The Debt Collection Improvement Act of 1996 (DCIA, P.L. 104-134) provided for the establishment of TOP. For a detailed description of the TOP process, see GN 02201.029.

Section 3720A of 31 USC permits the Social Security Administration (SSA) to recover delinquent Title XVI overpayments from former recipients by offsetting their federal income tax refunds. The Foster Care Independence Act of 1999 (FCIA) authorizes the collection of delinquent Title XVI debts by administrative offset. For the new Title XVI policy on administrative offset, see SI 02220.013.

Selection of debts for recovery by TRO is made by the system each week from the Supplemental Security Record (SSR) and Numident records. All of the following criteria must apply:

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  The debtor is alive;

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  The debtor is not eligible for Supplemental Security Income (SSI) benefits;

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  The debtor was at least 18 years old when the debt was established on SSA's records;

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  The debt is $25 or more;

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  The debtor is not making regular installment payments, or efforts to recover the debt have terminated;

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  The debt is past-due, and

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  The debt is legally enforceable.

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

a. Notice issuance

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

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  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.

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  If there is not 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 SI 02220.012F in this section.

Refer to GN 02201.029C for more information on the selection, notification, and referral process.

b. Notice information

The notice informs the debtor of the planned offset action and:

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  They owe a delinquent debt for a specified amount;

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  SSA plans to

  • –

    refer the debt to Treasury for TRO,

  • –

    if applicable,

    • •

      administrative offset,

    • •

      conduct administrative wage garnishment, and

  • –

    send information about the debt to credit bureaus after 60 days have expired from the date on the notice;

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  SSA will not take this action if, before the end of that 60-day period, the debtor:

  • –

    pays the debt in full,

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    makes regular installment payments under an agreement with SSA,

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    requests waiver, or

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    furnishes evidence showing

    • •

      they do not owe all or part of the stated amount, or

    • •

      SSA does not have the right to collect debt.

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

For SSA TRO purposes, a past-due debt is one on which:

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  Payment is delinquent; and

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  No appeal or waiver request is pending.

A debt is delinquent on the later of the following dates:

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  The 60th day after the initial overpayment notice date; or

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  The date on which a decision on a protest (i.e. appeal or waiver request) is made.

If a request for an explanation of the overpayment is received, use the SSID to provide an explanation of the overpayment. Keep explanations generic to the extent possible. For example: "You were no longer disabled as of 05/24 and continued to receive checks through 12/2."

a. General response

If a request for an explanation of TRO is received, explain the following:

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  Congress passed a law which allows Treasury to withhold delinquent overpayments from federal payments, including income tax refunds, due the overpaid person.

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  The pre-offset notice also contains an explanation of TRO.

No systems input is needed to document the request for explanation of TRO or other external collections (ECO) tools

b. Specific debt response

If the debtor ask for an explanation of a delinquent or legally enforceable debt, see SI 02220.012B and SI 02220.012C in this section.

If a request for waiver is received,

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  Obtain an SSA-632-BK in accordance with current instructions in GN 02250.001 and GN 02250.002.

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  Advise the debtor that TRO remains in effect until SSA received a completed and signed SSA-632-BK (or its equivalent).

When the signed form (or other request) is received

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  Input the waiver request via the Direct SSR Update Waiver (UOWV) screen (see MS 00304.009and SM 01311.423).

Do not delay recording the request once written documentation is received. Process in accordance with GN 02250.002.

In all situations, the FO will attempt to satisfy the review request without the need to obtain the paper claims folder. However, if the debtor wishes to review the folder you must obtain it (for SSI folder recall, see SM 01201.205).

If the debtor ask to review records:

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  In person at the FO - obtain all systems queries and explain what the queries show.

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  By telephone to the FO - set up an appointment for a review of the queries. Schedule the appointment well in advance of the 60-day time limit; emphasize the debtor must submit evidence.

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  To a PC or TSC - advise the FO, via a priority MDW, to contact the debtor to set up an appointment. Annotate the MDW accordingly, "Urgent-TOP/Credit Bureau Case."

