The California Department of Social Services has issued instructions about CalWORKs underpayments and supplemental payments.
An underpayment occurs when the applicant or recipient receives less than the amount of aid they are entitled to in any given month. Counties must take all reasonable steps to promptly correct underpayments. Counties must correct underpayments for current recipients no later than the next annual redetermination or date of termination of benefits, whichever is earlier. For reapplications and requests for restoration of aid, counties must correct underpayments within 60 days of the date aid is granted. In all other cases, counties must correct underpayments within 60 days of a request for review.
Underpayments do not occur when the client does not voluntarily report a mid-period change.
Counties can offset overpayments from underpayments. However, prior to offsetting, the county must properly establish the overpayment and provide a notice of action to the client.
A supplemental payment is issued to a recipient for the current month when the county recalculates the grant for the current month because of a change in circumstances and determines a client is eligible for a larger payment than was issued. Supplemental payments are not subject to offsetting with overpayments. Mid-period supplemental payments from a voluntary mid-period report are not underpayments and are not subject to offsetting.
An overpayment is any amount paid that the assistance unit was not entitled to. An overpayment does not occur when an applicant or recipient fails to perform an act that is a condition of eligibility for aid, the failure to act is caused by state agency or county error and the amount of aid would have been the same if the condition had been performed.
Counties cannot demand repayment of nonfraudlent overpayments that are less than $35 from persons no longer receiving aid. Counties can demand repayment of nonfraudlent overpayments that are more than $35 from persons no longer receiving aid but no further collection efforts can be made if the county determines that the cost of collection is more than the amount to be recovered. (ACIN I-45-18, July 19, 2018.)