SR 03-15 Dated 11/03

STATE OF NEW HAMPSHIRE

INTER-DEPARTMENT COMMUNICATION

SIGNATURE DATE:	October 24, 2003
FROM:	OFFICE OF THE DIRECTOR Mary Anne Broshek
AT (OFFICE):	Division of Family Assistance
TO:	DFA Supervisors Managers of Administration Food Stamp Interviewers
SUBJECT:	Adjustments to Electronic Benefit Transfer Accounts for Recipients of Financial Assistance and Food Stamp Benefits; New Form 472, Acknowledgment and Statement of Understanding of EBT Provisional Credit Requirements, and Its Instructions
EFFECTIVE DATE:	November 1, 2003

SUMMARY

This SR releases policy and procedures regarding making adjustments to financial assistance and food stamp Electronic Benefit Transfer (EBT) accounts to correct EBT transaction errors resulting from system malfunctions.

This SR additionally releases new Form 472, Acknowledgment and Statement of Understanding of EBT Provisional Credit Requirements, and its instructions.

POLICY

Adjusting an EBT Transaction Error

An EBT transaction error has occurred when a food stamp or cash assistance recipient uses an EBT card, and, due to a systems error or malfunction:

· the retailer or merchant is not credited with some or all of the transfer of funds; or

· the cash assistance recipient does not receive some or all of the benefits requested, although the recipient’s EBT account is debited for the full amount.

Effective November 1, 2003, when an EBT transaction error or malfunction occurs, the following adjustment procedures will be implemented:

· All EBT account transaction errors will be investigated. At the conclusion of the investigation, the client’s EBT account will be credited or debited with the amount under investigation. This will occur regardless of whether:

- a recipient requests an administrative appeal after the adjustment has been made; or

- a cash assistance recipient requests a provisional credit of the adjustment amount prior to the conclusion of the investigation.

· If it is determined that a merchant has not been credited for the full EBT transaction amount, an adjustment will be made to the recipient’s EBT account by debiting the discrepancy from the assistance group’s account. A portion, or more, of the next month’s benefits, as needed, may be debited from the recipient’s EBT account as well, to complete the adjustment.

· If it is determined that a cash assistance recipient did not receive the full transaction amount that was debited from the individual’s EBT account, an adjustment will be made to the recipient’s EBT account by crediting the discrepancy between the two amounts to the assistance group’s account.

Adjustment Timeframes

Food Stamp EBT accounts will be adjusted within 10 days of the date the error was reported by the client or merchant.

Cash assistance EBT accounts will be adjusted within 45 business days of the date the error was reported.

Notification to the Client of the EBT Error or System Malfunction

Recipients will be notified by letter when the adjustment requires a debit from the household’s account and notification will occur at the time the EBT account adjustment is made; recipients are not provided with an advance notice. If an adjustment requires a credit to be made to the household’s account, EBT staff will contact the recipient to ensure that the EBT account and card are still active.

The client letter indicating the debit adjustment includes the following information:

· the total amount of the adjustment required to reconcile the transaction error;

· the date the transaction occurred;

· the name of the merchant and location where the transaction occurred;

· that the recipient has 90 days to request an appeal;

· that the amount of the adjustment has been placed on hold status and is unavailable for recipient use as of the date of the notification;

· that if the EBT account has insufficient funds to cover the total adjustment, the department will place a hold against the following month’s benefits for the remaining amount of the adjustment; and

· that if the recipient requests an administrative appeal within 10 calendar days from the date of the notice:

- the amount of the adjustment will be credited to the recipient’s EBT account pending the outcome of the administrative appeal, if the client so requests; and

- that if the recipient requests that the amount of the adjustment be credited to their EBT account pending the appeal, the amount is subject to recoupment if the appeals officer does not find in favor of the recipient.

A copy of a client letter indicating a debit adjustment is attached for reference.

Future Month’s Benefits and Debit Adjustments

When making a debit adjustment to a recipient’s EBT account because a merchant has not been credited for the full EBT transaction amount, a recipient’s future month’s benefit may be debited when either:

· no benefits are available in the recipient’s EBT account when the initial adjustment is attempted; or

· only a portion of the benefits required for the full adjustment is available at the time the initial adjustment is attempted.

