TN 42 (05-19)

GN 02201.031 Collection of Title II Overpayments by Administrative Offset

A. Policy - General

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, travel and expense reimbursements are subject to a reduction of up to 100% of the net payment.

NOTE: See SI 02220.013 for Title XVI debts collected by administrative offset of Federal payments.

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 debt must have been paid to a person after that person attained 18 years of age;

  2. b. 

    The debt must be considered to 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 refunds. SSA does, however, select BIC “C" debtors for TRO administrative offset.

B. Policy - Unrecoverable Debt

1. Definition of unrecoverable debt

SSA considers a Title II debt to be unrecoverable if it meets all of 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; and

  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. Process - Pre-offset Notice

Once a debt is selected for administrative offset, SSA sends the debtor a notice using the debtor's address of record from the MBR and the supplemental Security Record (SSR). If the MBR/SSR does not have an address or if the notice is returned as undeliverable based on the MBR/SSR address, then the TOP (Treasury Offset Program) system will get any available address from the credit bureau via an automated address request operation run out of central office. If the credit bureau provides a new address, SSA will mail the pre-offset notice using that address. If the credit bureau does not provide a new address, then the case will be deleted from TOP.

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:

  • That he or she owes a delinquent overpayment debt in a particular amount;

  • That SSA plans to refer the debt to Treasury for TRO/TOP, refer the debt to TOP/External Collection Operation (ECO), and/or send information about the debt to credit bureaus after 60 days have expired from the date on the notice;

  • That 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 he or she does not owe all or part of the stated amount or SSA does not have the right to collect the debt; and

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

NOTE: SSA uses one notice to inform the debtor about the proposed administrative offset, TRO, and credit bureau reporting. The same due process rights described above are offered for all collection tools.

D. Procedure - Handling Debtor Inquiries/Protests - Pre-Offset

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. Protest involves request for review of the debt or the legality of collection

If the debtor alleges that he or she does not owe all or part of the debt or that SSA has no legal right to collect the debt, advise that if he or she wishes us to review the findings before we refer the debt to Treasury, we must receive evidence to support the allegations within 60 days from the date of the pre-offset notice. Follow GN 02201.030D.5.a. through GN 02201.030D.5.c. to review any statements/evidence.

b. Protest involves the fact and/or amount of debt

If a debtor protests the fact and/or amount of a debt, obtain a FACT query.

If there is no indication that a request for review is pending, explain that the time period to appeal the overpayment determination has expired and, therefore, the determination is final. If good cause for extending the time limit is established, process the request as timely filed (see GN 03101.020

If the debtor indicates that he/she has evidence that refutes SSA's records, explain that the debt will be referred to Treasury unless we receive the evidence within 60 days from the date of the pre-offset notice. Follow GN 02201.030D.5.a. and GN 02201.030D.5.b. when the evidence is received.

7. Debtor alleges non-receipt of overpayment checks

If a debtor alleges non-receipt of the overpayment, obtain an ACCT/ROAR query and a PHUS query. If the query shows no record of non-receipt of the payment(s) in question, proceed as follows:

  • If the debtor had a representative payee, explain that the payment(s) was sent to the payee and there is no indication that payment(s) was not received.

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

  • f the debtor insists that we provide a photocopy of the check(s) in question, explain that we will investigate but the debt will still be referred to Treasury for offset. Repayment of any erroneous offset will be made if the investigation supports the non-receipt allegation. Follow GN 02406.000 to handle the non-receipt allegation (these references apply to Titles II and XVI payments, as well as Black Lung payments). DO NOT Make a ROAR Input.

NOTE: If the investigation shows that a copy of the check is not available, presume that the debtor received the check. The overpayment should be determined to stand.

8. Debtor makes a compromise offer

Follow the instructions in GN 02215.100 through GN 02215.125.

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

If the debtor alleges that a bankruptcy petition is pending or the debt has been discharged in bankruptcy, obtain a copy of the petition or discharge order. The FO inputs “Decision Pending” via the DFBP screen (Record Bankruptcy Petition) and sends the petition to the Processing Service Center (PSC)/Office of Central Operations (OCO) for their action. (See GN 02215.185 for information on handling bankruptcy cases.) To process a notification of pending bankruptcy, see GN 02215.190 for FO procedures and GN 02215.195 for PC procedures

If the debtor alleges that the debt has been discharged in a bankruptcy judgment, ask him/her to submit a copy of the discharge. If the SSA debt is listed on the discharge, input “Decision Pending” via the DFBP screen to prevent any further collection activity. If the SSA debt is not listed on the discharge, make no system input. The PSC/OCO handles the case in accordance with GN 02215.230.

E. Handling Post-Offset/Post-Certification Inquiries

Generally, inquiries will be received after actual offset has occurred. In the majority 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/post-certification inquiries.

1. Allegation of pending protest or waiver request

Follow the instructions in GN 02201.030E.1.

2. Request for waiver

Follow the instructions in GN 02201.030E.2.

3. Request for installment payments

Follow the instructions in GN 02201.030E.3.

4. Excess collection

Follow the instructions in GN 02201.030E.4.

5. Erroneous offset due to incorrect BOAN

Follow the instructions in GN 02201.030E.5 .

6. Alleged non-receipt of pre-offset notice

Follow the instructions in GN 02201.030F.2.

To Link to this section - Use this URL:
GN 02201.031 - Collection of Title II Overpayments by Administrative Offset - 05/06/2019
Batch run: 10/26/2023