10.3.1 W-2 Overpayments

W-2 overpayments may occur as a result of an error by either the participant or the W-2 agency. There are three types of overpayments:

1. Administrative Error: The W-2 agency commits an error that results in incorrect payments. This type of error is also known as non-client error.

2. Inadvertent Household Error: The W-2 participant reports incorrect information or fails to report information due to a misunderstanding or unintended error. This type of error is known as client error (CE).

3. IPV: The W-2 participant willfully reports incorrect information or fails to report information and, as a result, is found guilty of IPV by the W-2 agency. (See 13.4.1)

W-2 agencies should seek recovery and establish liability for overpayments only from adult members of the W-2 Group. The adult member must have been an adult member of the W-2 group at the time the overpayment occurred.

Overpaid W-2 payments from paid W-2 employment positions and child care may be recouped from either a CSJ or W-2 T payment.

If a W-2 agency issues a W-2 payment in error, the agency must create an overpayment claim. If the agency receives a returned check, the check must be posted as a repayment to the claim.

W-2 overpayments can occur throughout the time a participant is in W-2. To maintain accurate and consistent calculations of overpayment amounts, W-2 agency workers are required to use the W-2 Payment Calculator and Overpayment Worksheet to calculate a participant’s overpayment.

When a participant moves between a W-2 T and a CSJ placement during a participation period, the payment is not prorated. Instead, the participant receives the payment for the placement they were in at the end of the participation period. (see 10.2.5.1).

When calculating an overpayment in this situation, W-2 agency workers must use the full payment amount of the last placement the participant was in.

EXAMPLE : Laura is in a CSJ placement for the 1/16-2/15 participation period. She discloses additional barriers to her FEP on 2/14, and this discussion leads to a new placement of W-2 T. The FEP does not update the placement in CWW until 2/28, after pulldown, so Laura is issued a full CSJ payment of $653, instead of $608 for the W-2 T placement she should have been in at end of the participation period. Laura will have an overpayment in the amount of $45 ($653-608) because payments are not prorated when changing between a CSJ and W-2 T.

All parents in the W-2 group are required by law to assign all child support payments to the State while they are participating in the W-2 program and placed in a CSJ or W-2 T placement, or a CMC placement in certain situations. W-2 participants in these placements have 25% of their Child Support retained by the State. (See 15.1).

Participants who incur overpayments related to eligibility such as unreported income and assets should not have had any of their Child Support retained during the time period they were ineligible for W-2. When determining eligibility-related overpayments, W-2 agency workers must consider the amount of Child Support retained by the State when determining the final overpayment amount.

Overpayment calculations involving moving from a paid to an unpaid placement such as a CMF also need to consider the retained Child Support because unpaid placements are not subject to child support assignment and retention.

EXAMPLE: Doris is in a CSJ placement. Her worker learns she is no longer eligible and has incurred an overpayment for her last two months of payments. During those two months the State retained $30 a month of her child support payment received due to W-2 participation. Because she was not eligible for the W-2 program during that time, the W-2 agency worker must subtract the $60 total in child support payments that was retained when calculating the overpayment. Doris earned $1,306 in W-2 payments during two months of participation ($653 x 2 months). The W-2 agency worker subtracts the retained child support payments from the overpayment to reach the final total overpayment to collect: $1,306 - $60 = $1,246.