|
Wisconsin Department of Children and Families Wisconsin Works (W-2) Manual |
13.6.3.3.1 Administrative Hearings for Delinquency Collection Actions
13.6.3.3.2 Collection Action Hearings
13.6.3.5 Recovery of AFDC Overpayments
All overpayments must be repaid in full. There are three methods for repaying an overpayment: Recoupment, Repayment, and Delinquent Collections.
Recoupment is the process of reducing ongoing W-2 payments until the case closes or the overpayment is repaid in full, whichever is sooner.
CSJ or W-2 T participants with an active client or administrative error overpayment will have their W-2 payments reduced by 10% per month.
CSJ or W-2 T participants with an overpayment due to an IPV will have their W-2 payments reduced by the following amounts:
Overpayment Amount |
Recoupment Amount |
Less than $300 |
10% of the monthly payment |
At least $300 but less than $1,000 |
$75 per payment |
At least $1,000 but less than $2,500 |
$100 per payment |
$2,500 or more |
$200 per payment |
Recoupment happens automatically in BRITS by reducing the monthly W-2 payment disbursed by DCF. The W-2 agency does not need to take any action once the overpayment claim is completed in BRITS.
The participant liable for the overpayment does not need to take any action while their case remains open. The participant may choose to make additional voluntary payments towards their overpayment if desired.
Individuals with open overpayment claims who are either no longer open for W-2 or in an unpaid placement must repay their overpayment through a repayment agreement.
will automatically send out repayment agreements for new claims. All liable individuals must sign and return the agreement. If there is more than one liable individual on the case at the same address, each individual will receive their own repayment agreement. Only one agreement must be returned; however, it must include both liable individuals’ signatures.
The repayment agreement will be returned to PACS, which will work with the individual to negotiate a monthly repayment amount for each program overpayment they are liable for. It is recommended that the individual pay a monthly amount that will repay the overpayment in full within 36 months; however, the negotiated monthly repayment amount must be at least $20 per month per liable individual.
Failure to return a signed Repayment Agreement and/or make a payment of the agreed upon amount each month will result in a dunning notice being automatically sent out by BRITS. Dunning notices inform the liable individual that they have missed a payment or have a past due balance.
Every time an individual fails to make their agreed-upon payment each month, they will receive a dunning notice. If the individual receives three total dunning notices over the life of the overpayment, the debt is considered delinquent and sent for collections.
The DCF Public Assistance Collection Section (PACS) serves as the State’s central collection section for the recovery of delinquent public assistance overpayments.
Delinquency collection actions can include the following:
· Liens – Docketed against a debtor’s real and personal property, such as a home, to secure the state’s interest.
· Levies – Issued against all real and personal property including wages or bank accounts.
· State tax Interceptions – Issued against the individual’s state tax refunds or credits owed by the debtor.
All collection actions are initiated and tracked by PACS; however, W-2 agencies may need to assist PACS occasionally by obtaining and providing documentation supporting the collection action.
13.6.3.3.1 Administrative Hearings for Delinquency Collection Actions
Once the individual is notified of the delinquency collection action, they have 21 calendar days to appeal a levy or lien collection action and 30 calendar days to appeal a tax intercept collection action. The Division of Hearings and Appeals (DHA) conducts the administrative hearings for delinquency collection actions.
A delinquency hearing may be limited to the delinquency collection action or questions of prior payment or debtor identity. However, under certain circumstances, the ALJ may decide to review the underlying merits of the overpayment including how the overpayment was calculated and whether the agency provided proper notice to the debtor(s).
W-2 agencies are not involved in the delinquency hearing process. PACS will appear and prepare all exhibits for all lien and levy delinquency hearings. DCF’s Office of Legal Counsel (OLC) will appear and prepare all exhibits for tax intercept hearings.
PACS and OLC will collaborate with the Wisconsin Works (W-2) agency prior to the delinquency hearing to determine if a fact-finding review took place on that claim.
When a W-2 or Job Access Loan (JAL) delinquency hearing results in the need to address the underlying merits of the overpayment, PACS, OLC, and the W-2 agency will do the following:
Scenario |
PACS and OLC will: |
The W-2 agency will: |
No prior Fact Finding decision on record. |
Request that the ALJ schedule a Fact Finding. |
Follow the Fact Finding procedure outlined in 12.2.5. |
A Fact Finding decision is on record, but no Departmental Review occurred. |
Request that the ALJ schedule a Departmental Review. |
Follow the Departmental Review procedure outlined in 12.3. |
A Departmental Review already occurred. |
Take no action. This information should have already been provided at the delinquency hearing. |
Take no action. |
The delinquency hearing will be held in the Petitioner’s current county of residence.
If the case has been transferred to another W-2 agency since the overpayment determination, both the current agency and the previous agency will be notified of requested appeals. The agency where the overpayment originated is the agency that must attend and provide supporting information if the hearing is rescheduled to a Fact Finding or Departmental Review. An agency can request to attend the hearing by phone in a transferred case situation or at any other time that a phone appearance is warranted. The notice of scheduled hearing will list the Administrative Law Judge and their phone number to contact for requested phone appearances.
13.6.3.3.2 Collection Action Hearings
When an individual appeals a collection action through DHA for a W-2 or JAL overpayment, DHA will notify PACS and the W-2 agency that established the claim via email. The W-2 agency does not need to take any action at that time.
For lien or levy appeals, PACS will take the following actions:
· Prepare and provide DHA with all exhibits;
· Appear at the hearing and defend the lien and/or levy collection action;
· Review decisions for policy adherence;
· Comply with the hearing decision by removing/continuing lien and levy collection action; and
· Provide the certification of compliance to DHA, when necessary.
For tax intercept appeals, PACS and the Department of Children and Families (DCF) Office of Legal Counsel (OLC) will take the following actions:
· PACS will communicate with DHA that the action being appealed is a W-2 tax intercept.
· DHA will send hearing notification directly to DCF OLC.
· OLC will prepare and provide DHA with all exhibits.
· OLC will appear at the hearing and defend the tax intercept action.
· PACS will comply with the hearing decision by removing/continuing the tax intercept action.
· PACS will complete and provide a certification of compliance to DHA when necessary.
In BRITS, workers will:
· Enter and process overpayment claims;
· Identify liable individuals;
· Update or confirm mailing addresses;
· Upload a completed overpayment worksheet to the claim; and
· Document actions and other information.
Once the worker initiates the overpayment, BRITS:
· Generates the appropriate notices;
· Tracks the repayment of overpayments;
· Issues dunning notices;
· Closes a claim when the balance is paid; and
· Identifies and tracks refunds.
BRITS sends three dunning or past due notices to the individual before referring delinquent claims for further collection action, as authorized by law, to the CRES.
CRES is monitored and maintained by PACS. PACS uses CRES to initiate delinquent collection actions for the W-2 and JAL programs.
13.6.3.5 Recovery of AFDC Overpayments
As of 2024, all outstanding AFDC overpayments are delinquent and subject to collection actions by PACS. W-2 agencies have no responsibility to ensure repayment of this type of overpayment and should direct any questions they receive to PACS.
History: Release 25-01; Release 24-13; Release 24-11; Release 20-02; Release 21-04; Release 21-01; Release 18-02; Release 13-03; Release 11-03; Release 09-02.