What is Recoupment?

Recoupment is when FEMA seeks repayment of assistance delivered to a disaster survivor. The most common reasons for recoupment are:

  1. The assistance created a duplication of benefits. A duplication of benefits occurs when insurance or other non-FEMA aid pays for the exact same damage as FEMA aid. For example, if your insurance covered the complete cost of replacing your roof, and FEMA also gave funds to repair your roof, FEMA may seek reimbursement for the amount that was supposed to be spent on the roof but was not because your insurance paid for the roof repair. 
  2. Not all of the information needed to qualify for assistance was valid, verifiable, or is simply missing from FEMA records.
  3. The assistance funds were spent on things other than recovery.  Such as, FEMA gave money for roof repair and you spent the money on a fence for the yard. 
  4. FEMA believes there was fraud or misrepresentation in the application.
  5. The assistance was provided due to an error on FEMA’s part.

Recoupment Process

The process begins with notification to the Disaster Survivor of the potential debt via the Notice of Potential Debt Letter. DO NOT IGNORE THIS LETTER.

The Notice of Potential Debt Letter contains the:

  1. Amount of the potential debt
  2. Reason FEMA believes the debt may be owed
  3. Process to apply for a waiver or appeal the potential debt
  4. Documents needed in order to dispute the debt

Challenging the Debt

To challenge the determination of the debt you must appeal the decision. Follow the appeal process in the letter to challenge the decision. If you do not follow the procedure you will owe FEMA the money stated in the letter and any interest that may accrue upon the amount.

Interest will begin to accruing on the potential debt 30 days after the date of the Notice of Potential Debt Letter, so do not delay in handling this letter. 

If you follow the process, FEMA will grant or deny your appeal within 90 days of the date the appeal was filed. If your appeal is granted the debt will be terminated or adjusted to a smaller amount. If your appeal is denied the debt will become final and FEMA will send a Notice and Demand Letter with the final amount of the debt and a way to start repaying the debt. Please note that once the Notice and Demand Letter has been sent the debt is not appeal-able. However FEMA may work with you to set up a repayment plan.

You do not need to have a lawyer to make the appeal, but it is highly recommended.

Helpful Links

FEMA Individual Assistance and Program Policy Guide (IAPPG) Version 1.1    Chapter 3, Section VII, pages 176-182