10 Colo. Code Regs. § 2506-1-4.801
A claim shall be established when a household is over-issued benefits. An over-issuance means the amount by which SNAP benefits issued to a household exceeds the SNAP allotment.
Claims shall be classified as follows:
Prior to a waiver or consent agreement being signed or the determination of IPV/fraud, the claim against the household shall be handled as an inadvertent household error claim.
A claim associated with an IPV must be calculated back to the month the act of IPV first occurred and cannot be established for a period more than six (6) years from the date the local office was notified, in writing or orally, or discovered through the normal course of business, that an error occurred which led to the household receiving more benefits than it was entitled to receive.
Local offices shall establish all claims before the last day of the quarter following the quarter in which the over-issuance or trafficking incident was discovered.
If the full amount or remaining amount of an AE or IHE claim cannot be liquidated in three (3) years, the local office may compromise the claim by reducing it to an amount that will allow the household to pay the claim in three (3) years. IPV claims shall not be compromised, unless specified in a court decision. The local office may use the full amount of the claim, including any amount compromised, to offset lost benefits. Decisions regarding compromises shall be documented in the case record.
A payment plan on a claim that has been compromised may be renegotiated if necessary. Claims that are already reduced by either an administrative or district court order are considered compromised claims, and thus are not eligible for additional compromise.
Local offices shall review the household's circumstances and determine if a compromise would be appropriate. Local offices do not have the option of refusing to consider compromising claims. Local offices cannot institute a policy of never compromising claims
Claims should be compromised if the household demonstrates need, such as the inability to repay the claim within three (3) years, or if the household proves that financial, physical, or mental hardship would exist if forced to pay the full amount of the original claim. Some circumstances include, but are not limited to, medical hardships, high shelter costs, loan payments, and other extraordinary expenses. A compromise based on hardship may be applied to a SNAP case regardless of whether the household is still receiving SNAP benefits.
Consideration should be given to the future earning potential of the household over the next three (3) years to pay back the claim based on age, disability, and other household factors.
The value of claims resulting from trafficking related offenses is the value of the trafficked benefits as determined by the individual's admission, through adjudication, or the documentation that forms the basis for the trafficking determination. Documentation could include such items as notarized statements or printouts from the EBT systems.
If a household receives both TANF and SNAP and mis-reports information to TANF in accordance with the TANF reporting requirements, and the mis-report of information to TANF resulted in the household being over-issued TANF or ineligible for TANF, any resulting SNAP claim should be based on the actual TANF issued.
In cases where a household member was found guilty of fraud by a court of appropriate jurisdiction, the local office should request that the matter of restitution be brought before the court or addressed in the agreement reached between the prosecutor and individual.
All adult household members aged eighteen (18) years or older at the time the over-issuance occurred, sponsors, or other persons, such as an authorized representative who trafficked or otherwise caused an over-issuance or trafficking to occur, that are connected with the household shall be jointly and severally liable for the value of any over-issuance of benefits to the household.
Collection action on IHE claims may be postponed in cases where an over-issuance is being referred to an ADH or a court of appropriate jurisdiction, and the local office determines that collection action will prejudice the case. For cases in which the household is appealing an AE or IHE claim, collection action shall be suspended pending a final decision. A household's appeal may include, but not be limited to, the establishment of the claim, the amount of the claim, and/or the household's liability to repay the claim.
Local offices shall initiate collection action on agency error and inadvertent household error claims by sending the household a State-prescribed written demand letter for the over-issuance. The letter shall inform the household of its rights and responsibilities concerning repayment of the claim as well as providing information on the availability of free legal services. All households that owe a claim shall be sent a demand letter. If the claim or the amount of the claim was not established at a fair hearing, the state agency must provide the household with a one-time Notice of Adverse Action. If the hearing official determines that a claim does, in fact, exist against the household, the household must be re-notified of the claim. The demand for payment may be combined with the notice of the hearing decision. Delinquency must be based on the due date of this subsequent notice and not on the initial pre-hearing demand letter sent to the household.
The local office shall mail the household an explanation of how the claim was calculated, showing each individual month and the cause for the claim. The State-prescribed form shall be used to determine and calculate the amount of the claim and to notify the household of the calculation. The form shall be mailed on a schedule that coincides with the mailing of the demand letter.
Households participating in the program are subject to allotment reduction in accordance with Section 4.801.41. B, unless the claim is being collected at a higher amount, per agreement with the household. Allotment reduction must begin with the first allotment issued ten (10) calendar days after the demand letter is mailed.
When a household is subject to allotment reduction, then a repayment agreement is not necessary unless the household wants to make voluntary payments in addition to the allotment reduction or elects to make monthly payments in amount greater than what would be repaid through allotment reduction.
If a household is not participating in the program, then the local office shall negotiate a payment schedule with the household for repayment of any amounts of the claim not repaid through a lump sum payment.
The local office shall negotiate a payment schedule with the household for repayment of any amounts of the claim not repaid through a lump sum payment or through allotment reduction. Payments shall be accepted in regular installments. The household may use SNAP benefits as full or partial payment of any installment. The local office shall ensure that the negotiated amount of any payment schedule to be repaid each month through installment payments is not less than the amount that could be recovered through an allotment reduction. Once negotiated, the amount to be repaid each month through installment payments shall remain unchanged regardless of subsequent changes in the household's monthly allotment. However, both the local office and the household shall have the option to initiate renegotiation of the payment schedule if they believe that the household's economic circumstances have changes enough to warrant such action.
