TN 3 (05-09)

GN 02820.070 Economic Recovery Payments (ERP) and Treasury Offset Program (TOP) Offset

A. Policy for offset of Economic Recovery Payments

1. Authority

The American Recovery and Reinvestment Act of 2009 (ARRA) (Public Law 111-5) enacted February 17, 2009, authorized the Social Security Administration (SSA), Railroad Retirement Board (RRB), or Veterans Administration (VA) to disburse a one-time payment of $250. SSA will issue payments to SSA beneficiaries and Supplemental Security Income (SSI) recipients. Beneficiaries/recipients who were eligible for SSA/SSI benefits for any of the 3 months prior to the month of enactment (i.e., November 2008, December 2008, and January 2009) may receive the one-time payment. If beneficiaries/recipients receive both SSA and SSI, they will receive only one payment of $250.

ARRA also authorized the offset of these payments to collect delinquent debts owed to state/Federal government agencies.

2. Description of the offset of the ERPs

The $250 one-time payment is subject to offset by the Department of Treasury (DT) under the Treasury Offset Program (TOP). The offset of the ERP will be used to collect delinquent debts owed to state/Federal government agencies.

The offset, which applies to both the SSA beneficiaries’ and SSI recipients’ ERP, is an automated process performed by the DT’s Financial Management Service (FMS).

When an offset occurs, TOP notifies the beneficiary/recipient by the payment date and sends the offset funds to the agency where the debt is owed (known as the creditor agency). For more information on how the debtor is notified see GN 02820.070C.2. in this section. FMS notifies SSA that the payment was offset. The offset of the ERP could be a full offset or partial offset. For more information about ERPs subject to offset, see GN 02820.070E.l. in this section.

3. Offset of an ERP to satisfy a delinquent Title II or Title XVI Debt

ERPs issued by RRB and VA may be subject to administrative offset to collect a delinquent Title II or Title XVI debt owed to SSA. In addition, in some cases ERPs issued by SSA to Title II or Title XVI beneficiaries will be offset to satisfy a delinquent Title II or Title XVI debt that is active in TOP.

For example, if a beneficiary is entitled to receive an ERP based on his/her current entitlement to Title II benefits, but he/she was previously entitled to Title XVI benefits and overpaid on that account, his/her ERP may be offset to collect the delinquent Title XVI overpayment, if the debt is not being recovered through cross program recovery and is active in TOP. This could also be the case for a beneficiary receiving an ERP based on his/her current entitlement to Title XVI benefits, previously entitled to Title II benefits.

If SSA is the creditor agency see the Administrative Offset instructions at GN 02201.029 or SI 02220.013.

4. Debt priorities

It is possible for one person to owe more than one debt to a state/Federal agency or agencies. When more than one debt is submitted for the same debtor, TOP applies funds collected in accordance with priorities set by statute and policy. If a debtor has two or more debts of the same priority, TOP applies funds to the oldest debt first.

5. Reduction of ERP is not appealable to SSA

The offset of an ERP is not appealable to SSA if another agency is listed as the creditor agency. If SSA is listed as the creditor agency, see GN 02201.029 or SI 02220.013. If the offset occurred as a result of a debt that was owed to another state/Federal agency, the beneficiary/recipient should discuss any appeal rights with that creditor agency directly.

Additionally, if SSA is not the creditor agency, we can only redirect a beneficiary/recipient who wants to appeal to the creditor agency listed on the notice of offset stored in the Online Retrieval System (ORS). For procedures for handling inquiries about offset of ERPs, see GN 02820.070F. in this section.

6. Hardship requests

Redirect any request for relief due to hardship to the creditor agency. SSA is not authorized to stop or delay the collection of another agency’s debt. Do not issue any special payments, such as critical payments, to pay back money that was offset.

7. Excess collections due to offset

In some cases, the offset of the ERP may result in an excess collection. An excess collection can occur when a beneficiary/recipient fully repays the debt owed to an agency and, due to systems timing, TOP could not stop the offset.

