Do you have to pay back food stamps?! Many people have avoided applying for this valuable program because they are afraid that the benefits will eventually have to be repaid… but there are only three circumstances in which you would need to repay these benefits.
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As long as you receive food stamps benefits accurately and legally, you do not have to pay them back. It is very important that you use accurate, up-to-date information on your application and keep your information updated with the food stamps office as you receive these benefits. This will ensure that you never receive an overpayment.
You do have to pay back food stamps if you get overpayments.
Overpayments can happen for several reasons – and it may not even be your fault. There are basically three ways that overpayments happen:
First, the agency may make a mistake. The government agencies that oversee food stamps are run by people and people sometimes make mistakes. Sometimes, these mistakes may mean that you receive more food stamps than you were really eligible for. Even though it may not be your fault, you may have to pay back food stamps if you receive extra funds due to an agency error.
Second, overpayments may also happen if you intentionally give fraudulent information to the food stamps office. Intentionally misleading the government agency in charge of food stamps constitutes fraud and is illegal.
If you have committed fraud, you may face additional penalties that vary by state. In addition to paying back benefits, you may have to pay fines and even spend time in jail. You may also be disqualified from receiving food stamps in the future.
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In California, for example, the penalties are defined by how much aid you received. If you received $950 or less, the penalties include fines of $500 and up to six months in jail, whereas receiving more than $950 results in a fine of up to $5,000 and up to three years in jail.
Third and perhaps most common, overpayments may happen due to accidental household errors. This may happen when you accidentally provide incorrect information on your application or forget to update your information with the food stamps office in a timely manner. Remember, you are obligated under the rules of the program to report fluctuations in your income and expenses within a certain period of time.
What happens if you have to pay back food stamps?
There are several ways that the food stamps office will recover the overpayment.
If you are still receiving benefits when you have to pay back food stamps, the amount you receive will usually be reduced by either $10 or 10% per month (whichever is greater). For example, if you receive $200 per month, then your monthly repayment would be $20 and you would receive only $180 per month until your debt was repaid.
If you are no longer receiving food stamps, it may be more complicated. The agency will most likely try to get you to agree to a repayment plan. If you do not agree to a plan, they may be able to recover your funds in other ways, such as:
- Garnishing your wages
- Garnishing your other benefits, such as unemployment compensation
- Garnishing your tax returns
Garnishing means that the money will be withheld before you ever receive it. Garnishment is a legal process in which a third party, such as an employer, deducts payments for the person you owe.
If you have been informed of an overpayment, here’s what you need to do.
The office will inform you, usually with a letter, if they think that you have been overpaid. If this happens, it is important that you follow the instructions on that letter.
You can file an appeal.
If you disagree with their determination, then you will need to call the office and speak to someone directly. You have the right to appeal their decision, but you will need to file that appeal within a specific time frame. Usually, that’s 60-90 days. During the appeal, you will receive additional information about the overpayment and you will be able to present your side of the story to a “hearing officer” that has not previously been involved in your case.
You may be able to negotiate the debt.
According to Pine Tree Legal Assistance in Maine, you may be able to negotiate the amount of debt you owe if you do not still receive food stamps.
PTLA recommends completing a Food Supplement Budget to figure out what your “net Food Supplement income” would be if you were still receiving food stamps. If 10% of your net FSI would not be enough to repay the overpayment in three years, you may be able to compromise with the food stamps office on a lower settlement amount.
In order to do this, you will need to use a food supplement estimator for your specific state. You also need to remember that this is a possible solution and not a guarantee… but it may help if you are facing an overwhelming food stamps debt.