Section 24 - Liens and Recoveries

24.1.1 Discharge of Old Liens

Form

Acknowledgement of Overpayment (PDF 78 KB)

The Central Lien Registry will negotiate a discharge of the lien according to the best information available in old regional case files. The policy in effect at the time of lien registration and assistance payout should govern the recovery calculations. For information on discharging old liens, contact the Program Specialist.

Income Assistance Liens - Policies Prior to 1977

The earliest income assistance liens were registered according to excess shelter policies where the following maximum monthly payments were allowable for shelter costs, and excesses were subject to lien recovery:

Prior to April 1, 1960	$45.00 per month per family
April 1, 1960 to October 31, 1969	$25.00 per month per single $40.00 per month per couple $55.00 per month per family with one child or more
November 1, 1969 to February 18, 1970	$45 per month per single $60 per month per couple $75 per month per family with one child or more
February 18, 1970 to November 1, 1977	Liens were registered for: a) the principal portion of mortgage b) tax arrears c) major repairs (repair assistance in excess of $125.00 per year)

From June 19, 1975, liens could be filed under section 20(2) of The Manitoba Assistance Act against a person, who is not an income assistance participant, who is liable under other legislation for the support of an income assistance participant.

This section of the Act is not applicable to sponsors who fail to provide support to sponsored immigrants. See sections 13.3.1 to 13.3.3 regarding recovery of assistance in the case of sponsored immigrants.

24.1.2 Current Causes for Lien Registration

Policy

Property Taxes (PDF 92 KB)

Principal Portion - Mortgage Payments

Under Schedule B, section 2 of the Regulation, that portion of mortgage payments which constitutes payment on the principal is subject to refund by lien.

Major Repairs

Any sum in excess of $200 per fiscal year allowed for repairs to a home owned by an income assistance participant is subject to refund by lien. See Schedule B, section 2 and section 1(1) of the Regulation for authority and legislated definition of "major repairs".

Tax Arrears

Where it is essential that tax arrears be paid, the total amount allowed shall be secured for recovery by lien in accordance with Schedule B, section 2 of the Regulation.

Overpayments

Under sections 20(1) and 21(1) of the Act, authority exists for securing, by lien, any monies overpaid to an income assistance participant.

24.1.3 Mortgage Payments

Assistance for mortgage payments provided in accordance with guideline amounts may be lien refundable if the assistance covers part or all of the principal portion of the mortgage payment or tax arrears. To determine whether a lien should be registered, the order of the mortgage payment is: interest, taxes and principal.

Maintenance Liability

Under section 21(2) of the Act, a lien may be registered against real property owned by persons who are not income assistance participants but who have neglected or failed to comply with any law or court order to provide maintenance to an income assistance participant. Maintenance obligations may arise by statute (e.g., The Family Maintenance Act or court order. However, section 21(2) of the Act does not apply to sponsors who fail to provide support to sponsored immigrants.

See sections 13.3.1 to 13.3.3 regarding recovery of assistance in the case of sponsored immigrants.

Rural and Native Housing

Where an income assistance participant is purchasing low cost housing provided through the Federal - Provincial Rural and Native Housing Program (see section 19.1.23 for the program description), the following lien policies apply:

monthly payments do not include principal portions on the mortgage, hence are not subject to lien refund; and,
major repairs, tax arrears and overpayments are subject to lien registration.

24.1.4 Procedures

Functions of Central Lien Registry

Central Lien Registry handles current liens filed under The Manitoba Assistance Act. All correspondence should be directed to Central Lien Registry for reply when the discharge, postponement or other matters of the lien is at issue. On request, EIA office staff must furnish background information from income assistance files for calculation of refundable amounts.

Written Notice to Participant

In each case where an income assistance lien is registered, the participant must be promptly advised by written notice. An explanation for the registration must be given and, where applicable, information on the approximate rate of accrual should be noted.

Lien Postponements

Lien postponements should be granted to permit renewal of first mortgages. Resulting legal fees may be added to the new mortgage.

Postponements are not to be granted for the purpose of increasing a first mortgage to consolidate debts or other items.

