July 29, 2016

Feds to HSD: Stop collections on food stamp overpayments

Photo Credit: Paul Sableman cc

A federal agency said the state Human Services Department should stop attempting to recoup money from food aid beneficiaries who the state may have given more money than they were supposed to.

Last week, an administrator for the U.S. Department of Agriculture Food and Nutrition Services requested, in a letter, that the state department “immediately cease” collecting overpayments from New Mexicans who received extra benefits through the federal Supplemental Nutrition Assistance Program, formerly known as food stamps.

The letter, written by USDA FNS Southwest Administrator William Ludwig to HSD Secretary Brent Earnest, comes two months after the same federal agency threatened to pull money from the department after finding eight violations of federal law in its processing of food aid and Medicaid.

Ludwig alludes to those eight violations—which included keeping pending SNAP applications open for more than the allotted 60 days, approving benefits without interviewing or determining a person’s SNAP eligibility and failing to keep accurate records of clients—in his latest letter to Earnest.

Ludwig also wrote his agency reviewed some of the state’s processed SNAP cases and found that HSD wouldn’t have sought overpayments from beneficiaries if it had followed proper procedures.

“In many of the claims FNS reviewed, it is clear that a claim would not have been established had HSD been in compliance with Federal program requirements,” Ludwig wrote. “To that end, FNS is requesting HSD immediately cease establishing and/or pursuing claims against households affected by HSD’s practices that are in violation of Federal program requirements until further notice.”

It’s not clear how HSD responded to the USDA request. A spokesman for the department did not return an email and voicemail seeking comment for this story.

Previously, Earnest blamed his department’s failure to follow the federal law regarding processing of SNAP benefits on a court ruling from an ongoing lawsuit that barred HSD from using procedural reasons to close SNAP applications.

That ruling came in 2014 as part of the Hatten-Gonzales lawsuit, a case dating back to 1988 that accused HSD of mishandling food stamp and Medicaid applications.

A federal magistrate judge recently recommended HSD be held in contempt of court for violating the 1990 consent decree that came as a result of the Hatten-Gonzales lawsuit. The judge also recommended an independent “special master” oversee the department’s benefits processing for the next year and a half to bring it into compliance with federal law.

Sovereign Hager, an attorney with the New Mexico Center on Law and Poverty, which represents plaintiffs in the Hatten-Gonzales lawsuit, said that shortly after the 2014 court ruling, many of the SNAP overpayments came after HSD started giving SNAP benefits to applicants for three-month periods instead of properly processing applications.

In some cases, people receiving SNAP benefits would re-apply to the program after the three months of aid expired, only to be found ineligible. HSD would then seek to collect the previously processed aid from them.

According to Hager, HSD did not correctly determine all these SNAP applicants ineligible.

“I have clients who have gotten lump sum back-payments in disability benefits, which should never count against you,” she said.

In his letter, Ludwig wrote his agency “will make a determination on how to proceed in regards to the overissued benefits” once it “has a complete and accurate dataset representing all the overissued benefits erroneously provided by HSD.”

“FNS is still investigating the scope of the violations,” he wrote.

The investigation Ludwig referred to is separate from another USDA investigation looking into allegations that HSD falsified emergency SNAP applications to delay or deny expedited aid. Federal law says emergency aid must be processed within seven days of an application.

That investigation, which is looking at whether HSD sanctioned its employees to add fake assets to these cases to clear its backlog of late emergency SNAP applications, is being handled by the federal agency’s Office of Inspector General.

Read the full USDA letter below:

FNS Letter to HSD Regarding Establishing Claims by New Mexico Political Report on Scribd