a
recipient claim shall be classified as an:
(a) Inadvertent household error
(IHE);
(b) Agency error (AE);
or
(c) Intentional program
violation (IPV).
(2) A
suspected intentional program violation (SIPV) shall be:
(a) Established if fraud is suspected, but
the client does not admit to committing fraud;
(b) Referred to court or an administrative
hearing for a fraud determination; and
(c) Changed to an:
1. IHE category without decreasing the claim
period or recalculating the claim if fraud is not substantiated; or
2. IPV category if fraud is
substantiated.
Section 3. Acting on a Change.
(1) A claim shall be established if a
household:
(a) Fails to report a change in
circumstance in accordance with the timeframes specified in
921 KAR
3:035; or
(b) Reports a change within the required
timeframe, but the cabinet fails to act on the change within ten (10) days of
the date the change is reported.
(2) The first month of overissuance, as
defined in
921 KAR 3:010, shall:
(a) Be the first month that the change would
have been effective had it been timely:
1.
Reported by the household; or
2.
Acted upon by the cabinet; and
(b) Not exceed two (2) months from the month
the change in circumstance occurred.
Section 4. Calculating the Amount of a
Recipient Claim.
(1) In accordance with
7 C.F.R.
273.18(c), unless a claim is
related to trafficking, the cabinet shall:
(a) Calculate:
1. An AE claim back to twelve (12) months
prior to when the cabinet became aware of the overissuance; and
2. An IHE claim back to the month the
overissuance first occurred, but not more than six (6) years prior to when the
cabinet became aware of the overissuance; and
3. An IPV or an SIPV claim back to the month
the fraudulent act first occurred, but not more than six (6) years prior to
when the cabinet became aware of the overissuance;
(b) Determine the correct amount of SNAP
benefits for each month that a household received an overissuance;
(c) Not apply the earned income deduction to
the portion of earned income that a household failed to report in a timely
manner, as specified in Section 3 of this administrative regulation, if:
1. The claim is classified as an IPV, SIPV,
or IHE; and
2. The IHE, SIPV, or
IPV is the basis for the recipient claim;
(d) Subtract the correct amount of SNAP
benefits from the benefits actually received and the difference shall be the
amount of the overissuance; and
(e)
Deduct any SNAP benefits that are designated to be expunged from a household's
EBT account from the amount of overissuance:
1. When the recipient claim is initially
calculated; and
2. At each
subsequent expungement until the balance of the claim is paid in
full.
(2) If
a claim is related to trafficking, the cabinet shall calculate the value of the
trafficked SNAP benefits as determined by:
(a)
An individual's admission;
(b)
Adjudication; or
(c) The
documentation that forms the basis for the trafficking determination.
(3) The amount of a claim may
differ from a calculation obtained through the methods outlined in subsections
(1) and (2) of this section if a different amount is ordered by:
(a) An administrative hearing officer or
agency head in accordance with:
921
KAR 3:060 or
921 KAR 3:070;
or
(b) A court.
(4) In accordance with
7 C.F.R.
273.18(e)(2), the cabinet
shall not establish a recipient claim if the claim referral is seventy-five
(75) dollars or less, unless the:
(a)
Household is currently participating in SNAP;
(b) Recipient claim was established or
discovered through a quality control review; or
(c) The basis of the claim is trafficking
SNAP benefits.
Section
5. KCD-1.
(1) A KCD-1, General
Claims Notice shall serve many purposes in the administration of claims
collections, including the use as:
(a) An
appointment notice;
(b) A demand
letter;
(c) Notification of benefit
reduction;
(d) A past due
notice;
(e) A repayment
agreement;
(f) A claim adjustment
notice;
(g) A claim termination
notice;
(h) A payment
receipt;
(i) Notice of a suspended
claim;
(j) Notice of a claim being
paid in full; or
(k) Notification
that a delinquent claim shall be sent to the U.S. Department of Treasury for
collection.
(2) The
language on the KCD-1 shall differ according to the purpose of the notice as
described in subsection (1) of this section.
Section 6. Notification of a Claim.
(1) A household with a suspected claim shall
be mailed a KCD-1 notifying the household of an appointment to:
(a) Discuss the potential claim;
(b) Determine the classification of the
claim, as specified in Section 2 of this administrative regulation;
and
(c) Offer the recipient an
opportunity to waive the administrative disqualification hearing if the claim
is suspected to be an IPV.