File Closure (Calculation of Lien) and Discharge of Lien

Prior to file closure, each lien amount shall be calculated by the assigned worker and verified by the EIA director or designate. The verification shall include a calculation of the amounts involved with a signature on file indicating that the verification has been completed. The verification should be completed as quickly as possible and forwarded to Central Lien Registry in order to minimize delays in the lien discharge process.
Subsequent to the discharge of liens, Central Lien Registry will ensure that the EIA office is sent a copy of the Discharge form which should be placed in the participant's file.

Lien Summaries at File Closure

At the point of file closure, income assistance liens must be reviewed and all pertinent information summarized in a memo to file. Special care should be taken to ensure that information on any overpayment associated with a file is included in the memo. As well, the overpayment information should be sent to Central Lien Registry.

Occasionally, the overpayment information may need to be returned from the Central Office to the EIA office which is preparing a summary.

Mortgages Paid in Full

Notice must to be provided to the Central Lien Registry when a mortgage is paid in full on an active income assistance file. At this point, the mortgage holder will be requested to provide the statement essential for calculation of the lien.

Minimum Refund at Discharge

Where a financial assistance lien is calculated at $25.00 or less, it may be discharged without refund.

Reductions of Liens at Discharge

Where circumstances justify special consideration, including evidence on file (or the lack of it), recommendations for reduction of a lien at discharge must be approved by the Director of Field Services or designate, with a copy to the Central Lien Registry. Under no circumstances is another office to make a commitment, either verbally or in writing, to other parties regarding a possible reduction.

Routing of Monies Received by EIA offices

In all cases where monies are received by EIA offices on files which have liens registered against them, including liens registered for overpayments, these monies must be forwarded to the Central Lien Registry rather than to Revenue Accounting.

24.1.5 Liens - Public Trustee

The involvement of the Public Trustee in managing an income assistance participant's affairs shall not be cause for lien exemption. Liens should be filed according to standard policies in such cases to secure the Department's right to recovery.

24.1.6 Lien Avoidance - Earnings to Principal

An income assistance participant who purchases a home, may request deletion of the principal portion of the mortgage payment from his or her budgeted needs to avoid registration of a lien. It is only permissible to approve the request if the payment will be made by the participant from earnings exempted under the Work Incentive.

In these cases, current taxes, insurance and interest on the mortgage may be included in the income assistance budget without registration of a lien.

24.1.7 Lien Avoidance - Maintenance Income

Where maintenance payments from a spouse are applied against a mortgage, the property of an income assistance participant is not exempt from a lien.

Maintenance payments, whether in cash or mortgage payments, will be considered as a resource and the amount of principal paid on the mortgage will be considered as lien refundable as per Schedule B, section 2 of the Regulation.

24.2.1 Overpayment - Definition

Any sum improperly paid to an income assistance participant is an "overpayment".

24.2.2 Causes of Overpayments

Policies

Closed O/P Notification Original (PDF 44 KB)

Closed O/P Disagree (PDF 46 KB)

Closed O/P Final Disagree (PDF 44 KB)

O/P Collection Postponement Review (PDF 32 KB

Overpayment on Closed Case (PDF 20 KB)

Overpayment - Collection Review (PDF 27 KB)

Overpayment - Collection Postponed (PDF 31 KB)

Reminder - Overpayment on Closed Case (PDF 30 KB)

Generally, circumstances under which overpayments occur are:

unreported income
unreported change in family unit (entitlement)
unreported duplicate assistance
unreported budgetary change and/or intentional overpayments
system error

24.2.3 Effects of Circumstances Prior to Application

Intake staff are required to record the assets held by applicants at the time of enrolment. This information may affect the decision whether to enrol or the amount of assistance to be granted immediately after application.

Overpayments

There is no legislative authority for granting assistance as an "overpayment" from the date of application because of circumstances predating the application. Availability of funds, rather than their recent disposal, shall determine the applicant's need and the amount of income assistance.