To reduce hardship on the household, a hold will be placed on whatever portion of the adjustment is available in the current month’s benefits rather than wait to debit the entire adjustment amount from the household’s next month’s issuance. However, if no benefits are available, all of the next month’s benefits will be used towards the needed adjustment amount. If after debiting the current month’s benefits and the next month’s benefits, the full adjustment amount is still not paid in full, the amount that was provided will be considered the full amount, and no further debits will be made from the recipient’s account to reconcile the error.

If partial debit adjustments must be made from the current and next month’s benefits to reconcile the EBT transaction error, the notification to the recipient will additionally indicate:

· when the initial hold was placed on the current month’s remaining available funds, if any; and

· the adjustment amount that will be debited from the next month’s benefits.

Debit Adjustment Credits

Debit adjustment credits are provided only for EBT transaction errors in which a merchant did not receive the full transaction amount.

· If the household requests a debit adjustment credit within 10 days of the date of the debit adjustment notification, the hold on the adjustment amount is released and the funds remain in the recipient’s account, pending the administrative appeal. If the recipient loses the appeal, the adjustment amount is recouped from the recipient’s account and credited to the merchant’s account. If there are insufficient funds in the recipient’s EBT account to cover the full recoupment amount, the recipient’s next month’s benefits will be debited to settle the full adjustment amount.

· If the household does not request a debit adjustment credit within the 10-day timeframe allotted for doing so, the hold on the funds in the recipient’s account is released, and the adjustment amount is credited to the merchant’s account. If there are insufficient funds in the recipient’s EBT account to cover the full adjustment amount, the recipient’s next month’s benefits will be debited to settle the full adjustment amount.

Example: A recipient uses their EBT card to pay for $100 worth of groceries. The recipient receives their groceries, but due to a system’s malfunction, the merchant is only credited $20. A hold is placed on the recipient’s account in the amount of $80, upon the completion of the investigation. The recipient receives the notice describing this adjustment and within 10 days, requests an administrative appeal and debit adjustment credit. Because the recipient has requested the appeal within the 10 days and has asked for a debit adjustment credit, the hold on the $80 is removed and the amount remains in the recipient’s account. At the administrative appeal, the appeal’s officer finds in favor of the merchant. The $80 is now debited from the recipient’s account and credited to the merchant. A portion of the recipient’s next month’s benefits are additionally accessed if the full $80 is no longer available in the recipient’s account.

Provisional Credits

If a financial assistance recipient who uses the EBT system to collect financial assistance benefits misses the 10-day timeframe to request a debit adjustment credit, the recipient may request a provisional credit. A request for a provisional credit may be made for up to 90 days from the date of the notification of the adjustment. To approve a provisional credit, the Family Services Specialist and DFA Administrative Supervisor must determine, after obtaining appropriate verification, that the recipient meets hardship criteria and then complete new Form 472, Acknowledgment and Statement of Understanding of EBT Provisional Credit Requirements.

Hardship exists if all of the following criteria have been met:

· the recipient must have only received 20% or less of the benefit amount requested; and

· the recipient must provide a signed, written statement indicating that the individual or household is experiencing or threatened by at least one of the following:

- homelessness or eviction;

- termination of a utility or dependent care; or

- lack of medicine, food, heat, hot water, or cooking fuel.

Provisional credits are subject to recoupment upon completion of the investigation.

Exception: State Office EBT staff may also approve a provisional credit when the recipient requests an administrative appeal and the appeal’s officer finds in favor of the recipient at the hearing, but:

· the merchant refuses to credit the recipient’s EBT account for the adjustment error; or

· the merchant is no longer an EBT provider.

NOTE: Provisional credits may not exceed the total adjustment amount.

Example 1 [no provisional credit]: A recipient uses their EBT card to withdraw $100 from an ATM machine. Due to a system’s malfunction, the ATM machine disburses $80 while debiting the full $100 from the recipient’s account. The recipient reports the error 11 days later and requests a provisional credit. The recipient is not subject to a provisional credit because although the request was made within timeframes, the receipt of the $80 does not meet the hardship criteria of having received 20% or less of the benefit. The error will be investigated and the account adjusted accordingly at the completion of the investigation.

Example 2 [provisional credit provided]: A recipient uses their EBT card to withdraw $100 from an ATM machine. Due to a system’s malfunction, the ATM machine disburses $20 while debiting the full $100 from the recipient’s account. The recipient reports the error 11 days later and requests a provisional credit, providing a statement that they cannot afford to pay for needed medication. The recipient is eligible for a provisional credit of $80, the adjustment error, because the recipient has requested the credit timely and meets the hardship criteria. The error will be investigated and the account adjusted accordingly upon the conclusion of the investigation. The provisional credit will then be recouped from the recipient.