(2) If a household requests to reschedule the
appointment within ten (10) days of the date of the notice, the appointment
shall be rescheduled.
(3) The
cabinet shall determine the classification and the amount of the recipient
claim based on the information that is available to the cabinet if the
household:
(a) Fails to attend the appointment
to discuss the potential claim; and
(b) Does not contact the cabinet to
reschedule the appointment.
(4) When the cabinet determines the amount of
a recipient claim, in accordance with Section 4 of this administrative
regulation, collection shall be initiated and a KCD-1 shall be mailed to notify
the household of the claim:
(a)
Amount;
(b) Time period;
(c) Reason; and
(d) Category, as specified in Section 2 of
this administrative regulation.
(5) The household shall return the KCD-1
within ten (10) days of receipt if the household chooses to:
(a) Initiate a repayment agreement;
or
(b) Request a hearing on the
claim.
Section
7. Collection Methods.
(1)
Benefit reduction.
(a) A household that is
participating in SNAP shall have payments on the claim made by reducing its
monthly SNAP benefits through benefit reduction by the following amount:
1. For an IPV claim, the amount reduced shall
be the greater of twenty (20) dollars per month or twenty (20) percent of the
household's monthly benefits or entitlement, unless the household agrees to a
higher amount; or
2. For an IHE or
AE claim, the amount reduced shall be the greater of ten (10) dollars per month
or ten (10) percent of the household's monthly benefits, unless the household
agrees to a higher amount.
(b) The cabinet shall not use additional
collection methods against individuals in a household that is already having
its benefits reduced unless the:
1. Additional
payment is voluntary; or
2. Source
of the payment is irregular and unexpected such as a federal or state tax
refund or lottery winnings offset.
(2) A household may pay its claim using SNAP
benefits from its EBT account if the household gives the cabinet permission:
(a) By completing and returning a KCD-1 or
other written statement requesting this option; or
(b) Through an oral request for a one (1)
time reduction and the cabinet provides the household with a receipt for the
transaction within ten (10) days.
(3) If the cabinet becomes aware of expunged
SNAP EBT benefits, the claim balance shall be reduced by an amount equal to the
expunged benefits.
(4) During the
claim establishment and collection process, the cabinet shall:
(a) Deduct the amount of an outstanding
recipient claim from SNAP benefits that may be owed to a household;
and
(b) Send the household a KCD-1
as notification of the adjustment.
(5) A lump sum payment on a recipient claim:
(a) Shall be accepted by the cabinet;
and
(b) May be a full or partial
payment.
(6) If a
household is not participating in SNAP, the cabinet shall:
(a) Negotiate a repayment agreement, either
orally or in writing, which includes a repayment schedule; and
(b) Employ additional collection methods if
the claim becomes delinquent through the household's failure to submit a
payment in accordance with the negotiated repayment agreement.
(7) In accordance with
7 C.F.R.
273.18(g), the cabinet may
employ other collection methods to collect a recipient claim, such as:
(a) Referral to a public or private sector
collection agency;
(b) Lottery
offsets;
(c) Wage
garnishment;
(d) The intercept of
unemployment compensation benefits;
(e) State income tax refund intercept;
or
(f) The intercept of any
eligible federal payment owed the debtor through the Treasury Offset Program
(TOP).
(8) The cabinet
shall:
(a) Refer a recipient claim that is
delinquent for 180 or more days to TOP, unless the debtor is a member of a
participating household that is undergoing benefit reduction to collect a
recipient claim; and
(b) Remove a
recipient claim from TOP if the:
1. FNS or
U.S. Department of the Treasury instructs the cabinet to withdraw a recipient
claim;
2. Cabinet discovers that
the debtor:
a. Is a member of a SNAP household
undergoing benefit reduction; or
b.
Has made an arrangement to resume payments; or
3. Claim:
a.
Has been paid off;
b. Was disposed
of through a hearing, termination, or compromise; or
c. Was referred to TOP in error.
Section
8. Delinquent Recipient Claims.
(1) In accordance with
7 C.F.R.
273.18(e)(5), a recipient
claim shall be considered delinquent if:
(a)
The claim has not been paid by the due date and a satisfactory payment
arrangement has not been made; or
(b) A payment arrangement has been
established and a scheduled payment has not been made by the due
date.