Persons applying for assistance in Manitoba within 30 days of receiving assistance from another jurisdiction

EIA will take into account assistance issued by another jurisdiction in the 30 days before application, whether or not it remains on hand or on deposit. Intake workers may explore with applicants how funds were spent, with discretion to meet immediate need.

Applicants with households with children may be provided with immediate needs, as required.

Where immediate need exists, employable childless applicants will be advised to seek casual employment and shelter at a temporary facility, such as the Salvation Army, if necessary.

24.2.4 Legislative Authority for recovery of Overpayments

Section 20(1) of The Manitoba Assistance Act authorizes full recovery of income assistance improperly paid because of a false statement or misrepresentation by the participant, or because of an error affecting the payout of assistance.

Section 21(1) of the Act authorizes registration of a lien to secure such debts.

Section 20(3) of the Act authorizes deductions from participants' budgets in order to recover debts resulting from:

a false statement or misrepresentation;
an error; or,
maintenance liability.

Also, section 47 of The Financial Administration Act authorizes the reduction of assistance payable to an income assistance participant who has become indebted to the Crown.

24.2.5 Rate of Recovery

It is essential that recovery be made on any active income assistance file where monies have been overpaid. Section 20(3) of The Manitoba Assistance Act requires that amounts deducted from income assistance payments will not cause undue hardship. Accordingly, the recovery rate is based on the size of the household, as follows:

1 person	$60.00
2 person	$85.00
3 or more persons	$110.00

Larger sums may be authorized by the participant. Smaller sums may be authorized by the EIA director or designate, where the participant has demonstrated that hardship will occur if the recovery rate is fully implemented.

24.2.6 Calculation of Overpayment

Policy

Calculation of Overpayments (PDF 144 KB)

Any funds improperly received by a participant as the result of a deliberate attempt to falsify income assistance eligibility shall be calculated as follows:

Offences under the Manitoba Assistance Act: Only the amount of assistance paid between the period beginning with the 31st day following the change of circumstances (such as the receipt of employment income) and the date upon which the person discloses the change in circumstances (whether in an interview or not), can be taken into account in calculating the amount.

For example, if a person first receives employment income on July 1st and that person discloses the receipt of the employment income the following October 1st, the period of time in which income was improperly obtained would be that which was paid from July 31 to September 30th.

These guidelines do not apply to cases in which prosecution is brought under the Criminal Code, because in such cases there is not a 30 day period to report changes in circumstances.
Criminal Code Offences: In a Criminal Code charge, all of the funds paid from the date that the change in circumstances occurred to the date the Department was informed (directly or indirectly) of the change by that person must be included in the calculation of the overpayment.

To accurately complete the overpayment calculation when a participant has earned/unearned income, EIA staff must first give the participant the opportunity to provide documentation on their actual earnings/unearned income during each month the participant was in receipt of EIA benefits. A review of all documentation submitted by participants within a reasonable timeframe is necessary to finalize the amount of the overpayment. Once all calculations are complete, the total overpayment should be assessed on the participant’s file. If the participant has been given reasonable opportunity to gather necessary documentation and the participant is unwilling to provide what is required to assess the overpayment amount, staff shall then consider all benefits paid including additional benefits for special needs, non-insured health expenditures, major/minor repairs AND prescription drug costs in determining the overpayment amount.
When calculating the overpayment, EIA will only recover up to the Pharmacare deductible amount if EIA staff receives information from the participant documenting any income (over and above their income assistance benefits) for all years in question. If this information is not received, EIA will not be able to calculate the Pharmacare deductible amount and will consider all prescription drugs in the overpayment amount.

24.2.7 Common-Law Unions

An overpayment should be calculated in those situations where the participant has not admitted to an offence, but where sufficient evidence exists to warrant an alleged fraud submission to the Central Office. In all such cases, an alleged fraud submission will be made to the Manager of the Investigation Unit for review and possible further action. The overpayment would then be subject to review by the Recovery and Collection Unit and/or the court system. The submission of such cases to the Central Office shall not apply to those EIA offices that are not presently processing alleged frauds through the Central Office. These offices shall continue with their present procedures.

