Benefit payment error and correction. Administrative disqualification hearings.

(a) Definitions. As used in this section, the following terms shall have the following meanings: (1) "Overpayment" means an amount of benefits issued to an assistance unit by the department in excess of the amount of benefits to which such assistance unit was properly entitled; and (2) "Underpayment" means an amount of benefits to which an assistance unit was properly entitled that the department did not issue to such assistance unit. (b) Correcting an underpayment. (1) The department shall investigate and correct any past underpayment when such underpayment is discovered, regardless of when the underpayment occurred or whether the underpaid assistance unit's case has been closed. The investigation required pursuant to this subsection shall occur prior to the issuance of a corrective payment and shall be for the purpose of determining whether such assistance unit also experienced a past overpayment that has not been recouped. If the investigation reveals such an overpayment, the department shall offset the overpayment against the underpayment and, if the underpayment was larger than the overpayment, issue a corrective payment that is equal to the difference between the underpayment and overpayment. Any corrective payment issued pursuant to this subsection shall be issued to an appropriate payee: (A) Not later than the next benefit issuance date that is part of the normal payment cycle if the assistance unit's case is still open, and (B) as soon as possible if the assistance unit's case is closed. The provisions of this subsection shall apply to underpayments resulting from benefits incorrectly issued during one month or during multiple months. (2) Any corrective payment issued by the department pursuant to this subsection shall be treated as excluded income in the month received, as an excluded asset to the extent retained in the month after it is received and as a counted asset to the extent retained in any subsequent month. (c) Recouping an overpayment. (1) The department shall investigate and take action in accordance with this subdivision with respect to any past overpayment when such overpayment is discovered, regardless of when the overpayment occurred or whether the overpaid assistance unit's case has been closed. The investigation required pursuant to this subsection shall occur prior to the department taking action with respect to the discovered overpayment and shall be for the purpose of determining whether such assistance unit also experienced a past underpayment that has not been corrected, and whether overpaid benefits were subsequently expunged from the assistance unit's electronic benefits transfer account pursuant to subsection (d) of section 17b-198-12 of the Regulations of Connecticut State Agencies. If the investigation reveals a past underpayment or expungement of benefits, the department shall offset the underpayment or expungement against the overpayment. If there was no underpayment or expungement, or if the overpayment was larger than the underpayment or expungement, the department shall, following consultation with the assistance unit, take one of the following actions not later than the last day of the calendar quarter after the quarter in which the overpayment was discovered: (A) Execute an agreement for the recoupment of the outstanding balance of the overpayment from the assistance unit in a lump sum, if such assistance unit elects to repay all or a portion of the overpayment by this method and has income and assets that are sufficient to allow such assistance unit to repay such overpayment by this method; (B) Execute a monthly recoupment agreement with the assistance unit for the gradual recoupment of such overpayment by monthly installment payments if such assistance unit elects to repay the overpayment by this method; (C) Begin to recoup such overpayment by reducing the monthly benefits issued to such assistance unit if the assistance unit's case remains open and the assistance unit (i) specifically expresses an unwillingness or inability to repay the overpayment by the methods described in subparagraphs (A) and (B) of this subdivision, (ii) fails to honor an agreement entered into pursuant to subparagraphs (A) and (B) of this subdivision, or (iii) refuses to discuss the overpayment with the department or respond to notice of the overpayment provided by the department; (D) Initiate an action with the Department of Administrative Services to locate and recoup the overpayment, if the assistance unit's case is closed and the assistance unit refuses to cooperate with alternative methods of recoupment; (E) Execute an agreement for the recoupment of all or a portion of the outstanding balance of the overpayment from SAGA benefits in the assistance unit's electronic benefits transfer account, or (F) Pursue recoupment through any combination of methods set forth in this subdivision. (2) In addition to recouping an overpayment from the assistance unit that received the overpayment, the department shall recoup such overpayment from the spouse of the member of such assistance unit by any method outlined in subdivision (1) of this subsection, provided such spouse lives in the same household as such member and is a member of a separate assistance unit that receives assistance pursuant to SAGA. (3) If