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Review each hearing request on an overpayment, to determine if equitable estoppel is a factor. If yes, apply the following guidelines to determine if the case is appropriate for use of the stipulation and agreed order.
Guidelines for Establishment of Equitable Estoppel:
An admission, statement, or act by the agency, which is inconsistent with a later claim. The agency made a statement, took an action, or failed to act and later found that it was incorrect. The individual is informed after the fact that the error was made.
Factors which may be used as evidence of element #1:
- The agency had all the information available to correctly determine eligibility
- The individual received the coverage.
- The agency has assessed an overpayment.
An action by the individual on the faith of the agency's admission, statement or act. The individual must have taken some action that was reasonable given the circumstances; e.g. utilized the COPES services.
Factors which may be used as evidence of element #2:
- The individual's belief in the agency's action was reasonable.
An injury to the individual arising from permitting the agency to contradict or repudiate such admission, statement or act. The individual experiences either a loss or a detrimental change in their position because the agency reverses a decision regarding eligibility. Depending on the specific circumstances of the case, the imposition of a debt that could not be anticipated or avoided by the individual may establish injury.
Factors which may be used as evidence of injury:
- Spent the money on items they would not have otherwise bought and which are not an available resource.
- Paid outstanding debts they would not otherwise have paid
- Failed to use an available family or community resource due to the receipt of the benefits. Food Banks, help from relatives, the Salvation Army.
Equitable estoppel is necessary to prevent a manifest injustice. The overpayment is clearly unfair to the individual based on the way that it occurred and repayment would compromise the individual's ability to meet basic needs.
Factors which can be used as evidence of element #4:
- The individual cannot repay the overpayment without drawing on funds needed for basic requirements.
- It is clear that the individual acted in good faith by following the rules required to maintain eligibility.
- The individual reported income timely and accurately;
- The overpayment was solely due to agency error; and
- The individual has "clean hands", meaning they are without fault. The individual fulfilled all their responsibility to inform the agency of changes in their circumstances.
Applying equitable estoppel will not impair the exercise of governmental powers. Element #5 will be considered to be met unless there is an extraordinary circumstance. This element must be considered on a case by case basis. The cumulative effect of equitable estoppel applied to many cases is not permitted.