An overpayment should be calculated in those cases where the participant has admitted to a common-law offence and where significant evidence is available to support that admission. In such cases, the overpayment should be calculated in accordance with the participant's admission, unless considerable evidence is available to indicate that the overpayment should be calculated otherwise. The discretion of the director or designate should be used to determine whether an alleged fraud submission is warranted in such cases.

In situations where the participant has not admitted to an offence but the EIA director or designate has strong reason to believe that a common-law situation exists, or has existed, but has insufficient evidence to warrant a submission of alleged fraud to the Central Office, assistance should be terminated and the participant advised of her or his right of appeal. In such situations, no overpayment calculation is warranted.

In situations where the participant has exercised his or her right of appeal and the decision to terminate assistance is upheld by the appeal board, the calculation of the overpayment should include the amount of assistance that was issued pending the appeal, if any.

24.2.8 Lost or Stolen Cash

Policy

Minister's Delegate/Program Specialist Decisions and Consultations (PDF 208 KB)

When a participant claims to have need of assistance resulting from the loss or theft of cash, the following procedures shall apply:

the participant is required to report the loss or theft to local police;
any allowed assets such as savings and usual income exemptions should be drawn on to replace the funds; and,
where emergency need still exists, an intentional overpayment may be authorized under authority of the Minister or the Minister's designate in accordance with section 5(2) of the Regulation.

24.2.9 (deleted)

24.2.10 (deleted)

24.2.11 Offence and Penalty

Where an income assistance participant deliberately withholds or provides false information for the express purpose of receiving assistance to which he or she is not entitled, provision is made in section 22(1) of The Manitoba Assistance Act and in the Criminal Code for charge and penalty.

24.2.12 (deleted)

24.2.13 Reconciliation of Estimated Utility Costs

Policy

Utility/Fuel Payment (PDF 100 KB)

Schedule B, section 1(D) of the Regulation provides authority for the estimated monthly cost of utilities (i.e., water, light, fuel and rental or instalment payments on essential appliances) to be paid based on actual expenditures for the previous 12 months. Where circumstances have changed such that this estimate is no longer valid, the estimated costs for the next 12 months may be used.

Estimated billings should be reconciled to the actual billings during the Annual Review process, or more often if necessary. Overpayments should be recovered in the usual manner and underpayments reimbursed to the participant through a deficit payment. The estimate should be readjusted at this time to reflect actual expenditures.

Every reconciliation should encompass no more than the previous 12 months. Any overpayments which occurred over a year ago and were not detected during a previous Annual Review should not be recovered unless there is sufficient evidence to indicate that the overpayment was not detected previously due to an act of omission (e.g., not submitting utility bills) or commission (e.g., fraud or misrepresentation) on the part of the participant. Similarly, any underpayments, which were not reconciled in a previous Annual Report, should not be reimbursed unless the underpayment was not reconciled previously as a result of staff error.

When utility costs are based on estimated expenditures for the next 12 months, staff should ensure that the participant is actively involved in determining the estimate. Participants should be advised that estimated utility costs will be reconciled to the actual billings as part of the Annual Review process, with overpayments being recovered and underpayments being reimbursed with deficit payments. In order to avoid large overpayments or deficit payments after the Annual Review, participants should be encouraged to monitor their utility billings and to advise staff if the estimate appears to be inaccurate so that the estimate can be adjusted to avoid these situations. Staff may also choose to monitor the estimated utility costs by reconciling actual expenditures and payments for a period of less than 12 months.

24.3.1 Recovery of Overpayments Due to Administrative Error

Overpayments resulting exclusively from administrative error shall not be subject to recovery except in cases where the director or designate is of the opinion that the participant clearly recognized that incorrect payments had been made. (This policy became effective October 1, 1985).

The intention of this policy is to avoid creating a hardship for participants through the recovery of overpayments to which they in no way contributed. It must be considered that these participants received the overpayments in good faith if there are no facts to suggest they were aware that the assistance they were receiving was more than their entitlement.

