Wisconsin Administrative Code
Department of Children and Families
DCF 101-199 - Family and Economic Security
Chapter DCF 101 - Wisconsin Works
Section DCF 101.23 - Recovery of overpayments

Universal Citation: WI Admin Code ยง DCF 101.23

Current through August 26, 2024

(1) DEFINITIONS. In this section:

(a) "Administrative error" means an error committed by an agency or the department in determining benefits given under s. 49.148, 49.155, 49.157, or 49.19, Stats., that results in an overpayment.

(b) "Client error" means an error caused by an individual who is a member of a W-2 or AFDC group reporting incorrect information or failing to report information due to misunderstanding or mistake that results in an overpayment under s. 49.148, 49.155, 49.157, or 49.19, Stats.

(c) "Complies with the payment schedule" as used in s. 49.195(3m) (h), Stats., means the debtor submits each payment due on an overpayment so that it is received by the department by the due date every month over the life of the debt.

(d) "Debtor" means a liable person who received an overpayment of benefits under s. 49.148, 49.155, 49.157, or 49.19, Stats., and has not repaid it in full.

(e) "Disposable earnings" means that part of the earnings of any debtor after the deduction from those earnings of any amounts required by law to be withheld, any life, health, dental or similar type of insurance premiums, union dues, any amount necessary to comply with a court order to contribute to the support of minor children, and any levy, wage assignment, or garnishment executed prior to the date of a levy under this section.

(f) "Intentional program violation" means an individual who is a member of a W-2 or AFDC group intentionally made a false or misleading statement or misrepresented, concealed, or withheld facts that resulted in an overpayment under s. 49.148, 49.155, 49.157, or 49.19, Stats. An intentional program violation may be determined based on an administrative hearing, a court finding, a signed waiver of an administrative hearing for an alleged intentional program violation, or a consent agreement in lieu of prosecution based on the same facts or events as the intentional program violation.

(g) "Overpayment" or "debt" means any benefit or payment received under s. 49.148, 49.155, 49.157, or 49.19, Stats., in an amount greater than the amount that the individual, AFDC assistance group, or W-2 group was eligible to receive under applicable statutes and rules, regardless of the reason for the overpayment. An overpayment may be the result of client error, administrative error, or intentional program violation.

(h) "Recoupment" means the process of repayment of an overpayment by the department withholding a portion of a W-2 participant's grant under s. 49.148, Stats.

(2) OVERPAYMENT DETERMINATION AND NOTICE.

(a) A county, tribal governing body, W-2 agency, or the department shall determine whether an overpayment has been made under s. 49.148, 49.155, 49.157, or 49.19, Stats., and if so, the amount of the overpayment.

(b) The county, tribal governing body, W-2 agency, or department shall send notice of the overpayment at the address of a debtor as it appears on the records of the department. Documentation that a county, tribal governing body, W-2 agency, or the department properly mailed the notice to the address of the debtor as it appears on the records of the department and that it was not returned as undeliverable shall be prima facie evidence that notice was delivered and received.

(c) The notice shall include the reason for the overpayment, the time period in which the overpayment occurred, the amount of the overpayment, and notice of the right to appeal the overpayment determination.

(d) The department shall give the debtor an opportunity for review following the procedure specified under s. 49.152(2), Stats., if the debtor received the overpayment under s. 49.148 or 49.157, Stats., or for a hearing under ch. 227, Stats., if the debtor received an overpayment under s. 49.155 or 49.19, Stats.

(3) LIABILITY.

(a) Liability shall extend to any parent, nonmarital coparent, or stepparent whose family receives benefits under s. 49.148, 49.155, 49.157, or 49.19, Stats., during the period that the parent, nonmarital coparent, or stepparent is an adult member of the same household, but each individual's liability is limited to that period. For the purpose of determining liability for an overpayment of a child care subsidy under s. 49.155, Stats., "parent" has the meaning given in s. 49.155(1) (c), Stats.

(b) Liability for repayment of an overpayment shall be joint and several.

