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Feb 26, 2020

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Rule change reduces the burden for SNAP recipients who are accidentally ‘over-paid’

by | Feb 26, 2020

Family Economic Security, Health

Coloradans experiencing poverty will benefit from a recent rule change by the State Board of Human Services regarding over-payments in the Supplemental Nutrition Assistance Program (SNAP).

Under Colorado’s old rules, participants who received too much in SNAP benefits due to a mistake in reporting their household data were effectively penalized at the same level as those who deliberately misrepresented the information. This meant that a household could end up owing hundreds or even thousands of dollars for an honest mistake in reporting.

An over-payment occurs when an agency uses incorrect information to figure out how much a SNAP household should be paid and gives the household too much in benefits. Over-payments can be a result of errors by the agency, errors in reporting by program participants or misrepresentation of data by program participants. Most over-payments are caused by agency or participant error.

Even when the over-payment is the result of an agency’s error, the program participant is still expected to pay it back under federal law. The repayment period can span as long as six years, but states have the option of using a shorter time period. (The penalty for an intentional program violation is fixed by federal law at six years.)

Until recently, Colorado opted for the most stringent look-back period for calculating an over-payment based on client error. Fortunately, the Feb. 7 ruling from the State Board of Human Services will alleviate this stringent financial burden by limiting the “look-back period” for calculating over-payments to just one year.

Under the old rule, if a SNAP household made a reporting mistake and the agency kept issuing the incorrect benefits for years afterwards, program participants could unknowingly amass large debts until the mistake was discovered. Families who were overpaid and still receiving SNAP could have their monthly grant reduced by $10 or 10 percent, whichever was greater, until the amount they owed was paid. Families that were no longer on the program were required to enter a repayment plan or have collection actions taken against them, including seizure of tax refunds or wage garnishment.

A six-year look-back period also sets an unrealistically high burden of proof for participants who wanted to demonstrate they were not overpaid. Few people keep pay stubs and other financial information for six years. Even if participants suspected they were not overpaid and the error was caused by the agency, they frequently did not have enough evidence to support their side of the story.

Either way, families already experiencing poverty could be repaying on the surprise debt for years. With the rule change, even if a mistake goes undiscovered for more than a year, the household will only have to repay one year’s worth of over-payments.

Advocates united over change
CCLP first learned about the issue through our partner agency, Colorado Legal Services (CLS). Attorneys for CLS were seeing clients who had SNAP debts for $30,000 or more. These families had no hope of paying off such large sums in a reasonable time-frame. CCLP conducted research into the issue and found that many other states, including other Western states like Utah, North Dakota, and South Dakota were using a one-year look-back to calculate client error over-payment claims.

We then teamed up with Hunger Free Colorado (HFC) to advocate for this change with partners at Colorado Department of Human Services, which involved many meetings over the span of years. This advocacy also involved participating in State/County Work Group meetings, and speaking out to address concerns raised by a few counties that were participating. We also brought this issue to the attention of the Blueprint to End Hunger, a coalition of stakeholders working to end hunger in Colorado. Ultimately, this rule change was supported by that coalition, HFC and the Colorado Health Foundation, which signed off on a letter of support that was distributed to the State Human Services Board.

Now that the look-back period for calculating over-payment claims caused by inadvertent household error is one year, we estimate this could save SNAP households as much as $1 million per year in repayments. In terms of next steps, we are hoping to see this policy change applied to existing cases in which a household owes a debt that exceeds one year’s worth of over-payment.

We are hopeful that the shorter look-back period will make the program more attractive to eligible individuals, who may have feared signing up would land them in years of debt for making a reporting mistake. Only about 60 percent of eligible Colorado households are signed up for SNAP, which puts our state near the bottom of all states. Removing barriers such as the six-year look-back period will make it easier for Coloradans to get the food and nutrition they and their families need.

We applaud our partners at the Colorado Department of Human Services for implementing this policy, which will remove another barrier to SNAP participation for Coloradans experiencing food insecurity. We also gratefully acknowledge the advocacy support of our colleagues at Colorado Legal Services, Hunger Free Colorado, the Blueprint to End Hunger and the Colorado Health Foundation.

-By Sara Lipowitz

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Recent articles

CCLP testifies in support of TANF grant rule change

Apr 15, 2024

CCLP's Emeritus Advisor, Chaer Robert, provided written testimony in support of the CDHS rule on the COLA increase for TANF recipients. If the rule is adopted, the cost of living increase would go into effect on July 1, 2024.

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Apr 5, 2024

For the 2024 legislative session, CCLP is keeping its eye on bills focused on expanding access to justice, removing administrative burden, preserving affordable communities, advocating for progressive tax and wage policies, and reducing health care costs.

HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.