It is not SSA’s responsibility to refund the excess collection. It is the responsibility of the creditor agency to refund any excess collections to the beneficiary/recipient. Do not make any special payments, such as critical payments, to pay back any ERP money that was offset.

B. SSA’s ERP process

1. SSA certifies ERPs without regard to TOP offset

SSA certifies the ERPs to the DT. We do not check for delinquent debts that are owed to other state/Federal agencies, and we do not determine the amount of the offset. After SSA certifies the ERPs, TOP identifies the existence of any state/Federal debt owed by any beneficiary/recipient, and determines whether the offset applies.

2. SSA sends ERP payment files to FMS

SSA sends the ERP payment files to FMS. These files contain data about the beneficiary/recipient and the payment that FMS uses in its automated processes to conduct the offset. This data includes, but is not limited to, the amount of the ERP and the beneficiary’s/recipient’s own account number (BOAN).

3. SSA’s post-offset claims process

Post-offset claims (i.e., nonreceipt, nonentitlement) involving ERPs that were offset are handled differently because these payments are not benefit payments. See:

  • GN 02820.051 for returned checks/electronic funds transfer of ERPs;

  • GN 02820.052 for nonreceipt of ERPs/potential double-check negotiations; and

  • GN 02820.053 for ERP stop payments, reclamations, and limited payability.

C. FMS’ ERP offset process

1. FMS matches ERP payment records with debts owed to state/Federal agencies

FMS uses TOP to conduct the offset of the ERPs.

When TOP matches the beneficiary’s/recipient’s identifying information (BOAN and name control) with the information from the debts owed to state/Federal agencies, it checks for all of the criteria that allow an offset to be taken from the ERP.

If TOP determines that an offset is appropriate, TOP

  • reduces the payment, or

  • notifies the debtor of the offset, and

  • sends the funds to the agency that is owed the debt (the creditor agency).

2. FMS notifies debtors

TOP will not send warning or advance notice of possible offset of the ERPs to the beneficiary/recipient. However, TOP does send a notice of offset that tells the debtor that the ERP was reduced or completely withheld as payment toward another state/Federal Government agency’s debt. TOP sends the notice in time to be in the hands of the beneficiary/recipient by the payment date.

The FMS notice of offset includes the following information:

  • the name, address, and telephone number of the creditor agency;

  • the name, address, SSN, and creditor agency account number of the person whose ERP was offset; and

  • the amount of the reduction.

In some cases, beneficiaries/recipients will contact SSA. For handling inquiries about offset of ERPs, see GN 02820.070F. in this section.

IMPORTANT: Due process notices (i.e., notices to the debtor describing his or her appeal rights) regarding the delinquent debt are the responsibility of the creditor agency. The creditor agency sends due process notices to the debtor before sending information on the delinquent debt to TOP for collection.

3. FMS determines the offset amount

TOP automatically determines the offset amount. The offset could be a full offset or a partial offset.

4. FMS notifies SSA about the offset

a. FMS notice of offset files

FMS sends files of the notices of offset to SSA prior to sending them to debtors. Copies of these notices are available on ORS, and are posted to ORS on or before the ERP payment date. For more information about accessing copies of the notice of offset on ORS, see GN 02820.070E. in this section.

b. Weekly offset data files

On a weekly basis, FMS sends offset data files to SSA’s central office for processing. The files are sent electronically, no later than 48 hours prior to the payment date. Although the offset data file cannot be read or accessed by SSA’s employees, offset information can be obtained from:

  • Economic Recovery Listing Query (ERLQ), which can be accessed via http://erl.ba.ssa.gov/ (for instructions, see MSOM INTRANET 001.002); and either the

  • Payment History Update System (PHUS), see SM 00630.341, or

  • Payment History Section (PMTH) of the SSID, see SM 01601.835.

5. FMS sends debt collection to creditor agency

FMS sends the offset amount (i.e., the debt collection) to the creditor agency.

6. FMS processes reversals

A reversal is the act of taking back offset amounts from the creditor agency. FMS performs reversals automatically. Reversals are done when the original payment is not due and offset is not applicable. For example, offset actions are reversed when notification is received that a beneficiary/recipient is deceased.