(2) The date of
delinquency for a claim shall be the due date on the:
(a) Initial written notification if the claim
meets the criteria of subsection (1)(a) of this section; or
(b) Missed installment payment if the claim
meets the criteria of subsection (1)(b) of this section.
(3) Pursuant to
7 C.F.R.
273.18(e)(5)(ii), the claim
shall remain delinquent until:
(a) Payment is
received in full;
(b) Benefit
reduction, as described in Section 7 of this administrative regulation, is
implemented; or
(c) A satisfactory
payment agreement is negotiated for a claim meeting the criteria of subsection
(1)(a) of this section.
(4) A claim shall not be considered
delinquent if:
(a) Another claim for the same
household is currently being paid either through an installment agreement or
benefit reduction; and
(b) The
cabinet expects to begin collection on the claim once the prior claim is
settled.
(5) If the
cabinet is unable to determine delinquency status because claim collection is
coordinated through the court system, a claim shall not be subject to the
requirements for delinquent debts.
(6) A claim awaiting a fair hearing decision
shall not be considered delinquent.
(7) If a hearing official determines that a
claim does, in fact, exist against the household, the cabinet shall:
(a) Renotify the household of the claim;
and
(b) Base delinquency on the due
date of the subsequent notice.
(8) If a hearing official determines that a
claim does not exist, the cabinet shall:
(a)
Dispose of the recipient claim in accordance with Section 9(2) of this
administrative regulation; and
(b)
Send a KCD-1 to notify the household of the terminated claim.
Section 9.
Compromising, Terminating, and Writing-off Claims.
(1) Except for a recipient claim that is
established by a court of the appropriate jurisdiction, the cabinet may
compromise a claim in accordance with
7 C.F.R.
273.18(e)(7).
(2) In accordance with
7 C.F.R.
273.18(e)(8), a claim shall
be terminated and written off if:
(a) The
claim:
1. Is invalid, unless it is
appropriate to pursue the overissuance as a different type of claim;
2. Balance is twenty-five (25) dollars or
less and the claim has been delinquent for ninety (90) days or more, unless
other claims exist against the household resulting in an aggregate claim total
of greater than twenty-five (25) dollars; or
3. Has been delinquent for at least three (3)
years and, in accordance with
7 C.F.R.
273.18(n), cannot be pursued
through TOP;
(b) All
adult household members, as specified in Section 1(1) of this administrative
regulation, die; or
(c) The cabinet
is unable to locate the household.
Section 10. Restoration of Benefits.
(1) Benefits shall be restored to a household
if the household has lost benefits:
(a) Due to
an administrative error; or
(b) By
an administrative disqualification for an IPV that is subsequently
reversed.
(2) Benefits
shall be restored for a period of not more than twelve (12) months from the
date:
(a) The agency receives a request for
restoration; or
(b) A final order
is implemented, if no request for restoration is received.
(3) Benefits to be restored shall be
calculated by determining the difference between what the household was
entitled to receive and what the household actually received.
(4) Benefits to be restored shall be used to
offset any unpaid or suspended claim that the household has.
Section 11. Disclosure of
Information. The disclosure or use of information regarding SNAP participants
shall be restricted to an individual who meets the criteria specified in
7 C.F.R.
272.1(c).
Section 12. Retention of Records.
(1) In accordance with
7 C.F.R.
272.1(f), the cabinet shall
retain program records:
(a) In an orderly
fashion, for audit and review purposes; and
(b) Except for records specified in
subsection (2) of this section, for a period of three (3) years from the:
1. Month of origin of each record;
or
2. Date of fiscal or
administrative closure for fiscal records and accountable documents, such as
claims.
(2)
The cabinet shall retain records on IPV disqualifications and work violations
indefinitely.
Section
13. Civil Rights Compliance. In accordance with
7 C.F.R.
272.6, the cabinet shall not discriminate in
any aspect of program administration on the basis of age, race, color, sex,
disability, religion, political beliefs, or national origin.
Section 14. Incorporation by Reference.
(1) "KCD-1, General Claims Notice", 1/17, is
incorporated by reference.
(2) This
material may be inspected, copied, or obtained, subject to applicable copyright
law, at the Department for Community Based Services, 275 East Main Street,
Frankfort, Kentucky 40621, Monday through Friday, 8 a.m. to 4:30 p.m.
STATUTORY AUTHORITY:
KRS
194A.010(2),
194A.050(1),
7 C.F.R.
271.4,
273.18