(c) Liability for overpayments caused by administrative error shall be limited to one year prior to the date that the agency or department discovers the error for overpayments determined on or after August 1, 2005.

(4) SIMULTANEOUS COLLECTION. A county, tribal governing body, W-2 agency, or the department may recover an overpayment by more than one method of collection at the same time.

(5) RECOUPMENT FROM CURRENT W-2 PARTICIPANTS.

(a) Administrative error and client error.
1. If any overpayment of benefits paid under s. DCF 101.18 (1) (b) or (c) is due to administrative error or client error, the W-2 agency or the department shall recoup the overpayment from a debtor who continues to receive benefits under s. DCF 101.18 (1) (b) or (c) by reducing the amount of the benefits amount by no more than 10%.

2. The debtor may make a voluntary repayment in addition to the amount withheld from the benefit under subd. 1.

3. The county, tribal governing body, or W-2 agency shall ask a debtor who has received an overpayment to voluntarily repay the overpayment. If the debtor fails to pay voluntarily, the county, tribal governing body, or W-2 agency shall refer the debt to the department for further collection efforts.

(b) Overpayments caused by intentional program violations. If an overpayment of benefits under s. DCF 101.18 (1) (a), (b), or (c), is the result of an intentional violation of ss. 49.141 to 49.161, Stats., or this chapter, the W-2 agency or the department shall recoup the overpayment from the debtor by deducting an amount from the debtor's benefits received under s. DCF 101.18 (1) (a), (b), or (c) until the overpayment is recovered. The amount to be deducted each month may not exceed the following:
1. For intentional program violations resulting in an overpayment that is less than $300, the amount to be deducted may not exceed 10% of the monthly benefit payment.

2. For intentional program violations resulting in an overpayment that is at least $300 but less than $1,000, the amount to be deducted may not exceed $75.

3. For intentional program violations resulting in an overpayment that is at least $1,000 but less than $2,500, the amount to be deducted may not exceed $100.

4. For intentional program violations resulting in an overpayment that is $2,500 or more, the amount to be deducted may not exceed $200.

(6) TRIAL EMPLOYMENT MATCH PROGRAM overpayments. The W-2 agency shall recover any overpayment of benefits paid under s. DCF 101.18 (1) (a) from the debtor. The W-2 agency may not recover more than the amount that the W-2 agency or the department paid in wage subsidies for the debtor while the debtor was ineligible to participate under s. DCF 101.16 (2). The W-2 agency shall ask a former participant in a trial employment match program job who received overpayments to voluntarily repay the overpayment. If a former participant does not voluntarily repay the overpayment, the W-2 agency shall refer the debt to the department for further collection action.

(7) EFFECT OF RESTITUTION PAYMENTS. A debtor's payments to the department as part of a restitution agreement under s. 973.20, Stats., arising out of the facts or events that are the basis for the overpayment owed to the department shall be applied to the liability owed to the department, but a debtor's completion of probation or fulfillment of the restitution agreement shall not limit or impair the ability of the department to collect any remaining balance on the debt.

(8) DELINQUENCY. A debt shall be considered delinquent if the department does not receive a debtor's payment by the due date 3 times over the life of the debt. A delinquent debt may be subject to warrant and execution under s. 49.195(3m), Stats.; levy under s. 49.195(3n), Stats.; setoff against a refund under ss. 49.85 and 71.93, Stats.; and other authorized collection methods. The department may recover a delinquent debt by more than one means of collection at the same time. A delinquent debt retains delinquent status regardless of any future payment on the debt.

Note: The limitation on using warrant and execution and levy only when a debtor has not complied with the payment schedule 3 times is not required by statute. Because the department is limiting the use of warrant and execution and levy to debtors who have not complied with a payment schedule, the withdrawal of a warrant when the debtor does comply with the payment schedule under s. 49.195(3m) (h), Stats., will not occur.

(9) WARRANT AND EXECUTION UNDER SECTION 49.195 (3M), STATS.