If the household is not participating in the program when collection action for claim is initiated or if collection action has been initiated for repayment of a claim and no response is made to the first (1st) demand letter, additional demand letters shall be sent at reasonable Intervals, such as thirty (30) calendar days apart. The demand letters shall be sent until the household responds by paying or agreeing to pay the claim, until the criteria for suspending collection has been met or until the local office initiates ether collection actions.
If the hearing officer determines that a claim does in fact exist against the household, the household shall be sent another demand letter. Delinquency shall be based on the due date of this subsequent demand letter and not on the initial pre-hearing demand letter sent to the household. If the hearing officer determines that a claim does not exist, the claim is deleted and shall be terminated, and all collection activity ceased.
An unspecified joint collection is when funds are received in response to correspondence or a referral that contained both the SNAP and other program claims, and the debtor does not specify to which program to apply the payment. The local office shall ensure that unspecified joint collections are pro-rated among the programs involved. When an unspecified joint collection is received for a combined PA and SNAP claim, each program shall receive its prorated share of the amount collected.
The local office shall collect claims through one of the following methods:
The local office shall collect payments for total or partial payments of a claim in one lump sum if the household is financially able to pay the claim; however, the household shall not be required to liquidate all of its resources to make this repayment. If the household requests to make a lump sum cash and/or food benefit payment as full or partial payment of the claim, the local office shall accept this method of payment.
Prior to reduction, the local office shall inform the household of:
The local office may collect on a claim by invoking benefit allotment reduction on two (2) separate households for the same claim. However, the local office is not required to perform this simultaneous reduction.
The local office shall obtain written permission from the household to deduct benefits from the EBT account to pay a claim. The written agreement shall be obtained prior to removing benefits from the EBT account and shall include:
Prior to certifying the taxpayer's name and other information to the Department of Revenue, the state department shall notify the taxpayer in writing at his or her last known address that the state intends to use the tax refund offset to recover the over-issuance. The pre-offset notice shall include the name of the local office claiming the over-issuance, a reference to SNAP as the source of the over-issuance, and the current balance owed.
The taxpayer is entitled to object to the offset by filing a request for a DRC or state-level hearing within thirty (30) calendar days from the date the state department mails the pre-offset notice to the taxpayer. At the hearing on the offset, the local office or administrative adjudicator shall not consider whether an over-issuance has occurred, but may consider, if raised by the taxpayer in his or her request for a hearing, whether:
The TOP, including the Federal Salary Offset Program (FSOP), is a mandatory government-wide delinquent debt matching and payment offset system in which Colorado SNAP participates.
The TOP allows collection of delinquent debts by intercepting any allowable payment from the federal government. Federal payments eligible for offset include federal income tax refunds, federal employee salary, federal retirement payments (including military), contractor or vendor payments, and federal benefits such as Social Security and railroad retirement.
TOP, including the FSOP, is authorized to apply a processing fee each time a successful offset for collection occurs. Federal payroll offices participating in the TOP process may add another separate processing fee. The delinquent SNAP debtor is responsible for the fee each time it is applied. A TOP offset taken in error and later refunded will have the processing fee refunded, except for partially refunded offsets.
At the time delinquent debts are sent to be certified to the FNS for intercept by the TOP, all delinquent debts for every individual are sent at one time. Prior to a claim being certified to the FNS as a debt owed to the local office, the individual shall be mailed an offset notice. The notice shall provide the following information:
The provisions within this section apply to Agency Error (AE) claims, Inadvertent Household Error (IHE) claims, and intentional Program violation (IPV) claims, unless otherwise stated.
The provisions within this section apply to Agency Error (AE) claims, Inadvertent Household Error (IHE) claims, and intentional Program violation (IPV) claims.
Voluntary payments from a household on a terminated claim do not reactivate the claim. A terminated claim cannot be reactivated to pursue collection.
In cases where a household moves out of the state, the local office that last handled the case involving a claim may initiate or continue collection action against the household for any over-issuance that occurred while the household was under that local office's jurisdiction. Counties may transfer a claim to another state or Colorado county if the other state or Colorado county accepts the transfer.
Counties are not obligated to accept the transfer of a claim from another state or Colorado county but have the option of accepting the claim and pursuing collection on that claim. Counties that accept the transfer of a claim shall pursue collection activities and retain appropriate incentives for the collection.
Counties may retain twenty percent (20%) of collections from inadvertent household error claims and thirty-five percent (35%) of collections from intentional Program violation/fraud claims. The total amount of collections from agency error claims is retained by the USDA, Food and Nutrition Service.
The FNS-209 Report (Status of Claims against Households) is an automated report and is run quarterly. The report is utilized to reflect all claims activities during a quarter and reflects all the payments made during the quarter. SNAP benefits received as a claim payment shall be recorded in the automated system and any corrections that need to be made to payments are made through the automated system.
The report is available for review from the first of the month immediately following the end of the quarter and continues to be available through the last working day of the quarter. A consolidated final report is available to be printed by local offices following the last working day of the quarter.
This FS-209 report is run quarterly even if the local office has not collected any payments or other claims activities. The local office shall not be required to submit Form FS-209 if the material on the automated system FS-209 is accurate and complete for that local office.
10 CCR 2506-1-4.801