the department recovers money paid as SAGA benefits to or on behalf of an assistance unit for a particular month, as described in section 17b-198-18 of the Regulations of Connecticut State Agencies, and an overpayment is discovered to have occurred in such month, the department shall subtract from the overpayment the amount of money so recovered. (4) Unless a recoupment rate has been established to the contrary by a court or pursuant to a recoupment agreement, the department shall gradually recoup an overpayment from an assistance unit or spouse of an assistance unit, whether by installment payments or a reduction in benefit payments, on a monthly basis in an amount equal to ten per cent of such assistance unit's or spouse's present monthly assistance payment or, if such assistance unit or spouse is no longer receiving assistance pursuant to SAGA, in an amount equal to ten per cent of such assistance unit's or spouse's last assistance payment that was issued for a full month. The department shall recoup an overpayment of assistance only from that portion of such a monthly assistance payment attributable to SAGA benefits. Unless expressly requested by the assistance unit or spouse from whom recoupment is sought, the department shall not recoup an overpayment when the monthly SAGA benefit payment made to the assistance unit or spouse, as the case may be, is ten dollars or less. The case of an assistance unit whose monthly benefit payment is entirely eliminated pursuant to such an express request shall be considered active and open even while no benefit payments are issued to such assistance unit. (5) The provisions of this subsection shall apply to overpayments resulting from benefits incorrectly issued during one month or during multiple months. (d) Notice of corrective action. Prior to taking action to correct an underpayment or recoup an overpayment, the department shall provide notice to the assistance unit of its intent to make such correction or recoupment. Such notice shall include, at a minimum, the following information: (1) The type of error that occurred; (2) The amount of the overpayment or underpayment; (3) The specific cause of the error based upon the department's investigation to date; (4) The time period during which such error occurred; (5) The amount of any offsetting done to reduce the error; (6) The department's proposed method for correcting the error; (7) A statement indicating that the assistance unit has a right to participate in the selection of the method that will be used to correct the error; (8) A statement indicating that the assistance unit has a right to request a fair hearing to dispute the department's finding of benefit issuance error, the amount of such error and the selected method for correcting the error; and (9) A statement indicating that the assistance unit has a right to be represented by legal counsel during any such fair hearing and whether free legal counsel is available. (e) Classifying overpayments. (1) The department shall classify an overpayment of benefits as the result of department error in instances where the department is solely responsible for such overpayment, including, but not limited to, when the department: (A) Fails to take timely action after an interim change adversely affecting an assistance unit's continued eligibility for assistance or the appropriate level of assistance is reported by such assistance unit; (B) Incorrectly computes the assistance unit's income or needs; (C) Fails to ensure that the assistance unit meets all eligibility criteria; or (D) Makes a data entry or other processing error. (2) The department shall classify an overpayment of benefits as the result of unintentional recipient error when: (A) The assistance unit failed to timely report an interim change in circumstances that adversely affected such assistance unit's continued eligibility for assistance or the appropriate level of assistance, but verifies circumstances constituting good cause for such failure, as described in subsection (f) of section 17b-198-14 of the Regulations of Connecticut State Agencies; (B) Either the department, through the administrative disqualification hearing process, or a court of appropriate jurisdiction determines that the assistance unit member was unaware of the need to report the information that adversely affected such assistance unit member's continued eligibility for assistance or the appropriate level of assistance had to be reported; or (C) The department elects not to seek a penalty against an assistance unit member, either through a court procedure or the administrative disqualification hearing process, for what would otherwise constitute intentional recipient error pursuant to subdivision (3) of this section. (3) The department shall classify an overpayment of benefits as the result of intentional recipient error when: (A) The department makes a preliminary determination that: (i) The assistance unit member failed, without good cause, as described in subsection (f) of section 17b-198-14 of the Regulations of Connecticut State Agencies, to timely report an interim change adversely affecting continued eligibility for assistance or the appropriate level of assistance; (ii) The assistance unit member knowingly misinformed the department regarding information that would otherwise adversely affect such member's continued