A Food Stamp claim may be reduced in full or in part if the claimant is unable to repay the full claim within a three year period.

Requesting a Compromise

A Food Stamp claimant may request a compromise at any time after a claim is established, but only one compromise will be granted per claim. Once the Agency grants a compromise, future requests for compromise will be denied. The request must be directed to the IMA office or personnel listed in the customer’s Demand Letter.

What Claims May Be Compromised

A Food Stamp claim may be reduced through compromise when:

• The claim is not the result of court-determined fraud nor a finding by the Office of Administrative Hearings that the customer committed an intentional program violation (IPV);
• The claim cannot be repaid within three (3) years; and
• The claimant’s gross income at the time of the request to compromise the claim does not exceed 200% of the Federal Poverty Level in effect during the month of the request for the household size as it is during the month of request.
  • All types of income that would be counted for Food Stamps will be counted, and
  • All countable income from any adult in the household during the month of request who was also an adult in the Food Stamp household at the time of the overpayment will be counted.

Determining if the Claim Can Be Repaid Within Three (3) Years

When Food Stamps are over-issued to a customer, FNS allows a state Food Stamp agency to collect 10 percent of the customer’s monthly Food Stamp benefits through recoupment.  This amount will never exceed 10 percent of the maximum allotment.  When determining the amount of a claim that can be repaid within 3 years, IMA must ensure that the Food Stamp recipient is not expected to repay more than the maximum amount that could be collected through recoupment of active benefits.

Amount of the Claim Reduced by Compromise

If the claimant meets the requirements of “What Claims May Be Compromised” above, the claim may be reduced to the amount that the claimant may be expected to repay within three (3) years.  A hardship reduction may also be given when the claimant’s shelter cost, as determined by FS rules, exceeds one half of the claimant’s gross income at the time of the request for compromise.  If the claimant’s shelter cost is more than one half of the claimant’s monthly gross income, reduce the claim by the difference of the claimant’s shelter cost and one-half of the claimant’s gross income.

If a reduction due to compromise results in a balance of less than $0.00, no previous payments by the claimant will be restored to the claimant.

Example 1

Ms. Parker has been charged a $3000 Food Stamp overissuance.  After applying the rules in “ Determining if the Claim Can Be Repaid Within Three (3) Years” above, she is expected to repay $1500 within three years.  Ms. Parker’s monthly income is $900 in Social Security.  Her shelter cost consisting of her rent of $650 and a Heating and Cooling Standard Utility Allowance of $300 totals $950.  As seen in the calculation that follows, Ms. Parker’s Food Stamp claim may be reduced by an additional $500 because of her high shelter costs.               Total Shelter Costs                                             $950         -  ½ of Gross Income  ($900/2 = $450)                     $450             Additional Reduction                                          $500   After the added hardship reduction, Ms. Parker’s Food Stamp claim may be reduced to $1,000 ($1,500 - $500 = $1,000) through compromise

Restoring Compromised Benefits to a Food Stamp Claim

The Food Stamp claimant must comply with his/her repayment agreement.  If the claimant fails to make a required repayment for three consecutive months, the compromise will be voided, and the claimant must repay the full amount of the over-issuance.  In addition, any portion of a claim that was compromised, must be restored to the full amount of the overissuance when there is a subsequent finding by the Office of Administrative Hearings or DC Superior Court that the claim is the result of fraud or an intentional program violation.

Restrictions on the Number of Compromises

Only one compromise may be made on any individual Food Stamp claim.  The amount of benefits that were compromised may not be recalculated even if the claimant’s income, expenses, or group size changes.

Notification That a Compromise May Be Requested

Food Stamp claimants will be sent notification when a food stamp claim is established telling them that they may ask to have the overissuance reduced through compromise.

Restrictions on Consolidating Multiple Claims When Determining If a Compromise May Be Made

Separate Food Stamp claims cannot be consolidated to determine if all or a portion of the claimant’s combined debt may be compromised.   A separate claim is defined as an overissuance for one month or two or more consecutive months that is the result of the same action or inaction of the claimant or the agency.

Example 1

Mr. Pondexter failed to report his wages from UPS timely.  He was charged a Food Stamp overissuance for May 2008 through October 2008.  Mr. Pondexter’s job terminated and he failed to report when he began getting unemployment benefits. He was charged an overissuance for December 2008 through April 2009.   Mr. Pondexter’s overissuance cannot be combined because the months of the overissuance are not consecutive and the overissuances are based on two separate incidences of Mr. Pondexter’s failing to report changes of his income.