(a) Creation of lien.
1. If a debt for repayment of an overpayment under s. 49.148, 49.155, 49.157, or 49.19, Stats., is delinquent under sub. (8) and no review or appeal rights under sub. (2) are pending and the time for requesting a review has expired, the department may issue a warrant directed to the clerk of circuit court of any county.

2. The clerk of circuit court shall enter in the judgment and lien docket the name of the debtor named in the warrant, the amount for which the warrant is issued, and the date on which the clerk entered the information.

3. The department shall pay the fees required under s. 814.61(5), Stats., for entering the warrant and shall collect the fees from the debtor named in the warrant when satisfaction or release is presented for entry.

4. A warrant issued under subd. 2. shall be considered in all respects a final judgment constituting a perfected lien upon the debtor's right, title, and interest in all real and personal property located in the county in which the warrant is entered.

5. The department shall provide the debtor with notice and an opportunity for a hearing under ch. 227, Stats., when a warrant has been issued. The debtor may request a hearing under ch. 227, Stats., within 20 days from the date on the notice. The appeal shall be limited to questions of prior payment of the debt that the department is proceeding against and mistaken identity of the debtor. The department may not withdraw a warrant based on a request for hearing.

(b) Execution of the warrant .
1. After the warrant is issued and no review or appeal rights under par. (a) 4. are pending and the time for requesting a review has expired, the department may file an execution with the clerk of circuit court for filing with the sheriff of the county, commanding the sheriff to execute the warrant and sell sufficient real and personal property of the debtor to pay the amount stated in the warrant in the same manner as upon an execution against property issued upon the judgment of a court of record, and to return the warrant to the department and pay to it the money collected by virtue of the warrant within 90 days after receipt of the warrant. The execution may not command the sheriff to levy upon or sell any property that is exempt from execution under ss. 815.18(3) and 815.20, Stats.

2. The department shall provide the debtor with notice and an opportunity for a hearing under ch. 227, Stats., before property is seized. The debtor may request a hearing under ch. 227, Stats., within 20 days from the date on the notice. The appeal shall be limited to questions of prior payment of the debt that the department is proceeding against and mistaken identity of the debtor. The department may not cease enforcement or seizure based on a request for hearing.

3. The department shall provide the debtor with notice and an opportunity for a hearing under ch. 227, Stats., before seized property is sold. The debtor may request a hearing under ch. 227, Stats., within 20 days from the date on the notice. The appeal shall be limited to questions of prior payment of the debt that the department is proceeding against and mistaken identity of the debtor. If a hearing is requested, the department shall notify the sheriff that seized property may not be sold before the hearing decision is issued or the hearing request is withdrawn.

(c) Satisfaction of the warrant. When the amount set forth in the warrant and all costs due the department have been paid to it, the department shall issue a satisfaction of the warrant and file it with the clerk of circuit court. The clerk of circuit court shall immediately enter a satisfaction of the judgment on the judgment and lien docket. The department shall send a copy of the satisfaction to the person named in the warrant.

(10) LEVY UNDER SECTION 49.195 (3n), stats.

(a) Definition. In this subsection, "personal property" means all tangible and intangible property and rights to such property that is not real estate, including compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus or otherwise; periodic payments received pursuant to a pension or retirement program; rents; proceeds of insurance; contract payments; stock and bonds; and accounts in financial institutions.

(b) Notice prior to levy.
1. If a debt for repayment of an overpayment under s. 49.148, 49.155, 49.157, or 49.19, Stats., is delinquent under sub. (8) and no review or appeal rights under sub. (2) are pending and the time for requesting a review has expired, the department shall give notice to the debtor that the department may pursue legal action for collection of the debt.

2. The department shall make the demand for payment and give notice to the debtor at least 10 days prior to the levy, personally or by any type of mail service that requires a signature of acceptance, at the address of the debtor as it appears on the records of the department. The demand for payment and notice shall include a statement of the amount of the debt, including interest and penalties, and the name of the debtor who is liable for the debt.

