Expected to Work/Barriers to Full Employment Policy & Procedures

Published Date: July 18, 2014
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18 Overpayment, Debt and Recovery

Recovery of Debts

POLICY

Once an overpayment has been determined to be a debt (and recorded in the Recoveries System) collection commences automatically from active files.

The recoverable balance is the amount Community and Social Services is able to recover through monthly deductions.

All client types (ETW/BFE or Learners) can pay outstanding debts directly at an Alberta Works Centre whether their files are active or closed.

Recovery Rate
The recovery rate is the amount deducted from a client’s monthly benefits to repay a debt. The default recovery rates are:

1 adult in household (no employment earnings exemption)

$20.00

2 adults in household (no employment earnings exemption)

$40.00

1 adult in household (employment earnings exemption)

$35.00

2 adults in household (employment earnings exemption)

$65.00

The maximum recovery deduction cannot exceed 10% of the household unit’s Core Benefits.

Varying the Recovery Rate
The rationale for decreasing or increasing the recovery rate must be entered in Mobius Notes and Recoveries System Internal Comments.

The recovery rate may be decreased to $10.00 in situations where at least one of the following conditions exists:

  • The recovery deduction is creating an undue hardship for the client, or
  • At Intake when benefits are being prorated.

When negotiating a lower rate, consider the following:

  • Is the client experiencing financial hardship?
  • Is the client receiving all of the benefits for which their dependent children are eligible?
  • Is the client reasonable able to modify living expenses now or in the future to no longer be in financial hardship and repay a high debt amount?

Recovery rates are not reduced below $10.00 except in exceptional circumstances. The lowest recovery rate that a debt can be reduced to is $1.00.

The recovery rate may be increased to a maximum of 10% of the household unit’s Core benefits, in consultation with the Supervisor, if at least one of the following conditions exist:

  • The worker and client have negotiated a higher recovery rate, or
  • The client has previously been found guilty of fraudulently obtaining benefits, or
  • The client has misrepresented their circumstances on more than one occasion.

    Note
    The first time a debt occurs because a client misrepresented their circumstances; the worker advises the client that further misrepresentation may result in a higher recovery rate. This notification should be entered in
    Mobius Notes and Recoveries System Internal Comments.

A file cannot close as a result of a recovery deduction. LISA has a default program to ensure a recovery deduction does not reduce a client’s budget to less than $1.00.

R Flags
The R Flag on the LISA system indicates the recovery status of a debt on an active file.

The R Flag and the Recoverable Balance download from the Recoveries System to LISA the day after:

  • A debt is entered, or
  • The file downloads from CCD to LISA.

There are five different options for R Flags on LISA:

  1. Blank R Flag
    When a client has never had a debt with Community and Social Services.

     

  2. R Flag 0
    When no monthly deductions are being taken off a client’s benefits to repay their debt. When there was a recoverable balance and the client has repaid their debt.

     

  3. R Flag 1
    When the defaulted monthly payments are being taken off a client’s benefits towards their debt, when:
  • A debt is entered and the recoverable balance is no longer 0, or
  • The file downloads from CCD for a reopen.
  1. R Flag 2
    When the recovery amount has been varied (increased or decreased) from the defaulted automatic recovery amount.

     

  2. R Flag 3
    When recovery action is suspended due to Income and Employment Supports Appeal Panel’s direction. This will stop the recovery deduction from the next benefit period.

