How will Treasury entities offset a Federal employee's salary to collect a
(a) Federal salary offset.(1) Salary offset is used to collect debts
owed to the United States by Treasury Department and other Federal employees. If a
Federal employee owes a Treasury debt, Treasury entities may offset the employee's
Federal salary to collect the debt in the manner described in this section. For
information on how a Federal agency other than a Treasury entity may collect debt
from the salary of a Treasury Department employee, see §§ 5.20 and 5.21, subpart C,
of this part.
(2) Nothing in this part requires a Treasury entity to collect a Treasury debt in
accordance with the provisions of this section if Federal law allows otherwise. See, for example,5 U.S.C. 5705 (travel advances not used for allowable
travel expenses are recoverable from the employee or his estate by setoff against
accrued pay and other means) and 5 U.S.C. 4108 (recovery of training expenses).
(3) Treasury entities may use the administrative wage garnishment procedure
described in § 5.13 of this part to collect a debt from an individual's non-Federal
(b) Centralized salary offset through the Treasury Offset Program. As
described in § 5.9(a) of this part, Treasury entities will refer
Treasury debts to the Financial Management Service for collection by administrative
offset, including salary offset, through the Treasury Offset Program. When possible,
Treasury entities should attempt salary offset through the Treasury Offset Program
before applying the procedures in paragraph (c) of this section. See 5 CFR
(c) Non-centralized salary offset for Treasury debts. When
centralized salary offset through the Treasury Offset Program is not available or
appropriate, Treasury entities may collect delinquent Treasury debts through
non-centralized salary offset. See 5 CFR 550.1109. In these cases,
Treasury entities may offset a payment internally or make a request directly to a
Federal payment agency to offset a salary payment to collect a delinquent debt owed
by a Federal employee. If the Federal payment agency is another Treasury entity, the
Treasury entity making the request shall do so through the Deputy Chief Financial
Officer as described in § 5.20(c) of this part. At least thirty (30) days prior to
offsetting internally or requesting a Federal agency to offset a salary payment,
Treasury entities will send notice to the debtor in accordance with the requirements
of § 5.4 of this part. When referring a debt for offset, Treasury entities will
certify to the payment agency, in writing, that the debt is valid, delinquent and
legally enforceable in the amount stated, and there are no legal bars to collection
by salary offset. In addition, Treasury entities will certify that all due process
and other prerequisites to salary offset have been met. See5 U.S.C.
5514, 31 U.S.C. 3716(a), and this section for a description of the due process and
other prerequisites for salary offset.
(d) When prior notice not required. Treasury entities are not
required to provide prior notice to an employee when the following adjustments are
made by a Treasury entity to a Treasury employee's pay:
(1) Any adjustment to pay arising out of any employee's election of coverage or a
change in coverage under a Federal benefits program requiring periodic deductions
from pay, if the amount to be recovered was accumulated over four pay periods or
(2) A routine intra-agency adjustment of pay that is made to correct an overpayment
of pay attributable to clerical or administrative errors or delays in processing pay
documents, if the overpayment occurred within the four pay periods preceding the
adjustment, and, at the time of such adjustment, or as soon thereafter as practical,
the individual is provided written notice of the nature and the amount of the
adjustment and point of contact for contesting such adjustment; or
(3) Any adjustment to collect a debt amounting to $50 or less, if, at the time of
such adjustment, or as soon thereafter as practical, the individual is provided
written notice of the nature and the amount of the adjustment and a point of contact
for contesting such adjustment.
(e) Hearing procedures—(1) Request for a hearing. A
Federal employee who has received a notice that his or her Treasury debt will be
collected by means of salary offset may request a hearing concerning the existence
or amount of the debt. The Federal employee also may request a hearing concerning
the amount proposed to be deducted from the employee's pay each pay period. The
employee must send any request for hearing, in writing, to the office designated in
the notice described in § 5.4. See § 5.4(a)(11). The request must be
received by the designated office on or before the 15th calendar day following the
employee's receipt of the notice. The employee must sign the request and specify
whether an oral or paper hearing is requested. If an oral hearing is requested, the
employee must explain why the matter cannot be resolved by review of the documentary
evidence alone. All travel expenses incurred by the Federal employee in connection
with an in-person hearing will be borne by the employee.
(2) Failure to submit timely request for hearing.(e) employee
fails to submit a request for hearing within the time period described in paragraph
(e)(1) of this section, the employee will have waived the right to a hearing, and
salary offset may be initiated. However, Treasury entities should accept a late
request for hearing if the employee can show that the late request
was the result of circumstances beyond the employee's control or because of a
failure to receive actual notice of the filing deadline.
(3) Hearing official. Treasury entities must obtain the services of a
hearing official who is not under the supervision or control of the Secretary.
Treasury entities may contact the Deputy Chief Financial Officer as described in §
5.20(c) of this part or an agent of any agency designated in Appendix A to 5 CFR
part 581 (List of Agents Designated to Accept Legal Process) to request a hearing
(4) Notice of hearing. After the employee requests a hearing, the
designated hearing official shall inform the employee of the form of the hearing to
be provided. For oral hearings, the notice shall set forth the date, time and
location of the hearing. For paper hearings, the notice shall notify the employee of
the date by which he or she should submit written arguments to the designated
hearing official. The hearing official shall give the employee reasonable time to
submit documentation in support of the employee's position. The hearing official
shall schedule a new hearing date if requested by both parties. The hearing official
shall give both parties reasonable notice of the time and place of a rescheduled
(5) Oral hearing. The hearing official will conduct an oral hearing
if he or she determines that the matter cannot be resolved by review of documentary
evidence alone (for example, when an issue of credibility or veracity is involved).
