Frequently Asked Questions for Federal Agencies
The Debt Collection Improvement Act (DCIA) of 1996 requires any federal agency that is owed a debt that is over 180 days delinquent must notify Treasury of the debt for purposes of administrative offset (withholding). The administrative offset program in Treasury is known as the Treasury Offset Program.
The disbursing officials of Treasury, Defense, Postal Service, Army Corps of Engineers or any other government corporation, or any other disbursing official designated by the Secretary of the Treasury, shall conduct administrative offset.
Treasury works with non-Treasury disbursing officials to match their payments against the Treasury delinquent debtor database in order to offset payments to delinquent debtors.
Yes. It is not necessary for an agency to refer its debts to Treasury for administrative offset, when it may collect the debt through offsetting its own payments.
Federal agency includes executive, judicial and legislative branch agencies, as well as government corporations.
Yes. The DCIA exempts from offset payments made under the tariff laws, and payments made by the Department of Education under Title IV of the Higher Education Act. Certain federal benefit payments, such as Social Security payments, are subject to offset but with certain limitations. Means-tested federal benefit payments will be exempted from offset at the request of the head of the payment certifying agency and other payments may be exempted by Treasury upon request under standards set by Treasury.
A federal agency may adopt the Federal Claims Collection Standards (4 CFR 101-105), when revised, or prescribe its own regulations consistent with the Federal Claims Collection Standards. If agency regulations already published are consistent with the DCIA, no further regulations need to be published by the agency.
Fiscal Service/Treasury is reviewing all federal payment mechanisms to determine their applicability to the offset program.
Administrative offset under the DCIA is precluded only when another law specifically prohibits it. Other legislation authorizing administrative offset does not necessarily prohibit implementing administrative offset under the DCIA.
A debtor who wishes to pay his/her debt voluntarily must pay the creditor agency directly. It is the creditor agency which must instruct Treasury to terminate the offset process with respect to a debt that has been paid. Debtors will be directed to the creditor agency to resolve questions, make voluntary payments, or request any other service related to the debt. The creditor agency will act under its authority to service the claim or debt, and enter into any voluntary arrangement with the debtor.
Treasury will develop a schedule with individual federal agencies for the purpose of establishing a time-table and procedures for referral of debts. Transmission of data will occur using automated media under formats identified by Treasury. Treasury will document the terms of the coordinated offset initiative.
Debts referred/transferred to Treasury or another Debt Collection Center will automatically be referred to the Treasury Offset Program by Treasury or the Debt Collection Center servicing the debt. In this case, Treasury or the Debt Collection Center will be responsible for complying with all requirements of the Treasury Offset Program on behalf of the creditor agency.
Yes. Under the administrative offset program, Treasury may collect the fee directly from the debtor. The creditor agency is responsible for adding the offset fee to the debt as a cost of collection.
The DCIA does not specifically provide for a collection fee to be assessed by non-Treasury disbursing officials. However, the DCIA authorizes Treasury to charge a fee sufficient to cover the full cost of implementing administrative offset, including mandatory administrative offset by non-Treasury disbursing officials. Fees charged by Treasury must be deposited into the DCIA account. These fees are then available to cover costs associated with implementation and operation of government debt collection activities. Treasury/Fiscal Service could enter into an interagency agreement to obtain the services required by law from the non-Treasury disbursing officials and to reimburse them for their costs.
If a voluntary payment is misdirected to Treasury as a result of an intent to offset notice, the full amount of the payment will be forwarded to the appropriate creditor agency. Treasury will deduct the offset fee only when it has completed an actual offset.
Last modified 05/02/18