Recoupment

From FEMA Answers

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Recoupment Suspended

As of September 5, 2008, FEMA has cancelled all notices sent before September 2008 claiming people must repay disaster assistance from Hurricanes Katrina and Rita. Affected individuals may not get notice of this directly from FEMA.

The cancellation is because FEMA plans to change how it makes overpayment claims against people affected by Hurricanes Katrina and Rita.

FEMA plans to review Katrina and Rita files again, to decide whom it thinks owes money back

If FEMA decides again that money is owed, it will send a new notice with new appeal rights. If that happens, there will be deadlines for appealing. Any appeals should be filed within the time limits. Contact your local free legal aid office to see if it can help you with the appeal. If possible, you should have a lawyer to help you. You should probably ask for a hearing on your appeal. FEMA may be granting hearings by phone; this is not yet determined.

If you received an overpayment notice before, you should:

1. Contact FEMA to update or confirm your mailing address and phone number on file so you do not miss any new notices. Remember to give them your FEMA application number for Hurricane Katrina/Rita .
2. Keep all of your documents, receipts, and other evidence, including records of any payments made to the Disaster Finance Center, just in case.
3. Call a lawyer right away if you get a new FEMA notice, and be sure to appeal on time.

If you are now paying on the debt, you can either keep making those payments, or stop making the payments. If you paid money and FEMA decides in its new review that you should not owe the money, FEMA should return any money you have paid.

FEMA is still deciding what to do. FEMA has not said yet when it will start reviewing cases and when it will send new notices of decisions.

The official notice setting out the change can be found at:

http://edocket.access.gpo.gov/2008/E8-20587.htm

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Historical Information

FEMA is now sending bills for recoupment of assistance funds granted to applicants. The majority of these we have seen so far are for shared household rule and insufficient damage. If you receive a Recoupment Letter from FEMA, you have sixty days to appeal it. Thirty days after the letter is mailed, interest will begin to accrue, so it is best to appeal it as soon as possible. To appeal, write FEMA that you believe FEMA is wrong to recoup the funds, and you are formally appealing FEMA’s decision that you are not eligible for the assistance. Sample Letters and a form letter are provided for reference below.

Under 44 CFR §11.51(b)(1), Recoupments can be terminated if:

Collection action may be terminated and the Agency file closed for the following reasons: (i) No substantial amount can be collected; (ii) the debtor cannot be located; (iii) the cost will exceed recovery; (iv) the claim is legally without merit; or (v) the claim cannot be substantiated by evidence.

FEMA is sending out recoupment notices that state that it expects pre-disaster shared households to continue to live together after the disaster. Shared Household Recoupment Notice. FEMA sends these letters regardless of whether, in the individual case, the shared household split apart after the disaster and are otherwise eligible. This interpretation of the shared household rule is wrong, and these decisions by FEMA should be appealed.

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Sample Appeals:

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Form Letter:

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Forms You Will Need to Fill Out and File with the Appeal



  • Hardship Waiver Form is for Applicants who are unemployed or on a fixed income or facing financial difficulties and will not be able to repay the recoupment amount.