(1) The department may recover the value of any TANF benefits paid to or on behalf of an assistance unit to which it was not entitled, regardless of whether the overpayment occurred due to an error by the department, a nonfraudulent action or omission by the TANF participant, or fraudulent action by the TANF participant.

(2) Recovery may be made from the filing unit which was overpaid, from any individual member of the assistance unit at the time when the overpayment occurred, or from any assistance unit which includes a person who was a member of the overpaid filing unit at the time when the overpayment occurred.

(3) Recovery of TANF cash assistance shall be made as follows:

(a) If an overpayment of benefits has occurred due to fraudulent action by a member of the filing unit, the sum which must be repaid is 125% of the amount of assistance to which the assistance unit was not entitled. Fraudulent action includes but is not limited to the making of an intentionally false statement or misrepresentation and the intentional withholding of information.

(b) If an overpayment of benefits has occurred due to department error or a nonfraudulent error by a member of the filing unit, the sum which may be recovered is 100% of the amount of assistance to which the assistance unit was not entitled.

(c) The department is entitled to recover an overpayment regardless of whether any or all of the members of the overpaid assistance unit are currently receiving assistance.

(i) In the case of an individual or assistance unit currently receiving assistance, the department may recover an overpayment by reducing the current cash assistance amount by 10% or $10 whichever is higher, and retaining the sum by which the cash assistance has been reduced to repay the overpayment. At the department's option, recovery may also be made by voluntary payments by a member of the overpaid assistance unit or any other legal means available to collect a debt, including the use of offset against any monies which the state of Montana owes or may owe to a member of the filing unit.

(ii) In the case of an individual or assistance unit currently receiving assistance, and the overpayment is due to the receipt of continued benefits pending a fair hearing regarding a sanction, which was ruled in favor of the department, the department may recover an overpayment by reducing the current cash assistance amount by 25% or $25 whichever is higher, and retaining the sum by which the cash assistance has been reduced to repay the overpayment. At the department's option, recovery may also be made by voluntary payments by a member of the overpaid assistance unit or any other legal means available to collect a debt, including the use of offset against any monies which the state of Montana owes or may owe to a member of the filing unit.

(iii) In the case of individuals who are not currently receiving assistance, recovery may be made by voluntary payments by a member of the overpaid assistance unit or any other legal means available to collect a debt, including the use of offset against any monies which the state of Montana owes or may owe to a member of the filing unit.

(4) When an assistance unit has been underpaid due to an error by the department or the participant or due to any other reason, the underpayment shall be corrected by issuing a supplemental payment in the amount by which the assistance unit was underpaid.

(a) For purposes of determining continued eligibility and amount of assistance, the additional amount paid to the assistance unit to correct an underpayment will not be considered as income or as a resource in the month it is paid nor in the following month.