Example 3 [no provisional credit]: A TANF recipient uses their EBT card to withdraw $100 from an ATM machine. Due to insufficient funds, the ATM machine disburses $20 and debits the account $20. The recipient reports the transaction 11 days later and requests a provisional credit, providing a statement that they cannot afford to pay for their electric bill and their electricity is about to be turned off. The recipient is not eligible for a provisional credit because insufficient funds is not a result of a systems error or malfunction, but an accurate representation of the amount of financial benefits the recipient has available to them. In this scenario, the FSS would review the recipient’s eligibility for aid from the Emergency Assistance Program.

Administrative Appeals Process When Making an EBT Adjustment

The recipient has 90 days from the notification of the debit adjustment to request an administrative appeal.

· If the recipient requests an appeal within 10 days of the notification of the adjustment, and also requests a debit adjustment credit, the amount of the adjustment is removed from hold status and credited to the recipient’s account, pending the administrative appeal process.

· If the recipient does not request an administrative appeal within 10 days, the amount of the adjustment is credited to the merchant.

· If the financial assistance recipient requests a provisional credit after 10 calendar days but within 90 days of the notification of the adjustment, the amount of the adjustment may be credited to the EBT accounts of recipients who indicate hardship.

Debit adjustments and provisional credits are subject to recoupment.

PROCEDURES

At the conclusion of the investigation for each reported EBT transaction error due to a systems malfunction, the individual’s EBT account is credited or debited according to the results of the investigation. State Office EBT staff will generate the letters to recipients when a debit adjustment is necessary, until the process can be automated. An example of a letter sent to a recipient when their EBT account needs to be adjusted is attached for reference.

Debit adjustment credits will be automatically applied to the recipients EBT account for the amount of the transaction error if the recipient request the credit within 10 days from receiving the notification of the adjustment.

Provisional credits require District Office action. The FSS and DFA Administrative Supervisor must determine that the recipient requesting the provisional credit meets the hardship criteria, and then must complete new Form 472, Acknowledgment and Statement of Understanding of EBT Provisional Credit Requirements.

Procedural Flow Chart for EBT Transaction Errors

Scenario	Action
The recipient learns that an EBT transaction is denied. Benefits are not deducted from their NH EBT card. Goods and services are not received.	The recipient must call: EBT Customer Service at 1-888-997-9777.
The recipient’s EBT card is lost, stolen, damaged, or no longer works.	The recipient must call: EBT Customer Service at 1-888-997-9777.
The merchant reports that the recipient received the full amount of goods but the transaction did not complete properly, so the merchant was not credited with some or all of the transferred funds.	If it is determined that the merchant was not credited for the full EBT transaction amount (may take up to 45 days to investigate the claim), a hold is placed on the recipient’s EBT account in the amount of the adjustment, and a notice is sent to the recipient: · If the recipient requests an administrative appeal within 10 days of the notification, the hold is removed and the amount is credited back to the recipient’s account, pending the results of the investigation and appeal. · If the recipient does not request an administrative appeal within 10 days, the merchant is credited with the adjustment amount. If there are not enough funds in the recipient’s EBT account to credit to the merchant, a hold will be placed on the next month’s benefits, up to the full adjustment amount.
The recipient reports that although their financial assistance EBT account was debited for the full EBT transaction, the recipient received none or only a partial amount of the benefit.	· The recipient must call: EBT Customer Service at 1-888-997-9777. · If the recipient requests an administrative appeal within 10 days of the notification, the amount is credited to the recipient’s account. · After 10 days, the recipient may be eligible for a provisional credit, subject to DFA Administrative Supervisor approval, in the amount of the adjustment. The recipient must meet hardship criteria. Provisional credits are subject to recoupment once the investigation is complete.

