What happens if a person loses the fraud hearing, or signs a hearing “waiver” or “disqualification consent agreement”?

Exclusion from CalFresh and for how long

Two things will happen if a person loses a fraud hearing, or signs a waiver or disqualification consent agreement: (1) The person is excluded from the CalFresh program for a period of time; and (2) an overissuance is assessed against the entire household. The person will be sent a notice of disqualification. [MPP § 20-300.25.] The notice must inform the household of the decision, the reason for it, the penalty, and the effective date of the disqualification. [Id.]

The person found guilty of fraud will stop receiving CalFresh benefits a month after the notice is sent or within 45 days of an agreement or a court order. The Food and Nutrition Act requires that the period of disqualification begins “immediately upon the rendering of” a decision against the recipient in a disqualification hearing. [7 U.S.C. § 2015(b)(1).] This is true regardless of whether the household is currently participating in the CalFresh Program. [See Garcia v. Concannon, 67 F.3rd 256 (9th Cir. 1995).] The federal regulations, however, require postponement of disqualification for persons who are not participating in the program at the time a finding of an intentional program violation (IPV) is made. [7 C.F.R. § 273.16(e)(8)(iii), (g)(2)(ii), (h)(2)(ii); MPP §§ 20-300, 20-300.4.]

Only the person found guilty of fraud is disqualified. [7 C.F.R. §§ 273.16(b)(1), 273.16(e)(8)(i); MPP §§ 20-300.31, 20-300.32.] The rest of the household can keep getting CalFresh benefits. [Id.]

When the person is found to have committed an intentional program violation — i.e., after having been found guilty of fraud by a court or hearing, or signs the disqualification consent agreement — the person is barred from getting CalFresh benefits for:

  • One year — for the first IPV.
  • Two years — for the second IPV.
  • Disqualified forever — for the third IPV.

[MPP § 20-300.311.]

Calculating benefits after an intentional program violation

While the person found guilty of fraud is disqualified from CalFresh benefits, the county office will count all of the person’s income and resources when it decides if the rest of the household can get CalFresh benefits. [7 C.F.R. § 273.11(c)(1)(i); MPP § 63-503.441(a).] But the CalFresh office will not count the person disqualified for fraud when counting how many people are in the household, to decide how many CalFresh benefits the rest of the household can get. [7 C.F.R. § 273.11(c)(1)(ii); MPP § 63-503.441(b).]

Collection of overpaid benefits after an intentional program violation

When a member of the CalFresh household has committed an IPV, the CalFresh office will ask the entire household to pay back the benefits that the household got by fraud. [MPP § 20-300.25.] The overissuance is collected at the rate of the greater of 20% or $20.00 per month, rather than the usual rate of 5% or 10%. [7 C.F.R. §§ 273.16(b)(12), 273.18(g)(1)(ii); MPP §§ 20-300.25, 63-801.736(b).]

The demand notice will include information on the amount of the overissuance and payment options. [MPP §§ 20-300.25, 63-801.43.] (For related information, see the sections about the overissuance demand notice and how overpaid benefits are collected). If the disqualification hearing notice or the waiver form did not spell out the amount of the CalFresh overpayment and the household did not have an opportunity to challenge the county’s calculations, the household should get a separate notice and opportunity to challenge the amount they have to pay back.

Households must pay this money back in cash or by having the household’s CalFresh benefits reduced until all of the overissued benefits related to the intentional program violation are paid back. [7 C.F.R. §§ 273.16(b)(12), 273.18(g); MPP §§ 20-300.25, 63-801.7.] If the household agrees to pay back the overissuance in cash, the household can do it all at once, or in installment payments. Other collection methods such as tax intercepts may also be used by the county to collect the IPV.