If the FO has not conducted a folder review before due process has expired, add EXPLANATION OF OVERPAYMENT on the Update Sequence Data (UOSD) screen in Direct SSR Update until the necessary review of the record is complete, see MS 00304.006.

If the debtor wants to repay the debt by monthly installments, to negotiate a reasonable monthly payment amount follow SI 02220.025B.2.

Advise the debtor the debt of the following:

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  The debt will remain eligible for TRO until the first payment is received;

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  The debt will not be referred to TRO as long as payments are made according the agreement.

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  Send the installment payment to:

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    pay online using the information provided in the pre-offset notice, or

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    the address shown on the Payment Stub form attached to the pre-offset notice, or

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    as a last resort, the remittance address (MATPSC, P. O. Box 3430, Philadelphia, PA 19122-9985) if the debtor does not have the form.

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  Record the name and claim number on the remittance payment to ensure proper posting for the beneficiary.

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  Upon default of one or more installment payments, the debt will be referred to Treasury for collection, where it will remain until the debt is satisfied.

The debtor may subsequently offer to resume regular installment payments. The payments will be accepted and applied towards the debt, but TRO will not be deactivated until the debt is paid in full.

For instructions on adding the installment agreement G TAC, on the SSR, see SI 02220.025B.2,SM 01311.235, and MS 00304.008).

A debtor may object to collection of the debt for two reasons:

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  They object to SSA's determination the debt is past due and legally enforceable.

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  They protest the fact or amount of debt.

If a debtor objects to collection of the debt, follow these procedures:

If a debtor alleges non-receipt of the overpayment check(s) or direct deposit payment(s), obtain an SSID query or Q query.

If the query shows no record of non-receipt of the payment(s) in question, proceed as follows:

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  If the debtor had a representative payee, explain that we sent the payment(s) to the payee and there is no indication the payee did not receive the payment(s).

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  If there was no representative payee, explain that our records did not show any evidence of a non-receipt allegation at the time the initial overpayment notice was sent.

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  If the debtor insists that we provide a photocopy of the check(s) in question,

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    Explain that we will investigate but our system will refer the debt to Treasury for offset.

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    We will repay any erroneous offset if our investigation supports the non-receipt allegation.

  To process the non-receipt allegation for a check follow GN 02406.130 and for a direct deposit payment GN 02406.007. DO NOT MAKE a suspend billing code input.

  If the date of the alleged missing check is more than 12 months in the past, see GN 02401.901 through GN 02401.920 for processing limited payability non-receipt cases.

If the debtor makes a compromise offer, process in accordance with existing instructions in SI 02220.030 and sensitive instructions SI 02220.031.

If SSA agrees to the offer, stress that payment must be received by us before the 60-day due process period expires or we will report the debt to TOP.

If a debtor alleges never receiving the initial overpayment notice, proceed as follows:

For a report of death, follow this procedure:

If the debtor alleges a bankruptcy petition is pending or the debt was discharged in bankruptcy, obtain a copy of the petition or discharge order.

1. a. 

   Pending bankruptcy petition

   • •

     Input the allegation via the UOSD screen (see MS 00304.006 and SM 01311.421) selecting BANKRUPTCY DECISION PENDING (and the system will build a suspend billing indicator of L).

   • •

     Process the petition or discharge order in accordance with SI 02220.040.

2. b. 

   Bankruptcy discharge

   Review a copy of the discharge to confirm the SSA debt has been discharged,

   If YES:

   • •

     Select CHANGE on the Add/Change/Delete UODC screen in Direct SSR Update (see MS 00304.007).

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     Change the decision, if present, to an UNCOLLECTABLE (see MS 00304.008) (N/NT TAC) decision to prevent any further collection activity (see SM 01311.280).

   If a suspend billing code is present, delete the suspend billing code using the UOSD screen (see MS 00304.006).

   If NO:

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     The SSA debt is not listed on the discharge. Make no system input.

