DHHS Sending Bills to Recoup $2.7 Million it Overpaid in Food Stamps

By Christopher Cousins, Bangor Daily News

AUGUSTA, Maine — More than 3,000 Mainers face bills from the state or federal government because they received too much food stamp funding due to errors by the state.

Some of those Mainers face reductions of up to 10 percent of their food stamp benefits, seizure of their income tax refunds or garnishment of up to 15 percent of their Social Security benefits.

The Department of Health and Human Services said its own errors led to the overpayment of nearly $2 million to 2,257 Mainers in 2015, plus another $700,000 in overpayments to 811 Mainers in the first four months of 2016.

“You are receiving this letter because our records show that you owe us money,” reads a letter DHHS sent to one of the affected people in September 2015. “Our records show that some or all of the money that you owe us was caused by our mistake.”

In that particular case, the individual owed $1,814 but the amount was reduced to $1,088 because of a 2015 class-action lawsuit that resulted in a 40 percent reduction of bills for some individuals.

The situation angered former state Rep. Bernard Ayotte of Caswell, who said he has received complaints about it from former constituents.

“When some of my former constituents informed me of what was happening I was appalled and dismayed at this egregious offense against the poor and elderly,” wrote Ayotte in a letter to the Bangor Daily News. “I find this decision by the DHHS to be mean-spirited and very callous. The person who made this mistake should be called to task and all of the financial charges be dismissed.”

DHHS spokeswoman Samantha Edwards said in response to questions from the Bangor Daily News that the department is required to determine and collect all overpayments. Asked to describe what errors the department committed, she said, “it’s an error that is determined to have been caused by the agency or that cannot be proved was caused by the client either intentionally or unintentionally.”

Maine is by no means alone when it comes to making errors administering food stamp benefits, and such errors are not new. In 2014, according to a federal report, there were nearly 334,000 agency errors across the United States. However, Maine’s errors increased drastically from 2014 to 2015, from 600 to more than 2,200.

Jack Comart, litigation director for Maine Equal Justice Partners, has represented numerous clients facing repayment actions, including in a class-action lawsuit against DHHS in 2015. He said the errors typically are caused by data-entry mistakes or lags in the state adjusting numbers in the formula, such as income and household expense data from recipients. The problem has been more acute over the past couple of years, according to Comart, because of the implementation of a new task-based computer system within DHHS.

“Particularly in the agency error cases, people are upset,” said Comart. “They received these benefits, had no way of knowing they weren’t entitled to them. They’ve used up the benefits and are now being told they have to repay. … Even people who have payment arrangements and are making payments on it, they still get these threatening letters from the state.”

In late 2015, the federal government chastised Maine for having the slowest processing times for food stamp applications in the country. The U.S. Department of Agriculture warned that if the state didn’t take “swift and immediate action” by this year, it risked losing millions of dollars in funding that pays for the Supplemental Nutrition Assistance Program’s administration.

As of October 2015, approximately 200,000 Mainers were receiving food stamps, down from a high of nearly 256,000 in 2012. According to that figure, DHHS’ agency error rate is approximately 1 percent.

In 2014, Maine instituted a work requirement for recipients that cut food stamp rolls by thousands. Later that year, it sparred with the USDA on a photo ID requirement for recipients and in September, it announced that it would restart an asset test.

DHHS Commissioner Mary Mayhew has said implementation of the new processing system will improve Maine’s numbers in the long-term, but Christine Hastedt of Maine Equal Justice Partners said it’s the short term she’s worried about.

“We have gotten more calls than I ever remember about this problem in the department,” said Hastedt.

Agency errors led to the majority of the collection attempts, though collection actions also are being taken against 664 families and individuals who intentionally defrauded the government for the benefits, totaling $1.9 million in 2015 and 2016. Another $1.4 million is being recouped from about 1,500 Mainers who were overpaid because of unintentional mistakes when they applied for their benefits.

Overall, nearly 4,000 Mainers were overpaid more than $4.6 million in 2015 and 1,300 people were overpaid $1.3 million in the first quarter of 2016.

Edwards said people who are overpaid benefits first encounter collection attempts from DHHS’ Fraud, Investigations and Recovery Unit, which seeks cash payment plans or deductions in welfare benefits of up to 10 percent if the benefits are still being received.

“We tend to be flexible on payment plans, accepting almost any offer of repayment terms unless there is a court-ordered repayment structure because of a welfare fraud conviction,” wrote Edwards.

If the debt becomes delinquent — which means no payments are made for 180 days — the account is turned over to the federal Treasury Offset Program, which can garnish any federal payments, including income tax returns, Social Security benefits and wages.

Intentional violators face additional penalties, including disqualification from social service benefits for six months for a first violation, two years for a second violation and forever for a third.

This story appears through a partnership with the Bangor Daily News.