PROCEDURES

Active Files
When one of the above conditions is met for varying a recovery rate, the worker will:

  1. Negotiate a reasonable monthly recovery rate with the client.
  2. Enter the following in the Recoveries System Internal Comments and Mobius Notes:
  • The reason for varying the recovery rate in accordance with policy,
    and
  • The expected duration of the varied recovery rate.
  1. Change the R Flag in LISA to 2 and enter the new amount of the recovery deduction.
  2. Enter a 6-month Task in Mobius to ensure the client’s circumstances continue to warrant an increased or decreased recovery rate.
  3. Advises the client of the decision to vary their recovery rate and send the client a letter which includes:
  • The reason for the increase or decrease in their recovery rate, and
  • The amount of the new recovery deduction, and
  • Their right to appeal the amount of their new recovery deduction.
Other Third Party Debtors
The worker at the Alberta Works Centre will be the initial contact to evaluate an overpayment by a third part debtor (e.g. landlords, trustees). The client, audit, or investigation staff may advise the worker of the potential third party overpayment.
  1. When a worker is advised of a third party overpayment they confirm the accuracy of the information and determine the amount of the overpayment.
     
  2. As the overpayment can only be entered into the Non-IS Debt Group portfolio by Service Alberta, the worker must notify the third party in writing of:
  • The amount of the overpayment,
  • The reason for the overpayment, and
  • The right to appeal.
     
Note
The worker’s name and phone number are included in the letter in case the third party debtor requires more information or wishes to appeal.
 
  1. Once the appeal period has elapsed or the appeal has been concluded by the Income and Employment Supports Appeal Panel, the worker must notify the third party debtor that full (or partial) payment can be made at any Alberta Works Centre or by mailing payment directly to:

    Service Alberta
    Collections Unit
    PO Box 11417
    Edmonton AB T5J 3E4

    Note
    The Alberta Works Centre receiving the payment is responsible to issue a receipt to the third party debtor.
  2. The worker sends the information requested on the EMP 3898 Service Alberta Third Party Debt Information form to Service Alberta at SCS.Collection@gov.ab.ca.
     
  3. Service Alberta enters the overpayment as a Non-IS Debt Group in the Recoveries System.
     
  4. All collection activities will be pursued in the same manner as debts on closed files.

Debt Payments at an Alberta Works Centre
If a person chooses to pay their ETW/BFE or Learner debt at an Alberta Works Centre, the person who receives the payment at the front desk will:

  1. Ask the person if they are making payment towards an ETW/BFE or Learner debt.
  2. Accept the payment.
  3. Issue the person a receipt.
  4. Follow the Finance cash handling procedure.

When Amounts Were Not Known (i.e., not entered) in Recoveries System and Payment is Received (i.e., insurance claims, WCB)

When a payment is received for any of the following reasons:

    • A lump sum payment is made (i.e., an insurance claim, WCB).
    • Benefits are returned from a client or third party.

The worker:

  1. Determines if any duplicate payment has occurred or what benefits were not needed, for what POA(s) and the amount(s) for each POA.
  2. Determines if the payment or a portion of the payment is for the prior fiscal year or the current fiscal year.
Note
Payments pertaining to a prior fiscal year are applied against Prior Year Revenue.  Any payments or portion of a payment pertaining to the current fiscal year is applied against the Regions budget (return of benefits) which will be used to offset Regional expenditures for the current year.

Payment for prior fiscal year

    • The worker will enter the entire debt in the Recoveries System.
    • Staff will enter the payment on the cash blotter and appropriate payment code which will be applied against the debt in the Recoveries System.

Payment or the portion of the payment pertaining to the current fiscal year

    • The worker will not make an entry in the Recoveries System.
    • Staff will enter the payment or the portion of the payment pertaining to the current fiscal year and appropriate payment code for the current fiscal year on the cash blotter as a current year expenditure.

Example

A client receives an insurance settlement of $3,000 in which $2,000 s related to benefits received in fiscal year 2010/11 (prior fiscal year) and $1,000 is for benefits related to fiscal year 2011/12 (current fiscal year starting April 1).

$2,000 is set up by the worker in the Recoveries System.  The cash blotter will show 1 entry for $2,000 which is to be applied to the debt in the Recoveries System and $1,000 which is to be applied against the current year expenditure code.

Note
Any related documents will be forwarded to the current worker, if the file is still active, or the last worker, if the file is closed.
Workers may need to enter a debt on a file they do not have access to.  The assigned worker on CCD can grant access to any person who has Recoveries System access.