D. ERP offset of unusual cases

You should be aware that some unusual cases can occur in the TOP process for offset of ERPs. While the circumstances are rare, they might be confusing to the beneficiary/recipient. You need to know how they are processed, so you can identify them when a beneficiary/recipient inquires about the case.

1. Debt priorities

To control cases with multiple debts, FMS established debt priorities. If a beneficiary/recipient has two debts of the same priority, FMS policy is to collect the oldest one first. After the oldest debt has been fully recovered, FMS will offset any remaining ERP balance to collect the next debt.

2. Multiple debts in low amounts

A debtor may owe multiple debts to state/Federal agencies, and all the debts are of relatively low amounts. For instance, the debtor may owe $40 to the Small Business Administration, $40 to the Department of Defense, and $30 to the Department of Agriculture. If enough money is available from the ERP to collect these debts, FMS offsets the ERP to collect all the debts.

In this case, only one offset notice is generated, containing detailed information on each creditor agency. For more information about accessing copies of the FMS notices of offset on ORS, see GN 02820.070E in this section.

If you receive an inquiry from a beneficiary/recipient who has questions about this situation, refer to GN 02820.070F.10. in this section.

E. Accessing specific information about ERPs subject to offset

1. Information from SSA systems

You can find specific information about the offset of an ERP on ORS. ORS contains electronic images of the FMS notices of offset. The FMS notices of offset show the information listed in GN 02820.070C.2. in this section.

You can access ORS using this link: http://orsstd.sspf.ssa.gov/orsstd .

In addition, the PHUS and the SSID show limited information about the offset. The PHUS shows a new unique event code of 141 that indicates either a partial or full offset occurred (see SM 00630.341). The SSID displays an “O” in pay flag 5 that indicates either a partial or full offset occurred (see SM 01601.835). Below are examples of what will be displayed on the SSID and PHUS.

PHUS Record

Non Offset Economic Recovery Payment

        

PERSON    BIC-A

INDCTR    RETURN TO MBR- 06/09

TRANS   RPD-05/07/09    COM-05/09     SC-ZE    ECONOMIC RECOVERY PYMT

       EVNT-209 ERP PMT    AMT-$ 250.00  ERP-PMT-RPD- 05/07/09   ETD-05/09

              

Partial ($100.00) Offset Applied

            

PERSON     BIC-A

INDCTR     RETURN TO MBR- 06/09

TRANS   RPD-05/07/09     COM-05/09     SC-ZE        ECONOMIC

RECOVERY PYMT

      EVNT-209  ERP  PMT    AMT-$  250.00   ERP-PMT-RPD- 05/07/09   ETD-05/09

TRANS     RPD-05/26/09     COM-05/09      SC-ZT         PHUS-TOP OFFSET

      EVNT-141  ERP-TOP    AMT-$   100.00          ETD-05/09

Full ($250.00) Offset Applied

    

PERSON        BIC-A

INDCTR        RETURN TO MBR- 06/09

TRANS RPD-05/07/09 COM-05/09 SC-ZE ECONOMIC RECOVERY PYMT

       EVNT-209 ERP PMT AMT-$ 250.00 ERP-PMT-RPD- 05/07/09 ETD-05/09

    TRANS RPD-05/26/09 COM-05/09 SC-ZT PHUS-TOP OFFSET

       EVNT-141 ERP-TOP AMT-$ 250.00 ETD-05/09

       

SSID Record

Non Offset Economic Recovery Payment

PMTH       1  2       3   5       FMA         SMA

      

05/10/09     4  0509  4  E      250.00       0.00

05/10/09     4  N       4  E      250.00       0.00

      

Partial ($100.00) Offset Applied

      

PMTH       1  2     3   5     FMA         SMA

    

05/10/09    4  0509  4  E    150.00       0.00

05/10/09    4  0509  4  O    100.00       0.00

05/10/09    4  N       4   E    250.00       0.00

         

Full ($250.00) Offset Applied

          

PMTH       1         2         3     5     FMA         SMA

        

05/10/09      4         0509    4     E    0.00          0.00

05/10/09      4        0509    4     O  250.00         0.00

05/10/09      4         N        4      E  250.00        0.00

2. Retrieving copies of the FMS notice of offset on ORS

You should retrieve a copy of the FMS notice of offset only when you need specific information about the offset of the ERP as it affects a beneficiary/recipient. This includes situations such as handling inquiries from a beneficiary/recipient subject to offset. For more information about handling inquiries, see GN 02820.070F in this section.