eligibility for assistance or the appropriate level of assistance; or (iii) The assistance unit member committed an illegal or fraudulent act or omission that resulted in such overpayment, such as, but not limited to, falsely claiming circumstances that resulted in the department issuing a benefit replacement payment while such member maintained access to the initial benefit payment; (B) A final determination that the overpayment was due to the assistance unit member's intentional act or omission either: (i) Is made by a court of appropriate jurisdiction or the department through the administrative disqualification hearing process; or (ii) Results by operation of law due to such member's waiver of his or her right to an administrative disqualification hearing on the department's preliminary determination; and (C) The department elects to seek a penalty against the assistance unit member, either through a court procedure or the administrative disqualification hearing process. (f) Preliminary determination of intentional recipient error. (1) When the department makes a preliminary determination of an intentional recipient error that resulted in an overpayment, as described in subdivision (3) of subsection (e) of this section, the department shall, regardless of overpayment size: (A) Conduct an administrative disqualification hearing or consult with the Division of Criminal Justice to determine whether to refer the case to the Division of State Police within the Department of Emergency Services and Public Protection, the appropriate prosecuting authority for criminal prosecution or the office of the Attorney General for civil recovery; and (B) Take immediate action to initiate recoupment of the overpayment and continue such recoupment process, regardless of whether the recipient error is ultimately classified as unintentional. (2) The department shall conduct an administrative disqualification hearing whenever, after consultation with the Division of Criminal Justice, the department decides not to refer a case to the Division of State Police, the appropriate prosecuting authority or the office of the Attorney General, or, after any such referral, the Division of State Police, the appropriate prosecuting authority or the office of the Attorney General notifies the department that it will not take action on the referred case. (3) The department shall not conduct an administrative disqualification hearing if, after a case is referred to an appropriate prosecuting authority, a legal action is commenced against the assistance unit member in a court of appropriate jurisdiction and such legal action results in any disposition other than a conviction or plea of guilty. The department shall classify the overpayment of benefits in any such case as unintentional recipient error. (g) Eligibility pending completion of administrative disqualification hearing process. Whenever the department makes a preliminary determination that an assistance unit member committed intentional recipient error that, if corrected, would have an adverse impact on such assistance unit's eligibility for or appropriate level of assistance pursuant to SAGA, the department shall promptly provide advance notice of its intent to terminate or reduce such assistance in accordance with the provisions of section 17b-198-15 of the Regulations of Connecticut State Agencies. Any such termination or reduction of assistance shall be considered an interim change, subject to a fair hearing, and shall not be accompanied by a disqualification penalty or recoupment action until such time as a final determination regarding intentional recipient error is made. (h) Notice of an administrative disqualification hearing. Right to a pre-hearing interview. Upon making a preliminary determination that an assistance unit member committed intentional recipient error, the department shall provide notice to such member of the department's intent to hold an administrative disqualification hearing. Such notice shall be sent not later than thirty days prior to the date scheduled by the department for such hearing and shall include, at a minimum: (1) A statement explaining the assistance unit member's right to participate in, and the date, time and place of, a pre-hearing interview at which such member will have an opportunity to: (A) Discuss and review the evidence supporting the department's preliminary determination of intentional recipient error; (B) Receive an explanation of the administrative disqualification hearing process; (C) Receive a detailed explanation of the assistance unit's right to waive such a hearing and the ramifications of doing so; and (D) Discuss repayment arrangements, if such member intends to waive his or her right to such a hearing; (2) The date, time and place of such hearing; (3) An explanation of the reasons for such hearing; (4) A warning that a final decision regarding whether the assistance unit member committed intentional recipient error will be based solely upon the information and evidence gathered by the department if such member fails to appear and participate at such hearing; (5) An explanation of the assistance unit member's legal rights with respect to the administrative disqualification hearing; (6) A statement that the administrative disqualification hearing does not preclude additional civil or criminal action against the