Federal Emergency Management Agency

An Important Update on Our Recoupment Process

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Over the past year, as directed by law, FEMA has re-initiated an improved process for identifying cases of improper payments made to individuals after disasters and to take steps to recover those funds. As we have explained before on this blog, several laws require FEMA and other federal agencies to conduct this process, known as “recoupment.” At the direction of our current leadership, we have worked within the legal constraints of these laws to make the process more fair and understandable for both disaster survivors and taxpayers. However, under these existing laws, FEMA was unable to waive debts.

Last week, Congress passed a law providing FEMA discretion to waive certain debts from disasters declared between August 2005 and the end of 2010 if the debt arose from an improper individual assistance payment made as a result of FEMA’s error, there was no fault on the part of the survivor, and the survivor currently has an income of $90,000 or less. The law does not apply to recoupment efforts for disasters declared after Jan. 1, 2011.

FEMA is committed to implementing the law to the fullest extent possible so that it meets its intended purpose: to offer a fair resolution to those survivors who received improper payments through no fault of their own and who may be unable to repay their debt due to their financial circumstances.

So now that the law has been passed, what next?

FEMA is currently reviewing the law and developing a plan to implement it. This includes examining the reasons for recoupment and the potential population of survivors who might be eligible to have their debts waived. We look forward to continuing to work with lawmakers and all interested stakeholders during this effort.

As we begin work on this implementation plan, FEMA is not scheduled to send any new debts to Treasury for collection before Jan. 13, 2012. We know that there are many survivors and other stakeholders who will have questions about the effects of this new law. While we are just beginning to determine how to implement this brand new law, the legislation does make clear that a recoupment case must meet all of the following criteria in order to be eligible for full forgiveness:

  • The improper payment was received from disasters declared between Aug. 28, 2005 (Hurricane Katrina) and Dec. 30, 2010;
  • The improper payment was a result of an error solely on FEMA’s part – not on the part of a survivor;
  • The improper payment cannot have involved fraud, false claim or misrepresentation by the survivor;
  • The survivor’s adjusted gross income for the last taxable year was less than $90,000 (a survivor with an income of greater than $90,000 whose case meets the other qualifying criteria could be eligible for a partial waiver) ; and
  • The collection of the debt would be against “good conscience and equity.”

Our priority is to ensure that all survivors have clear and complete information about these changes once we have an implementation plan to share, and we are working to make that happen as quickly as possible.

It is important to note that Congress wrote this law to apply only to recoupment efforts for older disasters. As we have also explained before, in recent years we have taken significant steps to put strong protections in place to cut down on the percentage of improper payments disbursed after disasters – and it is now less than one percent, on average. We will continue to do everything we can to reduce the need for any potential recoupments for current and future disasters.

We want to move expeditiously on this implementation effort, but we also want to get it right. We thank all of our stakeholders – especially survivors – for their patience as we move into the next phase or this effort and look forward to working together to make these important changes a reality.

Last Updated: 
06/18/2012 - 10:15
Posted on Fri, 12/23/2011 - 20:12
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Anonymous:

What happens to the one,s that paid this overpayme...

What happens to the one,s that paid this overpayment back not by their fault they received it and their income was below (90.000.00)
Anonymous:

My appeal date has passed I was told that employee...

My appeal date has passed I was told that employee error would not be accepted as an appeal reason so I did not peruse the case any further. With this new law will I be given another time frame to appeal since employee error will be a reason now?

@Anonymous- Thank you for reaching out to us. We w...

@Anonymous- Thank you for reaching out to us. We would like to follow up, could you please send an email to FEMA-New-Media@dhs.gov?
J.Bankston:

I lived in my university's on campus dorms whe...

I lived in my university's on campus dorms when Hurricane Rita devastated our city. I lost ALL of my personal possessions and now FEMA has sent me a recoupment letter asking me to return some $2000. I appealed and supplied a letter fromt the university's vice-president, which indicates that I lived on campus the entire school year preceding hurricane Rita (Approximately 10 of the preceding 12 months w/ the two missing months being the summer months of June and July); I received a response yesterday, and my appeal was summarily DENIED with NO EXPLANATION as to why my 10 month dorm living does not satisfy the Hurricane Katrina/Rita Student Recoupment Modification's "major portion of the school year" requirement, as set forth in Release Number: FNF-07-023. <br /><br />Of course, I seemingly have no way to make this inquiry since the appeal letter says the determination is final - despite the lack of an explanation why my supporting documents were insufficient.<br /><br />With this new law, will I be given another time frame to appeal?

Though FEMA has been required by several laws to r...

Though FEMA has been required by several laws to recoup federal dollars that were improperly distributed, we know that the recoupment process can be very challenging for survivors, and we encourage all individuals who receive a recoupment notice to explore all the options available to them. In addition to filing an appeal, survivors also may request a repayment plan or request a compromise due to inability to pay. For information on how to apply for a payment plan or compromise, visit http://bit.ly/yd7aUq. FEMA is working diligently to implement the new waiver authority provided to us in the Disaster Assistance Recoupment Fairness Act, signed into law as part of the Fiscal Year 2012 appropriations bill on December 23, 2011, which will allow FEMA to waive some debts under specific circumstances. We will share details about eligibility for this process as soon we are able.<br /><br />To assist you with your specific case, we would like to connect you with our Individual Assistance team to help you understand options and ask that you send us an e-mail at FEMA-New-Media@dhs.gov so we can follow up.
Anonymous:

I would just like to say that my situation is simi...

I would just like to say that my situation is similar to J. Bankston's, however I supplied all the appropriate paper work in June '11 to see if I qualified for a waiver, compromise, and/or payment plan and to date have not received any correspondence from the Agency. I've contacted the Agency numerous time to no avail and thus contacted my state senator for a congressional inquiry into my case (which is on going). <br /><br />The failure of this Agency, which includes, but is not limited to: to effectively communicating, providing clear and concise guidance to those of us who are trying to comply with the Agency's requests, the Code of Federal Regulations, as well as the Robert T. Stafford act is incomprehensible and inexcusable.<br /><br />Government employees are subject to background checks, annual ethics training's, credit checks (as well as annual training on the use the Agency's social media tools) etc. Those persons who do work for the government (and those who don't) who are trying to comply with the Agency's requests, should not have their cases turned over to the Department of the Treasury, their wages garnished, possibly lose their security clearances, JP Morgan Chase travel card, and possibly their job because of the lack cooperation from the Agency when some people are trying desperately to resolve their cases with no help from the Agency.
katrina victim:

do i need to file for a payment plan? i've alr...

do i need to file for a payment plan? i've already paid half of the debt payment, however,i can only make 100-200$ montly payments here on. do i just continue to make the monthly payment on the pay.gov site or do i have to file for request for a payment plan? i'm approaching the 90day mark.

@katrina victim - FEMA is committed to working wit...

@katrina victim - FEMA is committed to working with all individuals identified for recoupment to ensure they have a complete understanding of the determination made in their case and the various options available to them to resolve this debt. If you have questions about your case, please contact FEMA’s Recoupment Helpline at 1-800-816-1122 or TTY at 1-800-462-7585 for persons who are Deaf, Hard of Hearing or those with speech disabilities, between the hours of 9:00 a.m. and 8:00 p.m. EST, Monday through Friday.

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