Procedural Flow Chart for Provisional Credit Requests

Scenario	Action
The cash recipient has learned that a transaction has been denied and benefits have been deducted from their EBT account but services/goods have not been received.	To start the investigation process, the recipient must call: EBT Customer Service at 1-888-997-9777.
Upon the report of the EBT transaction error, EBT Customer Service initiates research to determine where, and if, an error occurred. If it is determined that the recipient’s claim is true, an adjustment will be issued by the merchant/bank, providing credit to the recipient’s account.	Once a claim has been reported, research and processing can take up to, but not exceed, 45 days.
The cash recipient indicates hardship as a result of the EBT transaction error.	EBT Customer Service issues a weekly report containing all reported mis/non-dispenses and the research status of each reported occurrence. The FSS and DFA Administrative Supervisor will: · complete Form 472, Acknowledgment and Statement of Understanding of EBT Provisional Credit Requirements, after determining the recipient meets hardship criteria; · screen print the EBT History record showing the transaction and error that has been reported; · enter Case Comments into New HEIGHTS history detailing the transaction, action taken, and hardship reason; · Call State Office EBT staff to determine if further documentation is needed to complete the provisional credit process; and · file all documents into the paper Case File.

Procedural Flow Chart for Issuing the Provisional Credit

Provisional Credits are only issued for the amount of the reported loss, not the original benefit authorization amount. For example, the benefit authorization amount is $60. The EBT error amount is $50. The provisional credit is $50 not $60.

The DFA Administrative Supervisor will:

· request a provisional credit in New HEIGHTS with the reason code of "EBT mis/non-dispense" after receiving verbal authorization from State Office EBT staff; and

· explain to the recipient that the provisional credit will be available after 6:00 a.m. on the second business day. The recipient can call EBT Customer Service to verify that the payment has been issued.

The DFA Administrative Supervisor and recipient must monitor the EBT account during the 45 days following the issuance of the provisional credit.

Upon Completion of the investigation, the DFA Administrative Supervisor must FAX to the Office of Special Investigations (OSI):

· a screen print of the EBT History Screen showing that EBT Customer Service has completed the research and a credit/adjustment has been issued to the EBT account;

· a copy of the signed Form 472; and

· the requested amount to be cancelled.

After issuing the provisional credit…

then…

…if the 45 days have expired and:

· the claim is denied; or

· the claim was approved and the EBT account has been adjusted for the claim amount, but the recipient has spent the benefit without making repayment to the department for the provisional credit received…

…the DFA Administrative Supervisor must refer the case to the OSI for recoupment.

…if the claim is denied and the recipient disputes the findings…

…the DFA Administrative Supervisor must refer the recipient to the Office of Administrative Appeals.

POLICY MANUAL REVISIONS

Revised Family Assistance Manual Topics

PART 707 ISSUING FINANCIAL ASSISTANCE BENEFITS

Section 709.01 What Benefits May Be Replaced

Revised Adult Assistance Manual Topics

PART 705 ISSUING BENEFITS

PART 707 REPLACING FINANCIAL ASSISTANCE BENEFITS

Revised Food Stamp Manual Topics

PART 707 ISSUING BENEFITS

Section 709.01 What Benefits May Be Replaced

Section 709.02 Deactivation and Return of EBT Benefits from Unused EBT Accounts

Section 709.04 Cash-out of EBT Food Stamp Benefits

NEW FORM

New Form 472, Acknowledgment and Statement of Understanding of EBT Provisional Credit Requirements, must be completed for all financial assistance recipients requesting provisional credits due to an EBT transaction error. A copy of the new form is attached for reference.

IMPLEMENTATION

The policy released in this SR is effective November 1, 2003.

CLIENT NOTIFICATION

No special client notification is planned.

TRAINING

No special training is planned.

FORMS POSTING INSTRUCTIONS

Remove and Destroy

Insert

Forms Manual

None

Form 472, Acknowledgment and Statement of Understanding of EBT Provisional Credit Requirements, SR 03-15/November, 2003

1 sheet

DISPOSITION

This SR may be destroyed or deleted after its contents have been noted and the revised manual topics released by this SR have been posted to the On-line manuals.

DISTRIBUTION

This SR will be distributed according to the electronic distribution list for Division of Family Assistance policy releases. This SR, and revised On-Line Manuals, will be available for agency staff in the On-Line Manual Library, and for public access on the Internet at http://www.dhhs.state.nh.us/DHHS/DFA/LIBRARY, effective December 8, 2003.

This SR, and printed pages with posting instructions, will be distributed under separate cover to all hard copy holders of the Family Assistance, Adult Assistance, Food Stamp and Forms Manuals.

DFA/JBV:s