assistance unit member; (7) A statement concerning the availability of free legal representation; (8) Information about the circumstances under which the department will reschedule the administrative disqualification hearing for good cause; and (9) The department's contact information and a statement that the assistance unit member may contact the department to request additional information. (i) Waiver of administrative disqualification hearing. (1) The notice required pursuant to subsection (h) of this section shall be accompanied by a form that the assistance unit member may use to waive his or her right to an administrative disqualification hearing. An assistance unit member may waive the right to an administrative disqualification hearing by completing, signing and returning such form to the department. Such waiver shall be equivalent to and carry with it all the penalties associated with a finding of intentional recipient error made by a court or by the department following an administrative disqualification hearing, regardless of whether such member admits guilt. An assistance unit member who waives the right to an administrative disqualification hearing may withdraw such waiver in writing not later than ten days after the date on which the waiver form was signed. (2) The waiver form described in subdivision (1) of this subsection shall include, at a minimum, the following: (A) The date by which the waiver must be signed by the assistance unit member and received by the department to avoid the administrative disqualification hearing process; (B) A statement explaining the assistance unit member's right to remain silent and avoid self-incrimination; (C) A space for the assistance unit member to either admit or deny the allegation of intentional recipient error; (D) A space for the assistance unit member's signature; (E) A statement explaining that waiving the right to an administrative disqualification hearing will result in the assistance unit member being disqualified for the applicable period, as set forth in subsection (l) of this section, even if such member does not admit guilt; (F) A statement explaining that the department will take measures to recoup the overpayment; (G) A statement explaining that the assistance unit member may withdraw his or her waiver not later than ten days after the date he or she signs the waiver form; and (H) Contact information for requesting additional information or free legal services, if available. (j) Format of the administrative disqualification hearing. Content of decision. (1) The hearing official assigned to the administrative disqualification hearing shall conduct such hearing in the same manner as a fair hearing and shall fulfill the same duties expected of a hearing official in a fair hearing. The hearing official shall advise the assistance unit member or such member's representative of the right to remain silent and avoid self-incrimination during the administrative disqualification hearing. If the assistance unit member or such member's representative fails to appear at the scheduled administrative disqualification hearing, the hearing official shall conduct such hearing in the absence of such member or representative, and shall base his or her decision on the evidence before him or her. A finding of intentional recipient error shall be supported by clear and convincing evidence. (2) Following the administrative disqualification hearing, the hearing official shall issue a notice of decision explaining his or her final determination of whether the assistance unit member committed intentional recipient error. Such notice shall: (A) Specify the reasons for the final determination; (B) Identify the evidence upon which such determination is based; (C) Cite any applicable statute or regulation upon which such determination is based; (D) Respond to any reasoned arguments submitted by the assistance unit member or such member's representative; and (E) Specify the effective date and length of any period of disqualification of eligibility for assistance pursuant to SAGA, if the assistance unit member is determined to have committed intentional recipient error. (k) Processing standards for the administrative disqualification hearing process. (1) Except as provided in subdivisions (2) and (3) of this subsection, the department shall conduct the administrative disqualification hearing, make a final determination regarding whether the assistance unit member committed intentional recipient error and issue the notice of decision required pursuant to subsection (j) of this section not later than ninety days after the notice required under subsection (h) of this section is sent to the assistance unit. (2) The assistance unit member or such member's representative may, not later than ten days prior to the date scheduled by the department for the administrative disqualification hearing, request and receive a postponement of such hearing not to exceed thirty days. The department shall grant not more than one postponement. Whenever such a postponement is granted, the deadline for completing the administrative disqualification hearing process set forth in subdivision (1) of this subsection shall be extended by a period equivalent to the duration of the postponement. (3) If an assistance unit member fails to appear at a scheduled administrative disqualification