October 2017

9.4: Overpayments due to excess Assets

Legislative Authority

Sections 19, 20, 21, 22, 28(6) and 32 of the Act
Section 62 of Regulation 134/98.
Section 10 of Regulation 135/98.

Audit Requirements

Documentation is on file to support decisions made.

Overpayments are documented properly to support both the decision and the calculation, and are being recovered.

Systems are updated; maintained and accounting principles are adhered to.

Delivery agent employees and contracted agencies adhere to all legislation, regulations, and directives governing the methods and processes for the collection of debts.

Random file reviews are completed to ensure that all requirements are met.

Application of Policy

Delivery agents must ensure that a recipient receives the financial assistance for which he/she is eligible based on all available information.

If a recipient’s assets exceed the asset limit for the benefit unit prescribed in Regulation, the recipient is ineligible for assistance and an overpayment is calculated for the period during which their assets were in excess of the limit (See Directive 4.2: Asset Limits for more information).

An overpayment due to excess assets must not exceed the difference between the asset limit for the benefit unit and the benefit unit’s total assets.

The decision to recover the overpayment takes into consideration whether the recovery would cause extreme hardship to the recipient (See Directive 9.3: Recovery of Overpayments for more information).

Determining Amount of Overpayment

Assets in Excess at the Time of Application

If assets are not disclosed at the time of application and the recipient’s assets place the applicant above the asset limit, an overpayment is established. In this case, the overpayment calculation would be:

Monthly Assistance Granted x Period of Ineligibility = Overpayment Amount

Example:

A single Ontario Works recipient begins to receive $721 per month in social assistance in January. It is discovered in May that the recipient, at the time of grant (January), had assets in excess of $10,000 (the allowable asset limit). It is determined that it took two months for the recipient to dispose of the excess asset.

721 - Monthly Assistance Granted
x2 - Period of Ineligibility

$1442 - Total Overpayment

Assets in Excess after Application and Not Disclosed

If assets are received after the time of application and are not disclosed, the amount of the overpayment cannot exceed the difference between the maximum value of assets owned by the recipient and the maximum value of the assets permitted. In addition, the amount of the overpayment cannot exceed the amount that has been issued in assistance. Therefore, two calculations must be made in order to establish the correct amount of the recoverable overpayment:

  • calculation (i) is used to determine the difference between the total value of the excess assets owned during the period of ineligibility and the maximum value of the assets permitted; and
  • calculation (ii) is used to determine the total amount of assistance paid during the period of ineligibility.

The amount of the recoverable overpayment is the lower amount of these two calculations.

Example:

A single Ontario Works recipient begins to receive $721 per month in social assistance in January. The maximum value of assets permitted is $10,000. During a review it is noted that the recipient’s balance in their bank account was $9,500 in March, $10,200 in April, and $10,200 in May and then declined back to $9,500 in June.

The amount of the overpayment is based on the following calculations:

Calculation (i)

Benefit Period

Maximum Value of Assets Owned

Maximum Value of Assets Permitted

Difference

March

$9,500

$10,000

($500)

April

$10,200

$10,000

$200

May

$10,200

$10,000

$200

June

$9,500

$10,000

($500)

  $10,200 - Highest value of assets during the period in question:
- $10,000 - Maximum value of assets permitted:
    $200 - Difference:

Calculation (ii)

Total assistance paid during period of ineligibility: $1,442 ($721x 2 months of ineligibility).

Recoverable Overpayment

The recoverable overpayment is $200 as it is the lesser of calculation (i) and (ii).