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     Process the case in accordance with SI 02220.040.

If a debtor alleges they filed a protest or requested waiver but never received a decision, proceed as follows.

Obtain an SSID query.

1. a. 

   If there is a pending waiver, an appeals code or suspend billing code posted, but no decision made and released, a determination must be completed (see SI 04070.010B)

   Follow these steps:

   Step 1 - address the refund.

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     Refund any amount offset by Treasury via A-OTP (see SM 01901.001). This is known as an Agency Refund.

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     Notify Treasury of the refund.

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     Input the Agency Refund using the Correct Offset Amount (TRCA) screen by

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       accessing the Debt Management Menu (DMMU)

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       selecting function number12-Treasury Offset Menu (TRMU) screen (see MS 01114.005).

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     Resolve the overpayment caused by the A-OTP with a Z TAC by

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       completing the UOPD on the Direct SSR Update screen, and

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       for a terminated record, select INCORRECT OVERPAYMENT;

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       for payment status N, select UNCOLLECTIBLE to post an N TAC (see MS 00304.008).

   Step 2 - Develop the missing protest by looking for:

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     an SSA-632-BK,

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     a letter from the debtor or their representative, or

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     a Form SSA-795 in FO records or in the claims folder (see SM 01201.205 through SM 01201.235 for SSI folder retrieval instructions).

   Step 3 - Process the waiver or protest in accordance with GN 02250.002.

   If the waiver is approved, see MS 00304.007G and MS 00304.007H and:

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     change the waiver request to a waiver approval by completing the Direct SSR Update Waiver (UOWV) screen and

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     delete the suspend billing code, if present.

   If the waiver is not approved:

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     Document the waiver denial by changing the waiver request to a waiver denial by completing the UOWV screen (see MS 00304.009).

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     Request a refunds of the overpayment.

   If the debtor cannot refund the overpayment, request the debtor make installment payments.

   If the debtor cannot make installment payments, add a DB or DC TAC by selecting UNWILLING/UNABLE TO REPAY decision on the UOPD screen (see MS 00304.008).

   IMPORTANT: The FO processes all TRO refunds via Automated One Time Payment (A-OTP) (see SM 01901.001).

2. b. 

   If the waiver was previously denied as an unfavorable reconsideration or waiver decision:

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     Advise the debtor that since the issue is resolved, TRO was appropriate.

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     Provide debtor with a copy of the waiver decision, if requested.

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     Do not refund any amounts offset by Treasury.

3. c. 

   If there are no records available but the debtor still indicates a prior protest was filed,

   Develop the allegation by looking for an unprocessed SSA-632-BK, letter or SSA-795 in FO records or in the claims folder.

   • •

     If found, follow SI 02220.012E.1.a.

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     If none found, advise the debtor the TRO was appropriate and do not refund any amounts offset by Treasury.

1. a. 

   If a request for waiver is received, proceed as follows:

   • •

     Obtain an SSA-632-BK in accordance with current instructions in GN 02250.002.

   • •

     Input the request for waiver by completing the UOWV screen in Direct SSR Update (see MS 00304.009).

2. b. 

   If TRO recouped the entire debt (i.e., the debt balance is zero), proceed as follows:

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     Follow GN 02250.002 to process the waiver.

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     Consider a waiver on the entire overpayment amount during development.

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     Advise the debtor that refund of the amount offset will be made only if the waiver is approved.

   • •

     If the waiver is approved (partially or fully), process the refund as in SI 02220.012E.1 in this section.

   • •

     Request the DMS PC to remove the refund from the SSR, if necessary.

3. c. 

   If TRO partially recouped the debt, proceed as follows:

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     Consider waiver on the full overpayment amount.

   • •

     Follow GN 02250.002 to process the waiver.

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     Refund any paid amount due via A-OTP if waiver is approved (partially or fully). Refund any amount offset by Treasury. Process the refund as in SI 02220.012E.1 in this section.

   • •

     Request the DMS PC to remove the refund from the SSR, if necessary.