In most cases, the beneficiary/recipient asks questions about the offset that should be answered by the creditor agency. Since the FMS notice of offset that is stored on ORS identifies the creditor agency and its contact information, you should retrieve a copy of the notice from ORS for that information. If the beneficiary’s/recipient’s question should be answered by the creditor agency, redirect him or her to that agency.

IMPORTANT: Do not print and give the beneficiary/recipient a copy of the offset notice. If you have printed a copy of the offset notice, you must ensure that the copy is destroyed.

F. Procedures for handling inquiries about offset of ERPs

Follow these procedures if a beneficiary/recipient makes an inquiry --

1. Requesting general information about the offset

Some people who receive the FMS notice of offset may contact SSA with questions about the offset; particularly those SSI recipients who are not familiar with the offset. If the question is general, provide the following information about the offset process:

  • TOP is an offset process run by FMS;

  • Offset is provided for in the ARRA;

  • ERPs and certain other Federal payments may be offset by TOP to collect a delinquent debt owed by the beneficiary/recipient to another state/Federal agency; and

  • SSA has no control over whether TOP performs the offset.

If the beneficiary/recipient wants more information about the offset, he or she should contact the creditor agency. The creditor agency can answer his or her questions.

2. Requesting information about the debt owed to the creditor agency

The FMS notice of offset refers to the debt owed by the beneficiary/recipient to another state/Federal agency. When a beneficiary/recipient asks us for information about the debt owed to another agency, tell him or her that:

  • we do not have any specific information about the debt, such as the amount or the reason for the debt; and

  • the only information we have about the debt is shown on the notice of offset (name, address, and telephone number of the agency).

Provide that information to the beneficiary/recipient if he or she requests it and tell him or her to contact the agency shown on the FMS notice of offset for additional information about the debt.

3. Protesting offset of the ERP

When TOP offsets an ERP, determine the creditor agency. If SSA is the creditor agency, refer to GN 02201.029 or SI 02220.013 for instructions on handling protests. If another agency is listed as the creditor agency, the offset is not based on an SSA initial determination subject to appeal rights. Inform the debtor:

  • that we cannot accept a formal request for an appeal of the TOP offset;

  • the name, address, and telephone number of the creditor agency shown on the notice of offset; and

  • that he or she must contact the agency that is owed the debt to discuss any further appeal rights.

IMPORTANT: Do not accept any formal appeal, such as a Form SSA-561.

4. Alleging not owing the debt

When a beneficiary/recipient alleges that he or she already paid the debt or is not the individual who owes the debt, tell him or her:

  • the creditor agency determines who owes delinquent debts and who is liable for the repayment;

  • SSA is not authorized to decide on behalf of the creditor agency that a beneficiary/recipient does or does not owe a debt subject to offset;

  • the name, address, and telephone number of the creditor agency; and

  • that he or she must contact the agency that is owed the debt to discuss the liability for the debt.

IMPORTANT: Do not make any special payments such as critical payments to pay back money that was offset. The creditor agency is responsible for paying back money, when appropriate.

5. Challenging the amount of offset

If a beneficiary/recipient believes the amount withheld from his ERP payment by TOP is incorrect, tell him or her:

  • FMS is responsible for determining the amount withheld from the ERP; and

  • he or she must contact the creditor agency to discuss the offset in more detail.

IMPORTANT: Do not make any special payments such as critical payments to pay back money that was offset. The creditor agency is responsible for paying back money.

