A CARS Repayment Agreement is sent to the EU with the Demand Letter for Overissuance (CARS3-IM80). The debtor is given the following options:
- Prepaying with check, money order, or
- all at once,
- part now, the rest in monthly payments, or
- monthly payments.
- Temporary Assistance benefits reduction.
The debtor(s) signs the agreement according to the best repayment method for the EU. If the EU chooses to not agree to make repayment and the EU has an active Temporary Assistance case, benefit reduction is applied. If the repayment agreement is returned with benefit reduction section completed, take no action as the system automatically initiates the benefit reduction. Benefit reduction is also known as recoupment. Temporary Assistance benefits will be reduced based upon 10% of the maximum benefit amount for the household size with zero income.
EXAMPLE: EU consists of Ms. X and her daughter. Maximum grant for a household size of two with zero income is $234. The benefit reduction, or recoupment, is $23.
If the CARS3-IM80 Repayment Agreement is returned with a method of repayment other than recoupment to:
- the county – a person designated by county administration enters the agreement into CARS on the Change Claim Information (OVCC) screen. Enter the method, frequency, date of the agreement and the amount of the agreed payment. Refer to the CARS CODE SHEET for codes. Record a comment on the Note Add (OVNA) screen regarding the date the agreement was received and details of the agreement.
- the Claims and Restitution Unit – the Claims and Restitution staff enters the agreement into CARS on the Change Claim Information (OVCC) screen, and returns the original to the county office. They record a comment on the Note Add (OVNA) screen regarding the date the agreement was received and details of the agreement.
For instructions see CARS User Guide ENTERING REPAYMENT AGREEMENTS AND PROCESSING PAYMENTS IN THE CLAIMS ACCOUNTING AND RESTITUTION SYSTEM (CARS).
The CARS Repayment Agreement is filed in the CLAIMS SECTION of the case record.
If the EU fails to make a repayment in accordance with the CARS Repayment Agreement, CARS generates a billing statement. If any responsible member of the EU is receiving Temporary Assistance benefits, the system may begin automated recoupment of Temporary Assistance benefits.
An individual may request renegotiation of a repayment agreement. If the agency agrees with the request, a new payment is negotiated. The individual signs a new CARS Repayment Agreement and OVCC is updated. If the agency finds the EU’s economic circumstances have not changed enough for the repayment agreement to be changed, the original repayment amount remains. The request for renegotiation and the reason for the decision are recorded on the Note Add (OVNA) screen.
If the EU is receiving Temporary Assistance benefits, the repayment agreement cannot be less than the amount that can be recovered with recoupment. The repayment agreement is not renegotiated when the Temporary Assistance benefit amount changes. Recoupment is 10% of the Temporary Assistance benefit based upon the maximum benefit amount for the household size with zero income.