SNAP overpayments Lawyer Manual

DHS will establish a claim against a unit that receives more SNAP benefits than it was entitled to receive.

There are three categories of SNAP overpayments:

• Agency error (AE)

• Inadvertent household error (IHE)

• Intentional program violation (IPV)

The state cannot collect agency error overpayments for any month that is more than 12 months before the date when the overpayment was discovered.

For units still receiving benefits, overpayments may be paid in full or paid via monthly recoupment. Recoupment for a SNAP overpayment is calculated as follows:

• For an IPV: the monthly recoupment amount is the greater of $20 or 20% of the monthly benefit the SNAP unit would receive if the person having the IPV was included.

• For an IHE or and AE: the monthly recoupment amount is the greater of $10 or 10% of the SNAP unit's monthly benefit.

Note: Before 8/22/96, the agency could not reduce benefits to collect agency error overpayment. DHS is now applying the new law retroactively, which advocates have successfully challenged in Stone v. Redell, 308 F.3d 751 (7th Cir. 2002).

Former SNAP recipients will receive a repayment demand letter which includes instructions on home to make payment arrangements with the Bureau of Collections. If former recipients fail to make payments on overpayment claims, the agency may refer an overpayment case to the State Comptroller for offsetting of any state check that may be due to the recipient, including unemployment insurance and state income tax refunds, or to the Federal Tax Refund Offset Program for offsetting a federal tax refund check. Social Security benefits (but not SSI benefits) can be offset up to 15% of the monthly payment amount to collect the overpayment. Note: the first $750 of monthly benefits is exempt.

Note: Overpayments that are not IPVs can usually be discharged in bankruptcy. Even if the SNAP recipient did not list the SNAP overpayment in the bankruptcy, it can still be considered discharged. In Re Mendiola, 99 B.R. 864 Bankr. N.D. Ill 1989.