An applied deduction is an amount that can be deducted from a benefit payment and applied toward an outstanding liability owed to the organization. For example, $10 of a person's benefit payment can be applied toward an overpayment that was previously issued to that person.
Applied deductions can be allocated toward liabilities incurred by the primary client of the benefit payment or to any other participant. For example, part of the benefit payment can be allocated toward a liability incurred by another member of the household..