Food stamp recipients in Maine who received extra benefits last year will not have to repay the government after all, federal officials say, meaning the mistake could cost the state nearly $3 million.

In a letter sent Monday to Health and Human Services Commissioner Mary Mayhew, the U.S. Department of Agriculture said a “systematic error” led to overpayments for about 70,000 Maine families under the federally funded Supplemental Nutrition Assistance Program, commonly known as food stamps. The average overpayment totaled about $70 per household over four months in 2011.

“As a result, (the USDA) is establishing a claim of $4,861,920 against Maine and is prohibiting DHHS from collecting the overissuances from the households affected by the DHHS decisions,” according to the letter.

Mayhew said Thursday that Maine will appeal that claim. She said the federal government reversed an earlier position because of “political pressure.”

In March, the USDA told the state that it could try to recoup the overpayments from recipients.

“We are surprised and dismayed” by this week’s letter, Mayhew said, “especially because we have a letter dated March 30 that instructed Maine to pursue collection of overpayment.”

From April through July of last year, about one-third of food stamp recipients in Maine received more than they were eligible to receive. The error was caused by the state and federal governments’ competing legal requirements, according to the USDA.

In 2010, federal officials boosted food stamp benefits as a way to offset increased heating costs. The 2009 American Reinvestment and Recovery Act provided the extra money for the program.

Those benefits were reduced to normal levels by April 2011. Maine, however, continued to distribute benefits in the higher amount until July of 2011.

The USDA discovered the error through an audit in November and said it wanted the money back. Initially, it said repayments could be considered on a case-by-case basis and gave the DHHS discretion to lower repayments for some recipients.

That was detailed in the letter to the state in March.

In July of this year, the DHHS sent letters telling recipients that they would receive fewer benefits in the coming months to make up for overpayments. Many families protested. Benefits have not yet been cut back.

“We heard from dozens of food stamp beneficiaries who suddenly, out of the blue, were informed that they owed the state $80,” said U.S. Rep. Chellie Pingree, D-Maine, in a prepared statement Thursday. “These families didn’t do anything wrong, the overpayment was due to an administrative mistake, and there was no way they could have possibly known they were getting a few dollars more a month than they should have.”

Pingree is married to S. Donald Sussman, majority share owner of the Portland Press Herald/Maine Sunday Telegram.

Kristen Rorer of Waterville was one of the food stamp recipients who called Pingree. She said she receives $185 a month in benefits and uses coupons to stretch every dollar.

“The price of food just goes up and up, but benefits don’t go up,” she said. “Is the state going to be sending us letters now telling us we can keep the money?”

Dorothy Soule of Farmington also got the letter saying she owed the state money.

“It totally hit me out of the blue. I went into a panic attack,” said the former librarian, who lives on disability and gets $181 a month in food stamps.

The USDA now says beneficiaries shouldn’t be punished for the state’s mistake. It criticized state officials for letting the mistake happen.

“It is unfortunate that Maine did not pursue a consultation,” said Monday’s letter to Mayhew. “This would have afforded (the USDA) the opportunity to properly advise the state of their legal responsibilities and options, and likely would have prevented the establishment of these claims.”

Mayhew said her department has been in contact with federal officials.

States were instructed to change methodology for determining eligibility, she said. Maine lagged by about three months and was punished for it.

“What policy makers need to evaluate is the inconsistency of demands of the federal government,” she said. “They are putting liability squarely on the state without taking any responsibility.”

Even if its appeal is denied, Maine will have to pay back only $2.8 million of the $4.8 million, according to the USDA, because the state received bonus awards for 2011 that can be applied to the rest. The USDA awarded extra money to states that showed excellence in certain areas.

Democratic leaders criticized Republican Gov. Paul LePage and his administration for the error that caused the overpayments.

“We are relieved to hear that struggling families won’t have to pay the price for the LePage administration’s mismanagement,” said House Minority Leader Emily Cain. “The administration must take responsibility for its mistakes, not shift costs to Maine people.”

Sen. Justin Alfond, D-Portland, assistant Senate minority leader, said, “The administration’s ongoing neglect of the law and mismanagement is costing Maine taxpayers. As seen here, (LePage’s) arrogant approach is harmful to Maine families and now it’s costing all of us. Who can guess at what other ‘errors’ have yet to be uncovered.”

LePage’s office declined to comment, referring questions to the DHHS.

Other problems in the DHHS have been well documented.

In July, federal officials asked Maine to refund $9.2 million because of claim errors in the state’s Medicaid program from 2005 to 2009.

In April, Mayhew told lawmakers that the state had mistakenly paid $10.7 million to medical providers over two years for about 8,000 patients who were ineligible for the Medicaid services they received.

Maine was told that it would have to pay $3.8 million to the federal government – its share of the cost.

In May, lawmakers held off voting on a supplemental budget for the DHHS in part because of an accounting error that led to the discovery of $14.3 million in additional revenue.

“We’re seeing a pattern of behavior from the administration,” Alfond said. “It seems they’re in over their head.”

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