Effective Dates: 05/08/2025 - Present Previous | Next

TN 78 (05-25)

GN 02201.031 Collection of Title II Overpayments by Administrative Offset

A. What is the policy for collecting title II overpayments by Administrative Offset?

1. Authority for Administrative Offset

The Domestic Employment Reform Act of 1994 (DERA) authorizes the Social Security Administration (SSA) to collect certain title II debts by Administrative Offset. In addition, the Debt Collection Improvement Act of 1996 (DCIA) gives SSA permanent authority to use administrative offset.

IMPORTANT: In this section, the term “Administrative Offset” refers to the reduction or withholding of Federal or State payments other than tax refunds. Although Tax Refund Offset (TRO) is a type of Administrative Offset, separate TRO procedures regarding title II overpayment debts appear in GN 02201.030.

2. Definition of Administrative Offset

Administrative Offset is the reduction or withholding of federal or state payments to a person to recover a delinquent debt owed by that person to the federal government.

Various federal and state payments, such as travel, expense reimbursements, Office of Personnel Management (OPM) pensions, and federal contractor payments, as well as eligible state payments, which include state income tax refunds, are subject to Administrative Offset to recover certain title II debts.

OPM pensions are subject to a reduction of up to 25% of the net payment.

Vendor payments such as federal contractor payments and travel and expense reimbursements are subject to a reduction of up to 100% of the net payment.

NOTE: For title XVI debts collected by administrative offset of Federal payments, see SI 02220.013.

3. Criteria for Administrative Offset selection

SSA's automated systems select certain title II debts for recovery by Administrative Offset. The following criteria must all apply:

  1. a. 

    The debtor was 18 years or older when the debt was incurred

  2. b. 

    The debt must be “unrecoverable” under regulations determined by the Commissioner of Social Security;

  3. c. 

    The debt must be owed by a person who is no longer entitled to receive Social Security benefits;

  4. d. 

    The debtor must be alive;

  5. e. 

    The debtor's beneficiary own account number (BOAN) must be on the Master Beneficiary Record (MBR);

  6. f. 

    The debt must be $25.00 or more; and

  7. g. 

    The debt must be delinquent (see GN 02201.030B.2 for the definition of “delinquent”).

NOTE: Due to systems limitations, SSA does not select beneficiary identification code (BIC) “C” debtors for Administrative Offset of payments other than Tax Refund Offset (TRO).

B. What is the policy for unrecoverable debt?

1. Definition of unrecoverable debt

SSA considers a title II debt to be unrecoverable if it meets all the following conditions:

  1. a. 

    The Recovery and Collection of Overpayment Process (RECOOP) billing status is past-due or later, or the debt has been written off as uncollectible;

  2. b. 

    SSA has not entered into an installment agreement with the debtor, or the debtor has failed to make any payment for two consecutive months;

  3. c. 

    No appeal/waiver request is pending; and

  4. d. 

    The debtor is a former beneficiary.

2. When a debt is unrecoverable

An SSA debt is unrecoverable when it meets the definition in GN 02201.031B.1. For purposes of the Administrative Offset program, a specific unrecoverable date is not required.

C. What is the process for sending a pre-offset notice?

Once a debt is selected for Administrative Offset, SSA must send the debtor a pre-offset notice. ECO retrieves a verified address for the debtor from an Address Verification Contractor (AVC).

  1. 1. 

    If the AVC provides a good address, then the pre-offset notice is mailed to that address.

  2. 2. 

    If the AVC does not return a good address and the MBR or Supplemental Security Record (SSR) was updated within the last year, the notice is mailed to the address on the MBR or SSR.

  3. 3. 

    If there is no good address from the AVC and the MBR or SSR address was updated more than a year ago, the AVC will be checked again in six months. The pre-offset notice will be mailed once a good address is obtained.

For information on handling undeliverable pre-offset notices, refer to GN 02201.030F in this section.

For more information on the selection , notification, and referral process, refer to GN 02201.029C.

NOTE: The automated address request operation run out of central office is a separate project from the credit bureau address requests made by the Debt Management Systems (DMS). The automated operation has no impact on the DMS requests.

The pre-offset notice tells the debtor about the planned offset action and:

  • •

    They owe a delinquent overpayment debt in a particular amount;

  • •

    That SSA plans to refer the debt to Treasury for TOP and if applicable conduct administrative wage garnishment, and send information about the debt to credit bureaus after 60 days have expired from the date on the notice;

  • •

    SSA will not take this action if, before the end of that 60-day period, the debtor pays the debt in full, makes regular installment payments under an agreement with SSA, requests waiver, or furnishes evidence showing that they do not owe all or part of the stated amount or SSA does not have the right to collect the debt; and

  • •

    The debtor may review and copy SSA's records about the debt.

NOTE: SSA sends one notice to inform the debtor about TOP, TRO, administrative wage garnishment, and credit bureau reporting. The same repayment options and due process rights are offered for all collection tools described in GN 02201.030 in this section.

NOTE: All External Collection Operation (ECO) notices sent November 2015 or later will be stored in the Online Retrieval System (ORS). For all ECO notices sent prior to November 2015 you can view the ECO master query. For additional information on the ECO master query, see MS 01114.007.

D. How must debtor inquiries and protests, pre-offset, be handled?

1. Request for explanation of overpayment

Follow the instructions in GN 02201.030D.1.

2. Request for explanation of Administrative Offset

If a request for an explanation of Administrative Offset is received, explain that as indicated in the pre-offset notice, Congress passed a law that allows Treasury to withhold unrecoverable SSA overpayments from federal and state payments due the overpaid person.

3. Request for waiver

Follow instructions in GN 02201.030D.2.

4. Request to review record

Follow instructions in GN 02201.030D.3.

5. Request for installment payments

Follow instructions in GN 02201.030D.4.

6. Debtor objects to collection of debt

a. Debtor objects to SSA's determination that the debt is past due and legally enforceable and an External Collections review is requested.

Follow instructions in GN 02201.030D.5.a.

b. Debtor protests the fact or amount of debt

Follow instructions in GN 02201.030D.5.b.

7. Debtor alleges non-receipt of overpayment

Follow instructions in GN 02201.030D.6.

8. Debtor makes a compromise offer

Follow the instructions in GN 02215.100 through GN 02215.125. If SSA agrees to the offer, stress that payment must be received by us before the 60-day process period expires or we will report the debt to TOP.

9. Debtor alleges non-receipt of initial overpayment notice

Follow the instructions in GN 02201.030D.8.

10. Report of death

Follow the instructions in GN 02201.030D.9.

11. Report of bankruptcy action

Follow instructions in GN 02201.030D.10.

E. How must post-offset and post-certification inquiries be handled?

SSA will receive some inquiries after certification of cases to Treasury or after actual offset has occurred. In many of these cases, the debtor simply failed to contact us to resolve the repayment issue as specified in the pre-offset notice. There are other situations, however, where certification to Treasury may have been incorrect. This section explains how to handle specific post-offset and post-certification inquiries.

1. Allegation of pending protest or waiver request

Follow instructions in GN 02201.030E.1.

2. Request for waiver

Follow instructions in GN 02201.030E.2.

3. Request for installment payments

Follow instructions in GN 02201.030E.3.

4. Excess collection

Follow instructions in GN 02201.030E.4.

5. Erroneous offset due to incorrect BOAN

Follow instructions in GN 02201.030E.5.

6. Alleged non-receipt of pre-offset notice

Follow instructions in GN 02201.030G.2.

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0202201031
GN 02201.031 - Collection of Title II Overpayments by Administrative Offset - 05/08/2025
Batch run: 05/08/2025
Rev:05/08/2025