Overpayments due to administrative error usually involve one of the following situations:

failure of staff to act on information received or known;
error in calculation;
staff oversight (e.g., failure to make an age adjustment or delete a dependant turning 18 from the budget);
staff error in judgement or interpretation of relevant legislation or policies;
inability of the automated payment system to respond to reported changes in participant circumstances.

Guidelines

The decision to recover an overpayment due to an administrative error is at the discretion of the director or the designate. In determining whether recovery is appropriate, the director or designate should consider all the relevant facts of the case. The following guidelines are provided to assist in making these decisions, however, these guidelines do not exhaust all factors that might be considered and are not listed in order of weight and importance.

Participant's contribution to the overpayment
Did the participant contribute in any way to the overpayment (e.g., not advising staff immediately of changes in his or her family or living situation)? Overpayments which are partly the responsibility of the participant should be recovered unless other factors in the case suggest that non-recovery is appropriate.
Amount of the overpayment
Was the overpayment of a sufficient size for the participant to have noticed that an error had been made? A guideline of 10% of the participant's budget may be used to determine if the error was large enough to be noticed.
Time of the overpayment
Did the overpayment occur at the time of enrolment or a budget adjustment (e.g., January rate change, change in the age group of a dependant) or for no apparent reason after the participant's budget had remained the same amount for several months? It can be considered that participants would be less likely to notice that an error had been made when they are in receipt of a new or adjusted budget than after they have been receiving the same budget for several months.
Participant's knowledge of a budget adjustment
Did the participant receive prior notification (either in writing or verbally, with a notation on file) that their assistance would be reduced or terminated effective a certain date? Recovery should be considered in cases where participants are advised that their benefits will be reduced or terminated and then fail to contact the office when the expected change does not occur (e.g., their assistance remains the same, the adjusted budget does not agree with the amount indicated in the notification, the participant continues to receive assistance when it should have been terminated).
Participant's ability to monitor budget
Consideration should also be given to the participant's ability to monitor his or her budget. Participants who are able to monitor the composition and amount of their budgets closely are more likely to notice errors in their assistance payments than those who are not able to do so.
Statements or actions of the participant
Do any statements or actions of the participant indicate that he or she was aware that an overpayment had been made? Overpayments should be recovered in cases where participants admit that they were aware that an overpayment had been made and purposely chose not to notify the EIA office of the error.

Overpayments Discovered Before Date of Issue

All overpayments due to administrative error should be recovered if the error is discovered, the participant has been advised both of the error and the method of recovery, before the date of issue on the cheque. This policy is designed for situations where the automated payment system is not able to respond to a reported change in participant circumstances, or to the discovery of an error, before the cheque is released.

In these situations, staff should attempt to recover the overpayment immediately through one of the following procedures: the participant may choose to return the cheque to the EIA office and receive a manual cheque for the correct amount or the participant may choose to cash the cheque and return the overpayment amount to the EIA office.

Procedures

All overpayments due to administrative error must be documented in the participant's file and reviewed by the director or designate. The decision regarding the recovery of the overpayment should also be on file, signed by the director or designate. If the overpayment is to be recovered, the participant should be advised in writing of the overpayment, the decision regarding recovery and the method of recovery. Participants do not need to be advised of non-recoverable overpayments, but written explanation should be provided regarding any budget changes resulting from overpayment discoveries.

Two overpayment systems have been established - one system for recoverable overpayments and the other system for non-recoverable administrative error overpayments. All non-recoverable administrative error overpayments should be entered directly into the Non-recoverable System.

Specific instructions for recording overpayments are documented in the Procedures Manual.

24.3.2 Splitting Overpayments

In situations where a general assistance family (with or without children) or a couple that is enrolled as persons with disabilities (with or without children) has accumulated an overpayment(s) while enrolled in the EIA program together, and subsequently separates, any remaining overpayment(s) that they accumulated as a couple, must be split between them.

Each adult in the family must receive notification regarding the calculation of the overpayment(s) and splitting of the overpayment(s).

When calculating split overpayments, in situations where overpayments existed prior to the time that the couple was enrolled in the EIA program as a family, previous overpayments need to be paid back chronologically, prior to the couple paying back the overpayment(s) that they may have accumulated together.

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