Once a debt has been determined and recorded in the Recoveries System as a permanent debt, collection may commence. The Income Support program can collect a debt through any of the following methods:

• Entering a repayment agreement with the debtor (person who owes a debt);
• Deducting an amount from a future benefit(s);
• Forwarding a debt to a collection service of the Government of Alberta;
• Filing a certificate or restitution order with the Court of Queen’s Bench; or
• Bringing an action in debt (a debt action is a civil claim for a sum of money).

The collection amount is not determined until it is decided that a debt is due or the amount has already been consented to in a repayment agreement. Former clients, non-clients, third parties, or former sponsors debts are collected through a centralized collection service for the Government of Alberta.

Debtors who are active Income Support clients default to a preset Recovery Rate, recovered through monthly benefit deductions, unless they make arrangements to adjust the rate based on their circumstances. Arrangements may include payment in full or a large payment towards a debt in situations such as receiving a retroactive payment from another program.

Recovery Rate
The recovery rate is the amount paid towards a debt each month. For active Income Support clients, the following default recovery rates are deducted from monthly benefits:

Adjusting the Recovery Rate
The maximum recovery rate must not exceed 10% of the household unit’s Core Benefits as outlined in Section 2 of the Recovery Regulation.

The recovery rate may be decreased to $10.00 with the following considerations:

• Is the client experiencing financial hardship?
• Is the client receiving all the benefits for which their dependent children are eligible?
• Is the client reasonably able to modify their living expenses now or in the future to no longer be in financial hardship and repay a higher debt amount?
• If at intake, are the benefits being prorated?

Note

The only circumstance to reduce the recovery rate below $10 is to prevent file closure.

The ongoing recovery rate may be increased to a maximum of 10% of the household unit’s Core benefits, in consultation with the Supervisor, when at least one of the following conditions exist:

• The worker and client have negotiated a higher recovery rate, or
• The client has previously been found guilty of fraudulently obtaining benefits, or
• The client has misrepresented their circumstances on more than one occasion.

Note

If a client has received a retroactive or lumpsum payment from another program, arrangements can be made for full or large repayments of a debt.

Any rationale for decreasing or increasing the recovery rate must be entered in Compass Comments and in the Recoveries System Internal Comments. The client’s circumstances must be reviewed to determine if the adjusted rate should continue beyond 6 months.

The first time a debt occurs because a client misrepresented their circumstances; the worker advises the client that further misrepresentation may result in a higher recovery rate. This notification should be entered in Compass Comments and Recoveries System Internal Comments.

If an agreement on the repayment amount is not reached, the client must be advised of their right to appeal the recovery rate.

Note

A file cannot close as a result of a recovery deduction. LISA has a default program to ensure a recovery deduction does not reduce a client’s budget to less than $1.00.

If the rate of recovery is reduced, the worker enters the reason for the reduction the duration and the recovery deduction amount in comments and ethe R flag, and amount are adjusted in the Recoveries system.

Recovery (R) Flags
The R Flag in the Client Budget on the LISA system indicates the recovery status of a debt on an active file. The Recoverable Balance and R Flag are downloaded from the Recoveries System to LISA the day after a debt is made permanent or an existing debt on a closed file downloads from CCD to LISA. The R Flag must be changed in LISA if the rate of recovery is reduced from the default deduction rate due to negotiation or a decision by the Appeal Panel.

There are five options for R Flags on LISA:

1. Blank R Flag: no debt exists.
2. R Flag 0: recoverable balance was repaid, no deductions are being taken off.
3. R Flag 1: defaulted monthly deductions are being taken off an active client’s benefits and being applied towards their debt.
4. R Flag 2: the recovery rate has been adjusted (increased or decreased) from the defaulted deduction rate.
5. R Flag 3: recovery action is suspended (e.g. due to Appeal Panel’s direction). This will stop the recovery deduction from the next benefit period.

Notification of Debt with the Government of Alberta

Regardless of whether the client’s file is active or closed, they must be notified of their debt with the Government of Alberta. The Debt Notice from the Recoveries System includes the Statement of Debt and provides the following debt information:

• All debts with Seniors, Community and Social Services
• All payments made
• Any adjustments made
• The current outstanding balance owing to Seniors, Community and Social Services.

The Statement of Debt is produced when an overpayment is determined to be a debt repayable to the department and also may be printed as required by the worker (e.g. appeal hearings, client requests, etc.). It can be given to a client at any time, including at the client’s request.

PROCEDURES

The procedures for an overpayment becoming a debt for Active and Closed files is described in Phase 3 of the Overpayment Process.

