The department shall promptly take all necessary steps to correct any overpayment or underpayment of cash assistance paid under this chapter, and, in the case of:

(1)  An overpayment to an individual who is a current recipient of cash assistance (including a recipient whose overpayment occurred during a prior period of ineligibility), recovery will be made by repayment by the individual or by reducing the amount of any future cash assistance payable to the family of which he or she is a member, except that the recovery shall not result in the reduction of cash assistance payable for any month, such that cash assistance, when added to its income, is less than ninety percent (90%) of the standard of assistance for a family/assistance unit with the same composition with no other income (and, in the case of an individual to whom no payment is made for a month solely by reason of recovery of any overpayment, the individual shall be deemed to be a recipient of cash assistance for that month);

(2)  An overpayment to any individual who is no longer receiving cash assistance under the plan, recovery shall be made by appropriate action by the department under federal and state law against the income or resources of the individual, the family, or the prior assistance unit; and

(3)  An underpayment, the corrective payment shall be disregarded in determining the income of the family, and shall be disregarded in determining its resources in the month the corrective payment is made and in the following month; except that no recovery need be attempted or carried out under subsection (2), other than in a case involving fraud on the part of the recipient where the cost of recovery would equal or exceed the amount of overpayment involved.