When a request for installment payments is received, proceed as follows:

1. a. 

   If an installment agreement was negotiated prior to certification and payment was made in accordance with that agreement but Treasury offset still occurred, proceed as follows:

   • •

     Refund any amount offset by Treasury via A-OTP (see SM 01901.001). This is known as an Agency Refund and we must notify Treasury about the refund. Input the Agency Refund using the Correct Offset Amount (TRCA) screen which is requested from the Debt Management Menu (DMMU) function number 12-Treasury Offset Menu (TRMU) screen (see MS 01114.005).

   • •

     Resolve the overpayment caused by the A-OTP. Complete the Direct SSR Input Overpayment Decisions (UOPD) screen by selecting INCORRECT OVERPAYMENT (Z TAC for terminated records) or UNCOLLECTIBLE (N TAC for RIC G records). See MS 00304.008.

   • •

     Request the DMS PC to remove the refund from the SSR, if necessary.

   • •

     Add an installment agreement decision (G TAC) by completing the UOPD screen selecting RECOVER BY INSTALLMENTS. (See MS 00304.008)

2. b. 

   If the request is made after certification, proceed as follows:

   • •

     Establish the agreement on the SSID per SI 02220.025.

   • •

     Advise the debtor that the debt will remain in TRO until it is completely recovered. Explain that SSA will not refund any offset amount paid (unless excess collection, see SI 2220.012F.6)

Excess collections occur when the total amount of voluntary payments and offsets exceed the debt amount (see SM 01310.415 and SM 01310.420). For example, when a certified debtor enters into an installment agreement and fully refunds the debt after certification, an excess collection would occur if Treasury offset for the full amount of the debt. This causes the system to compute an excess decision (see SM 01311.634).

Refund the excess collection to the TRO debtor using existing instructions for A-OTP (see SM 01901.001).

• •

  If the offset caused the excess collection, process the refund as in SI 02220.012E.1 in this section.

• •

  If the voluntary remittance caused the excess collection, repay the excess to the debtor but Do Not Input an Agency Refund.

Request the DMS PC to remove the refund from the SSR, if necessary.

When couples file joint tax returns and the party who is not an SSA debtor wants to receive their portion of the refund, advise the person to the local IRS office at 1-800-829-1040. This is known as an “injured spouse claim” which IRS alone can adjudicate. Advise that any refund must be made by IRS, not SSA.

No systems input is necessary.

If the debtor alleges a bankruptcy petition is pending or the debt was discharged in bankruptcy:

• •

  obtain a copy of the petition or discharge the order.

• •

  Input the allegation via the UOPD screen (see MS 00304.008 and SM 01311.220) selecting BANKRUPTCY to post a MS TAC to the SSR.

• •

  Process the petition or discharge order in accordance with SI 02220.040.

If the debtor alleges the debt has been discharged in a bankruptcy judgement, ask the debtor to submit a copy of the discharge. Process as follows:

If the SSA debt has been discharged,

• •

  select CHANGE on the Add/Change/Delete UODC screen in Direct SSR Update (see MS 00304.007)

• •

  change the decision (including MS TAC) if present, to a UNCOLLECTIBLE (see MS 00304.008) (N TAC) decision to prevent any further collection activity (see SM 01311.280). If a MS TAC is present, change the MS TAC to an N TAC to prevent further collection activity.

If the SSA debt is not listed on the discharge, process the case in accordance with SI 02220.040.

A debtor contacted us in September and provided documents they believed to prove the debt does not exist. In November, the FO advised them that their case was reviewed, and the overpayment does exist. The debtor has taken no further action until contacting us in early February to say their rapid refund was refused.

Explain that our referral to Treasury for collection was proper. If there is a balance after the Treasury offset and the debtor now wishes to pay that balance via full refund or negotiate an installment agreement, we will accept it. We will not return the offset funds to the debtor unless the total repaid funds exceed the amount of the overpayment, or the debtor requests waiver which is subsequently approved.