The Financial Administration Act provides authority for the collection of revenue payable to the Crown on closed files and for remission, compromise and write-off of government debt.

The Limitations Act proclaimed March 1, 1999, limits the time period within which government can pursue a claim (debt) in court to two years after discovering an overpayment or from the last collection payment. This does not prevent the government from pursuing collection activity on a debt with no court order; however, it does provide a debtor with an absolute defense if he pleads the Limitations Act in his Statement of Defense. The two-year limitation period recommences each time a debtor makes a payment. An active file recovery deduction constitutes a payment under the Limitations Act.

INTENT

To ensure:

• Clients understand the collection process for recovering outstanding Community and Social Services debts for both active and closed files, as most clients want to repay their debt and likely will do so if given fair and reasonable payment options.
• Clients are held accountable for their Community and Social Services debts to the greatest extent possible, without creating undue hardship.
• Consequences for debtors who are able but unwilling to repay their Community and Social Services debt are reasonable and well communicated.

POLICY

Community and Social Services delivery staff must inform clients about the existence of an overpayment or debt to Community and Social Services and educate them on the collection process for active and closed files.

Clients must be provided with clear information about their assessed overpayment and understand they are responsible to repay any debt to Community and Social Services, even after their file closes.

At Intake, the worker must advise the applicant that:

• The department has the right to recover the amount or value of a benefit they received, if the person:
  • Receives a benefit to which they were not entitled to, or
  • Does not use a benefit they received for its intended purpose;
    And,
• In appropriate circumstances, the director (or delegate) may exempt a person from the requirement to repay an amount or value that has been assessed as an overpayment, unless:
  • The amount owing is already a debt due, owing to the Government of Alberta; or
  • In the opinion of the director, the person received the benefit by fraud or wilful misrepresentations;
    And,
• While the client's file is active, any current or new debt to Community and Social Services will be recovered by monthly deduction from their Income Support benefits,
  And,
• They are required to continue making payments on their outstanding debt, even after their file closes.

When a new overpayment is assessed, the worker must notify the client in writing of:

• The assessed overpayment, the amount they are required to repay and their right to appeal; and
• That the client may provide additional information to the program which may impact the amount or value that they are required to repay.
   

Refer to the Notice of Overpayment policy section for more information.
 

EMP 3912 Debt with the Government of Alberta (ETW/BFE Active and Closed) Letter

When an overpayment is determined to be a debt the worker must notify the client in writing (i.e., via the
EMP 3912 Debt with the Government of Alberta (ETW/BFE Active and Closed) about:

• The specific amount that has now become a debt;
• The total amount of all outstanding debt(s) to Community and Social Services;
• How the debt will be recovered from their monthly benefits (if their file is active) or how they may make payment (if their file is closed);
• The process if the criteria for varying a monthly recovery rate are met (if their file is active);
• The obligation to repay their debt to Community and Social Services after their file closes.

EMP 2827 Statement of Debt

The EMP 2827 Statement of Debt is produced by the Recoveries System and provides the following debt information:

• All debts with Community and Social Services
• All payments made
• Any adjustments made
• The current outstanding balance owing to Community and Social Services.

The EMP 2827 Statement of Debt is produced when an overpayment is determined to be a debt repayable to the department and also may be printed as required by the worker (e.g. appeal hearings, client requests, etc.). It can be given to a client at any time, including at the client’s request.

PROCEDURES

Overpayments
If a worker knows a client’s file is closing they should:

1. Attempt to call the client to discuss the collection process on a closed file.
2. Advise the client:
   • They will receive a letter informing them of their outstanding Community and Social Services debt (including: the total amount of all outstanding debt(s) owed to Community and Social Services, where to send payments or who to contact regarding payment arrangements and consequences of not paying their debt), and
   • To continue making payments they can afford on their debt to avoid being pursued for collection purposes, and
   • They may be referred to a collection agency if they do not make monthly payments or payment arrangements.

Note
If the client’s outstanding balance is $100 or less LISA will not print an EMP 2562 Files Closed with Recovery Outstanding letter.