hearing, such member may, not later than ten days after the date such hearing was scheduled to take place, request a new hearing. Such request shall be accompanied by an explanation of the reasons such member did not attend the scheduled hearing and any evidence such member wishes to submit in support of such request. Such request shall be reviewed by the hearing official assigned to conduct the administrative disqualification hearing and shall be granted only for good cause. For purposes of this subsection, good cause shall exist whenever the hearing official determines that the assistance unit member failed to appear at the administrative disqualification hearing due to: (A) An illness that afflicted such member or a person in his or her immediate family; (B) such member's incarceration; (C) the death of a person in such member's immediate family; (D) a catastrophic fire, flood or other natural or man-made disaster; (E) the unavoidable loss of such member's planned transportation, provided no alternative transportation was immediately available; and (F) any other circumstances beyond such member's control that the hearing official determines justified such member's failure to appear at such hearing. If a request for a new administrative disqualification hearing is timely submitted and the hearing official determines that there was good cause for the assistance unit member's failure to appear at the originally scheduled hearing, any final determination that such member committed intentional recipient error shall be rendered null and void and a new administrative disqualification hearing shall be scheduled. The department may assign the same hearing official to conduct the new administrative disqualification hearing or may assign a different hearing official to conduct such hearing. Whenever a new administrative disqualification hearing is scheduled pursuant to this subdivision, the deadline for completing the administrative disqualification hearing process set forth in subdivision (1) of this subsection shall be extended by a period equivalent to the number of days that elapsed between the originally scheduled hearing and the rescheduled hearing. (l) Disqualification due to intentional recipient error. When a final determination of intentional recipient error is rendered by the department or a court, the assistance unit member who is found to have committed such error shall be disqualified from receiving assistance pursuant to SAGA for (1) six months after the first offense, (2) one year after the second offense, and (3) permanently after the third offense, unless such period of disqualification is contrary to a court order. If such member is presently receiving assistance pursuant to SAGA, such period of disqualification shall begin on the date a court issues an order finding intentional recipient error, if applicable, or the date a notice of decision finding intentional recipient error is provided to such member following an administrative disqualification hearing or such member's waiver of his or her right to such a hearing. If such member is not presently receiving assistance pursuant to SAGA, such period of disqualification shall be deferred until such time as such member requests and becomes eligible for such assistance. Any person found by a court of appropriate jurisdiction to have knowingly assisted an assistance unit member in committing intentional recipient error shall be disqualified from receiving assistance pursuant to SAGA for one year from the date of such court order, unless such order provides otherwise. (m) Fair hearing prohibited in cases involving intentional recipient error. Appeal to the Superior Court. (1) Notwithstanding any regulatory provision to the contrary, an assistance unit member disqualified from receiving assistance pursuant to SAGA following a final determination of intentional recipient error shall not be entitled to a fair hearing to dispute the finding of intentional recipient error or the imposition of such disqualification penalty. The sole remedy for such a member who wishes to contest such matters shall be an appeal to the Superior Court. Any such appeal shall be filed not later than forty-five days after the date the hearing official issues the notice of decision in which such final determination was made, and shall be made in accordance with the procedures applicable to appeals to the Superior Court from decisions rendered following a fair hearing. This subsection shall not be construed to prohibit an assistance unit member from requesting a fair hearing to challenge the department's selected recoupment plan or any reduction or discontinuance of benefits based on error other than intentional recipient error. (2) If, following an appeal to the Superior Court, said court issues an order reversing the department's finding that an assistance unit member committed intentional recipient error, such member's eligibility for assistance pursuant to SAGA shall be restored. If, based on the factual findings contained in such order and all other evidence available to the department, such member was otherwise eligible for assistance pursuant to SAGA during the assistance unit's period of disqualification, benefits not paid during such period shall be treated as an underpayment and a corrective payment shall be issued to the appropriate payee for such assistance unit.