What is the correct amount of a CalFresh overissuance?

Generally, the amount of a CalFresh overissuance is the difference between the amount of benefits the household actually received and the amount it should have received if no mistake had been made by either the CalFresh office or the person. [MPP §§ 63-102(o)(1), 63-102(r)(2); 7 C.F.R. § 273.18(a)(1).] For “trafficked” CalFresh benefits, it is the amount trafficked. [7 C.F.R. § 273.18(a)(1)(ii); MPP § 63-801.33.]

When determining the amount of a CalFresh overissuance, counties must recreate the circumstances of the case, that is they must calculate the amount of the overissuance by determining the difference between the amount of benefits the household should have received and the amount the household actually received. [ACL 24-23.] The county must not consider income changes that the household was not required to report unless the change would result in increased benefits. [Id.]

For cases where the recipient did not make a mandatory mid-period income report, the county must use the household’s actual gross income.  Counties cannot use the conversion factor (4.3 times weekly earnings) to determine if a recipient has missed a required report of income over the Income Reporting Threshold. [Id.]

There is one situation in which the amount of the overissuance is not simply the difference between the amount of CalFresh benefits the household actually received and the amount it should have received. If the household did not report a job or an increase in earnings when it was supposed to, then the household may end up paying back more in CalFresh benefits than they would have received. This is because if a household does not report earned income on time, they will not get the benefit of the 20% earned income deduction that is part of the normal CalFresh calculation. Instead, the CalFresh office will count all the income when calculating how much CalFresh benefits the household should have received. [See MPP § 63-801.312(c)(for household and agency error), § 63-801.323 (for intentional program violations); 7 C.F.R. § 273.18(c)(1)(ii)(B).] Counting all of the income, without giving the 20% earned-income deduction, is a penalty for not reporting the income on time.  Note that for an administrative error overissance, the county must apply the earned income deduction.  [ACL 24-23.]

In computing the amount of the overpayment, the county must use the CalWORKs and CalFresh amount that the household should have received if the household has correctly reported and the county had taken timely action.  [ACIN I-16-05E.]  For example, if a household has income that was not considered when determining the CalWORKs and CalFresh grants, the CalFresh overissuance is determined using the corrected amount of CalWORKs as income, that is, the lower CalWORKs grant caused by the increase in income.  About this issue, ACIN I-16-05 is incorrect and is corrected by ACIN I-16-05E.  ACL 03-18 is correct.

The overissuance demand letter or notice of action must show the CalFresh office’s calculations. If the CalFresh office has made a mistake, request a fair hearing.

Here are some things to check on the demand letter to see if the calculation is correct:

  • The reason for the overissuance, including whether the CalFresh office thinks that the overissuance was due to an intentional program violation (IPV), an inadvertent household error or an agency (administrative) error, because this will make a difference in how much current CalFresh benefits can be reduced and what steps can be taken to collect.
  • Has the CalFresh office included the correct amount of income — both earned and unearned — for each month of the overissuance? Some kinds of income are “excused,” i.e., they do not count. (For more information, see the section about the definition of income.)
  • Has the CalFresh office used the correct household size, and all the other deductions to which the household entitled, such as the correct excess shelter deduction or dependent care deduction?
  • Has the CalFresh office used the correct months in calculating the overpayment? [MPP §§ 63-801.311, 63-801.321.]
  • Has the CalFresh office used the correct months in calculating the overissuance, and has it correctly counted the income backward or forward? (For more information, see the sections about prospective budgeting (semi-annual reporting households), and applicable applicant budgeting rules.)
  • If excess resources are the cause of the overissuance, should they have been excluded or not counted because the household is categorically eligible? (For more information, see the sections about resource exclusions and those people who leave the CalWORKs program.)
  • If anyone in the household is elderly or disabled, has the CalFresh office mistakenly applied the gross income test to the household? Or placed a limit on the amount of the excess shelter deduction the household can receive? (For more information, see the sections about income limits and how income deductions are applied.)
  • Has the CalFresh office “expunged,” i.e., taken back, CalFresh benefits because the household did not use the benefits on the EBT card for a year? If so, then the office must reduce the amount of any overissuance later by the amount of the CalFresh benefits that were expunged. [7 C.F.R. §§ 273.18(c)(1)(ii)(D), 273.18(g)(2)(ii)(c); MPP § 16-750.13.]