- California’s $35 threshold
- Rate of collection
- Three-year limit on recoupment or collection
- No Equitable Estoppel in CalFresh
California’s $400 threshold
The Food and Nutrition Service (FNS) allows states to forego collecting administrative error overissuances below a set amount if the state determines collection below that amount is not cost-effective. [7 C.F.R. § 273.18(e)(2).]
California has decided that its cost effectiveness threshold is $400. [ACL 19-50.] This means that counties cannot collect agency-error overissuances of less than $400 on closed cases. [Id.] Grant reduction can continue on open cases regardless of the amount of the overissuance. [Id.] Inaction by the county, such as failing to have the applicant sign an application or to complete a work application also bars collection. [MPP § 63-801.121(a)-(c).]
Rate of collection
In California, for any administrative error overissuance, the rate of collection is the greater of 5% or $10.00 a month, whichever is greater. [MPP § 63-801.222.]
The CalFresh office must send a notice of overissuance before it can reduce a household’s CalFresh benefits. [MPP §§ 63-801.43, 63-801.732; 7 C.F.R. § 273.18(e)(3)(iii).] Any household member has the right to ask for a fair hearing on the overissuance and the action to reduce CalFresh benefits. (See the various sections about notices and fair hearings for related information.)
Three-year limit on recoupment or collection
The USDA Food and Nutrition Service (FNS) has national responsibility for the SNAP program and has authority to settle and adjust any SNAP overissuance claim. [7 U.S.C. § 2022(a)(1).] By regulation, the Secretary has delegated this authority to the state SNAP agencies, including California’s CalFresh program. [7 C.F.R. § 271.4(b).]
States are authorized by federal law to “settle or compromise” overpayments caused by agency error. Under the authority of that federal law, the court settlement in Lomeli v. Saenz requires the CalFresh program to recoup administrative error overissuances by a reduction in the allotment by 5% or $10 per month, whichever is greater, for no more than 36 consecutive calendar months. [See, “Compromising Administrative Overpayments – Lomeli v. Saenz Court Case,” ACL 00-59, and “Lomeli v. Saenz Court Case – Questions and Answers,” ACL 00-87.]
The first month of the 36-month period is the first month the allotment is adjusted to recoup the administrative error overissuance. If the person leaves CalFresh benefits after the allotment adjustment began, the 36 months continues running. Other collection methods may be used when the person is not receiving CalFresh benefits until the 36 months has lapsed. At the end of 36 months, any outstanding overissuance is forgiven and cannot be collected though further allotment adjustment or any other means. [See ACL 00-87, Question Nos. 5-7.]
The Lomeli settlement does not apply to administrative error overissuances where allotment adjustment began prior to March 1, 2000, nor does it apply to “former recipients” who left aid having administrative error overissuances. In those cases, there is no 36 month limit. [See ACL 00-59, page 2; ACL 00-87, Question No. 9.] Instead, the normal collection procedures apply.
No Equitable Estoppel in CalFresh
The defense of equitable estoppel, that is, detrimental reliance on incorrect information from the county welfare department, is unavailable in CalFresh overissuance cases. (63 Fed. Reg 29304, 20307 (1998) and 65 Fed. Reg. 41752, 41765 (2000).)