If a worker knows a client’s file is closing, they should:

1. Attempt to call the client to discuss the collection process on a closed file.
2. Advise the client:
   • They will receive a letter informing them of their outstanding debt with the Government of Alberta including: the total amount of all outstanding debt(s) owed to Seniors, Community and Social Services, where to send payments or who to contact regarding payment arrangements and consequences of not paying their debt, and
   • To continue making payments they can afford on their debt to avoid being pursued for collection purposes, and
   • They may be referred to a collection agency if they do not make monthly payments or payment arrangements.

Note
If the client’s outstanding balance is $100 or less, LISA will not print an Outstanding Debt with the Government of Alberta (EMP 2562) letter.

Adjusting the Recovery Rate
When one of the above conditions is met for adjusting a recovery rate, the worker will:

1. Enter the following in the Recoveries System Internal Comments and Compass Comments:
   • The reason for adjusting the recovery rate in accordance with policy,
     and
   • The expected duration of the varied recovery rate.
2. Change the R Flag in LISA and enters the new amount of the recovery deduction.
3. Enter a 6-month Reminder to ensure the client’s circumstances continue to warrant the continuation of an increased or decreased recovery rate.
4. Advise the client of the decision to adjust their recovery rate and send the client a letter which includes:
   
   • The reason for the increase or decrease in their recovery rate, and
   • The amount of the new recovery deduction, and
   • Their right to appeal the amount of their new recovery deduction.

Third Party Debtors are not necessarily clients with an active Personal Identification Number (PID), who may have received a third-party payment on behalf of a client (i.e. a landlord), or have been a defaulted sponsor or received payment under another circumstance. The client, audit, or investigation staff may advise the program of a third-party overpayment.

When a worker is advised of a third-party overpayment:

1. The worker confirms the accuracy of the information and determine the amount of the overpayment.
2. As the overpayment can only be entered into the Non-IS Debt Group portfolio by Treasury Board and Finance, the worker must notify the third party in writing of:
   
   • The amount of the overpayment,
   • The reason for the overpayment, and
   • The right to appeal.
     
     Note
     The worker’s name and phone number are included in the letter in case the third-party debtor requires more information or wishes to appeal.
     
     
3. Once the appeal period has elapsed or the appeal has been concluded by the Citizen's Appeal Panel, the worker must notify the debtor that full (or partial) payment can be made at any Alberta Supports Centre or by mailing payment directly to:
   
   Treasury Board and Finance
   Collections Unit
   PO Box 11417
   Edmonton AB T5J 3E4
   
   Note
   The Alberta Supports Centre receiving the payment is responsible to issue a receipt to the third-party debtor.
   
   
4. The worker sends the information requested on the Treasury Board and Finance Third Party Debt Information (EMP3898) form to Treasury Board and Finance at TBF.Collections@gov.ab.ca.
5. Treasury Board and Finance enters the overpayment as a Non-IS Debt Group in the Recoveries System.
6. All collection activities will be pursued in the same manner as debts on closed files.

Debt Payments at an Alberta Supports Centre
If a person chooses to pay their debt at an Alberta Supports Centre, the person who receives the payment at the front desk will:

1. Ask the person if they are making payment towards an Income Support debt.
2. Accept the payment.
3. Issue the person a receipt.
4. Follow the Finance cash handling procedure.

When Amounts Were Not Known (i.e., not entered in Recoveries System) and Payment is Received (i.e., insurance claims, WCB)

When a payment is received for any of the following reasons:

• A lump sum payment is made (i.e., an insurance claim, WCB).
• Benefits are returned from a client or third party.

The worker:

1. Determines if any duplicate payment has occurred or what benefits were not needed, for what POA(s) and the amount(s) for each POA.
2. Determines if the payment or a portion of the payment is for the prior fiscal year or the current fiscal year.

Note
Payments pertaining to a prior fiscal year are applied against Prior Year Revenue. Any payments or portion of a payment pertaining to the current fiscal year is applied against the budget (return of benefits) which will be used to offset expenditures for the current year.

Payment for prior fiscal year

• The worker will enter the entire debt in the Recoveries System.
• Staff will enter the payment on the cash blotter and appropriate payment code which will be applied against the debt in the Recoveries System.

Payment or the portion of the payment pertaining to the current fiscal year

• The worker will not make an entry in the Recoveries System.
• Staff will enter the payment or the portion of the payment pertaining to the current fiscal year and appropriate payment code for the current fiscal year on the cash blotter as a current year expenditure.

Example

A client receives an insurance settlement of $3,000 in which $2,000 is related to benefits received in the prior fiscal year and $1,000 is for benefits that relate to the current fiscal year starting April 1st.

The $2,000 is set up by the worker in the Recoveries System.  The cash blotter will show one entry for $2,000 which is to be applied to the debt in the Recoveries System and for $1,000 which is to be applied against the current year expenditure code.

Note
Any related documents will be forwarded to the current worker, if the file is still active, or the last worker, if the file is closed.

Workers may need to enter a debt on a file they do not have access to.  The assigned worker on CCD can grant access to any person who has Recoveries System access.