6. Requesting relief from offset due to hardship

Due to alleged hardship, beneficiaries/recipients might request SSA to prevent the offset from occurring or to refund the money that has already been withheld from their ERP. When a request for relief from offset due to hardship is made, tell the requester:

  • the offset is done by FMS at the request of the agency that is owed the money;

  • we cannot take any action to stop the offset or to refund any money that has already been withheld;

  • any money that has been withheld is in the possession of the creditor agency; and

  • he or she must contact the creditor agency regarding the request for relief from offset due to hardship.

If the beneficiary/recipient requests any of the contact information for the creditor agency (name, address, or telephone number), provide the information from the FMS notice of offset.

7. Alleging not receiving the FMS notice of offset

If the beneficiary/recipient alleges not receiving the FMS notice of offset, tell him or her:

  • FMS is responsible for mailing the notices of offset to the person subject to offset; and

  • he or she must contact the creditor agency for more information.

IMPORTANT: Do not print and give the beneficiary/recipient a copy of the offset notice. If you have printed a copy of the offset notice, you must ensure that the copy is destroyed.

8. Requesting to repay the debt to SSA instead of to the creditor

When a beneficiary/recipient approaches SSA in the mistaken belief that he or she can repay another agency by paying SSA, tell him or her that:

  • the debt is owed to another agency and payment is a matter between the beneficiary/recipient and the agency that is owed the debt; and

  • we cannot accept payment on behalf of that agency.

Provide the name, address, and telephone number of that agency upon request.

IMPORTANT: Under no circumstances should you accept a payment for a debt owed to another state/Federal agency.

9. Alleging nonreceipt of an ERP that was offset

Nonreceipt claims involving ERPs are handled differently because these payments are not benefit payments. Process the nonreceipt claim according to instructions in GN 02820.052

NOTE: Do not process a nonreceipt if full offset was applied.

10. Requesting an explanation of offset of multiple debts

The unusual offset cases described in GN 02820.070D. in this section may prove to be difficult for beneficiaries to understand. Since FMS carries out the rules for conducting offsets for multiple debts with different priorities, they are in the best position to handle these inquiries. When a beneficiary/recipient asks SSA for information about multiple debts and debt priorities, tell the beneficiary/recipient:

  • TOP is a debt collection process run by FMS; and

  • SSA has no control over how FMS performs the offsets or how it determines debt priorities.

If a beneficiary/recipient wants more information about how offsets are handled for multiple debts or how debt priorities are determined, the person should contact the TOP Call Center at 1-800-304-3107. The TOP Call Center employees are trained to answer TOP questions.

11. Requesting waiver of the debt owed to the creditor agency

If a beneficiary/recipient asks about requesting waiver of the debt owed to another agency, tell him or her:

  • the debt is not owed to SSA;

  • we cannot accept a waiver request regarding the debt owed to another agency; and

  • he or she must contact the creditor agency regarding fault in causing the debt and ability to repay the debt.

IMPORTANT: Do not accept a waiver request (SSA-632BK or equivalent form) on a debt owed to another agency. If a beneficiary/recipient sends a waiver request to SSA or otherwise insists on making a waiver request on a debt owed to another agency, do not process the waiver request (for instructions, see When a Waiver Determination Will Not Be Made GN 02250.305).

12. Alleging bankruptcy

If the beneficiary/recipient alleges bankruptcy, tell him or her:

  • the offset is done at the request of the agency that is owed the money;

  • SSA cannot take any action to stop the offset or to refund any money that has already been withheld;

  • any money that has been withheld is in the possession of the creditor agency; and

  • he or she must contact the creditor agency to discuss further options.

G. References

  • GN 02201.029 - The Treasury Offset Program (TOP)

  • SI 02220.013 - Collection of Title XVI Overpayments by Administrative Offset

  • GN 02820.051 - Return Check and Electronic Funds Transfer of ERPs

  • GN 02820.052 - Nonreceipt of ERPs/Potential Double Check Negotiations

  • GN 02820.053 - ERP Stop Payments, Reclamations and Limited Payability

  • MSOM INTRANET 001.002

  • SM 00630.341 - Event 141 ERP-TOP

  • SM 01601.