3. The debtor's refusal or failure to accept or receive the notice does not prevent the department from making the levy.

4. Notice prior to levy is not required for a subsequent levy on any debt of the same debtor within one year of the date of service of the original levy.

(c) Service of levy and review when property levied.
1. The department may collect the debt and the expenses of the levy by levy upon any personal property belonging to the debtor.

2. The department shall serve the levy upon the debtor and any 3 rd party in possession of or obligated with respect to property or rights to property that is subject to levy by personal service or by any type of mail service that requires a signature of acceptance as provided in s. 49.195(3n) (m), Stats. The debtor or 3 rd party's failure to accept or receive service of the levy does not invalidate the levy.

3. Any debtor who is subject to a levy proceeding made by the department has the right to appeal the levy proceeding under ch. 227, Stats., within 20 days from the date on the service of levy. The appeal shall be limited to questions of prior payment of the debt that the department is proceeding against and mistaken identity of the debtor. The levy is not stayed pending an appeal where property is secured through the levy.

(d) Third-party response.
1. Within 20 days from the service of the levy upon a 3 rd party, the 3 rd party shall file an answer with the department stating whether the 3 rd party is in possession of or obligated with respect to property or rights to property of the debtor, including a description of the property or the rights to property and the nature and dollar amount of any such obligation.

2. Any person in possession of or obligated with respect to personal property or rights to personal property that is subject to levy and upon which a levy has been made shall, upon demand of the department, surrender the personal property or rights or discharge the obligation to the department, except that part of the personal property or rights which is, at the time of the demand, subject to any prior attachment or execution under any judicial process.

(e) Appeal rights before surrendered property is sold. If levied personal property that has been surrendered to the department is not a liquid asset in the form of cash, check, or an equivalent that can be applied to the debt without a sale of the asset, the department shall provide the debtor with notice and an opportunity for a hearing under ch. 227, Stats., before surrendered property is sold. The debtor may request a hearing under ch. 227, Stats., within 20 days from the date on the notice. The appeal shall be limited to questions of prior payment of the debt that the department is proceeding against and mistaken identity of the debtor. If a hearing is requested, surrendered property may not be sold before the hearing decision is issued or the hearing request is withdrawn.

(f) Exemption rights.
1. The debtor is entitled to an exemption from levy of the greater of the following:
a. A subsistence allowance of 75% of the debtor's disposable earnings then due and owing.

b. An amount equal to 30 times the federal minimum hourly wage for each full week of the debtor's pay period.

c. An amount equal to 60 times the federal minimum hourly wage for a two-week pay period.

d. An amount equal to 130 times the federal minimum hourly wage for a monthly pay period.

2. The first $1,000 of an account in a depository institution is exempt from any levy to recover a benefit overpayment.

(g) Proceeds.
1. The department shall apply all money obtained under this subsection first against the expenses of the proceedings and then against the liability for which the levy was made and any other liability owed to the department by the debtor.

2. Whenever the value of any personal property that has been levied upon under this subsection is not sufficient to satisfy the claim of the department, the department may levy upon any additional personal property of the debtor until the debt and expenses of the levy are fully paid.

3. The department may refund or credit any amount left after the applications under subd. 1., upon submission of a claim for that amount and satisfactory proof of the claim, to the person entitled to that amount.

(11) WARRANT AND EXECUTION, LEVY, AND TAX INTERCEPT APPEAL ISSUES. Any appeal based on a notice in subs. (9) and (10) or a notice of intent to certify a debt for set-off against a state tax refund under s. 49.85, Stats., shall be limited to questions of prior payment of the debt that the department is proceeding against and mistaken identity of the debtor.

(12) THRESHOLD FOR WARRANT AND EXECUTION AND LEVY. The minimum amount that must be due before collection proceedings under subs. (9) and (10) may be commenced is $300.

(13) WAIVER. The department may waive recovery of an overpayment under this section if the department has made reasonable efforts to recover the overpayment from the debtor and determines it is no longer cost effective to continue overpayment recovery efforts.

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