(b)

1. (1) The policy of this state is that recovery of overpayments will be pursued.
2. (2) An effort will be made to recover all reported overpayments.
3. (3) There will be no distinction between willful and nonwillful withholding of information by the participant, i.e., reasonable and practical steps to correct and collect any overpayment that is known to the state will be made regardless of whether the reason for the erroneous payment was caused by the agency or the participant.

(d) Therefore, the following rules will be followed:

1. (1) Recovery may be made from:

   1. (A) Income;
   2. (B) Liquid resources; or
   3. (C) A reduction in the current transitional employment assistance (TEA) or Work Pays assistance payment;
2. (2) The amount to be recouped from the TEA or Work Pays payment will not exceed ten percent (10%) of the family’s full payment level;

3. (3) Recovery will be made from:

   1. (A) The individual who caused the overpayment; or
   2. (B) If the person responsible for the overpayment has left the household, recovery will be made from any other adult individual who was a member of the overpaid assistance unit;
4. (4) Recovery of any reported overpayment will be made regardless of the cost effectiveness;
5. (5) In all situations in which an overpayment has occurred and the participant is currently receiving TEA or Work Pays cash assistance, recoupment of the overpayment will be initiated unless the participant makes full restitution;
6. (6) The amount of an outstanding overpayment will be used to offset an outstanding underpayment if the family has both; and

7. (7) When a former participant with an outstanding overpayment reapplies and is found eligible, recoupment will be reactivated based on the participant’s current level of:

   1. (A) Payment;
   2. (B) Income; and
   3. (C) Liquid resources.