The hearing need not take the form of an evidentiary hearing, but may be conducted
in a manner determined by the hearing official, including but not limited to:
(i) Informal conferences with the hearing official, in which the employee and
agency representative will be given full opportunity to present evidence, witnesses
(ii) Informal meetings with an interview of the employee by the hearing official;
(iii) Formal written submissions, with an opportunity for oral presentation.
(6) Paper hearing. If the hearing official determines that an oral
hearing is not necessary, he or she will make the determination based upon a review
of the available written record, including any documentation submitted by the
employee in support of his or her position.
(7) Failure to appear or submit documentary evidence. In the absence
of good cause shown (for example, excused illness), if the employee fails to appear
at an oral hearing or fails to submit documentary evidence as required for a paper
hearing, the employee will have waived the right to a hearing, and salary offset may
be initiated. Further, the employee will have been deemed to admit the existence and
amount of the debt as described in the notice of intent to offset. If the Treasury
entity representative fails to appear at an oral hearing, the hearing official shall
proceed with the hearing as scheduled, and make his or her determination based upon
the oral testimony presented and the documentary evidence submitted by both
(8) Burden of proof. Treasury entities will have the initial burden
to prove the existence and amount of the debt. Thereafter, if the employee disputes
the existence or amount of the debt, the employee must prove by a preponderance of
the evidence that no debt exists or that the amount of the debt is incorrect. In
addition, the employee may present evidence that the proposed terms of the repayment
schedule are unlawful, would cause a financial hardship to the employee, or that
collection of the debt may not be pursued due to operation of law.
(9) Record. The hearing official shall maintain a summary record of
any hearing provided by this part. Witnesses will testify under oath or affirmation
in oral hearings.
(10) Date of decision. The hearing official shall issue a written
opinion stating his or her decision, based upon documentary evidence and information
developed at the hearing, as soon as practicable after the hearing, but not later
than 60 days after the date on which the request for hearing was received by the
Treasury entity. If the employee requests a delay in the proceedings, the deadline for the decision may be postponed by the number of days by which
the hearing was postponed. When a decision is not timely rendered, the Treasury
entity shall waive penalties applied to the debt for the period beginning with the
date the decision is due and ending on the date the decision is issued.
(11) Content of decision. The written decision shall include:
(i) A statement of the facts presented to support the origin, nature, and amount of
(ii) The hearing official's findings, analysis, and conclusions; and
(iii) The terms of any repayment schedules, if applicable.
(12) Final agency action. The hearing official's decision shall be
(f) Waiver not precluded. Nothing in this part precludes an employee from
requesting waiver of an overpayment under 5 U.S.C. 5584 or 8346(b), 10 U.S.C. 2774,
32 U.S.C. 716, or other statutory authority.
(g) Salary offset process—(1) Determination of disposable
pay. The office of the Deputy Chief Financial Officer will consult with the
appropriate Treasury entity payroll office to determine the amount of a Treasury
Department employee's disposable pay (as defined in § 5.1 of this part) and will
implement salary offset when requested to do so by a Treasury entity, as described
in paragraph (c) of this section, or another agency, as described in § 5.20 of this
part. If the debtor is not employed by the Treasury Department, the agency employing
the debtor will determine the amount of the employee's disposable pay and will
implement salary offset upon request.
(2) When salary offset begins. Deductions shall begin within three
official pay periods following receipt of the creditor agency's request for
(3) Amount of salary offset. The amount to be offset from each salary
payment will be up to 15 percent of a debtor's disposable pay, as follows:
(i) If the amount of the debt is equal to or less than 15 percent of the disposable
pay, such debt generally will be collected in one lump sum payment;
(ii) Installment deductions will be made over a period of no greater than the
anticipated period of employment. An installment deduction will not exceed 15
percent of the disposable pay from which the deduction is made unless the employee
has agreed in writing to the deduction of a greater amount or the creditor agency
has determined that smaller deductions are appropriate based on the employee's
ability to pay.
(4) Final salary payment. After the employee has separated either
voluntarily or involuntarily from the payment agency, the payment agency may make a
lump sum deduction exceeding 15 percent of disposable pay from any final salary or
other payments pursuant to 31 U.S.C. 3716 in order to satisfy a debt.
(h) Payment agency's responsibilities.(1) As required by 5 CFR
550.1109, if the employee separates from the payment agency from which a Treasury
entity has requested salary offset, the payment agency must certify the total amount
of its collection and notify the Treasury entity and the employee of the amounts
collected. If the payment agency is aware that the employee is entitled to payments
from the Civil Service Retirement Fund and Disability Fund, the Federal Employee
Retirement System, or other similar payments, it must provide written notification
to the payment agency responsible for making such payments that the debtor owes a
debt, the amount of the debt, and that the Treasury entity has complied with the
provisions of this section. Treasury entities must submit a properly certified claim
to the new payment agency before the collection can be made.
(2) If the employee is already separated from employment and all payments due from
his or her former payment agency have been made, Treasury entities may request that
money due and payable to the employee from the Civil Service Retirement Fund and
Disability Fund, the Federal Employee Retirement System, or other similar funds, be
administratively offset to collect the debt. Generally, Treasury entities will
collect such monies through the Treasury Offset Program as described in § 5.9(c) of
(3) When an employee transfers to another agency, Treasury entities should resume
collection with the employee's new payment agency in order to
continue salary offset.
Title 31 published on 2012-07-01
no entries appear in the Federal Register after this date.
This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.