A food stamp overpayment means the Department of Human Services (DHS) thinks that they paid you too much in cash or Supplemental Nutrition Assistance Program (SNAP) benefits at some time in the past. In other words, you were overpaid.
The overpayment can be for one month, many months, or many years. For example, you can be overpaid a few dollars each month. Or, maybe one month you got food stamps that you were not supposed to receive.
If someone at DHS made a mistake, the overpayment will be called an "agency error." An example of agency error is when you did report your income, but DHS did not add this income to your budget.
If DHS decides that you were at fault, then the overpayment will be called a "client error." An example of a client error is when someone moves out of your household or has gotten a job and you mistakenly forget to tell DHS. The reason for the overpayment can matter if you are charged with a client error overpayment. Here, DHS also decides whether the error was on purpose, or just a mistake. If they decide that it was on purpose it is called an Intentional Program Violation (IPV).
If you have received an overpayment, you should get a notice from DHS which says:
- How much you were overpaid;
- When you were overpaid; and
- Why you were overpaid. For example, client failed to report income.
First, you should carefully read the notice. Look at the dates on the notice and ask yourself if someone in your household was working, but not reporting their income during the date(s) DHS put on the notice. Or, did you forget to tell DHS that a person who was counted as a household member has moved out?
If you still have questions after reading the notice, you should file an appeal right away. For example, you might have some questions about:
- The time period of the overpayment;
- The amount of the overpayment;
- How the overpayment was calculated; or
- The reason that DHS gave for the overpayment.
There is no cost to file an appeal, and it is the best way to get DHS to give you a better explanation of why they believe you received the overpayment. You have 90 days from the date on the notice of the overpayment to appeal.
DHS cannot collect agency error overpayments for any month that is more than 12 months before the date when the overpayment was discovered. For example, DHS finds an agency error overpayment on June 1, 2016 for a person who was on food stamps from January 1, 2014 through January 1, 2015. DHS cannot collect that overpayment because the food stamps that were overpaid were paid more than 12 months before DHS discovered the overpayment.
If the overpayment is correct, how do I pay it back?
If you are still getting SNAP when you are charged with an overpayment, a letter asking for payment will be sent to you. The letter gives you the option of paying the entire claim, or paying by recoupment.
Recoupment is used by DHS in cases that are currently receiving benefits. Recoupment means that DHS will keep part of your current SNAP benefits each month until the overpayment is paid off. The amount that is taken from your monthly benefit amount through recoupment depends on the reason for the overpayment.
If DHS determined that the overpayment was caused by an Intentional Program Violation, the monthly recoupment amount is the greater of $20 or 20% of your current monthly benefit. For example, if your household currently gets $200 per month in food stamps DHS would take out $40 each month until the overpayment amount is paid back. This would leave you with $160 in food stamps each month.
If your overpayment was a client error, but was not an intentional program violation, the monthly recoupment amount is the greater of $10 or 10% of your current monthly benefit. For example, if your household currently receives $200 per month in food stamps, DHS would keep $20 per month until the overpayment amount is paid back. This would leave you with $180 in food stamps each month.
If you are no longer getting SNAP when you are charged with an overpayment, DHS will send you a letter asking for repayment. When you get the letter, you should work out a payment plan with DHS. You can pay the whole amount of the overpayment or make a payment plan to pay it back over time.
If you don't make a payment plan or if you don't make payments according to your payment plan for 90 days, your overpayment account will become "delinquent." When this happens, your case can be referred to:
- A collection agency
- The State Comptroller Offset System, which can take your state tax refund, lottery winnings or a state payroll check
- The Treasury Offset Program, which can take your federal tax refund, social security benefits, and other federal checks
- The Attorney General, for civil prosecution
- Your employer, to garnish your wages
- The Illinois Department of Employment Security (IDES), to garnish your unemployment benefits
If you file bankruptcy while you are in the process of repaying an overpayment, no one can try to collect from you after they are notified of the bankruptcy filing until a decision is made by the bankruptcy court.