22 C.F.R. Subpart B—Salary Offset
Title 22 - Foreign Relations
The purpose of the Debt Collection Act of 1982 (Pub. L. 97–365), is to provide a comprehensive statutory approach to the collection of debts due the United States Government. This subpart implements section 5 thereof which authorizes the collection of debts owed by Federal employees to the Federal Government by means of salary offsets. No claim may be collected by salary offset if the debt has been outstanding for more than 10 years after the agency's right to collect the debt first accrued, unless facts material to the Government's right to collect were not known and could not reasonably have been known by the official or officials who were charged with the responsibility for discovery and collection of such debts. (a) This subpart provides Peace Corps' procedures for the collection by salary offset of a Federal employee's pay to satisfy certain past due debts owed the United States Government. (b) This subpart applies to collections by the Peace Corps from: (1) Federal employees who owe debts to the Peace Corps; and (2) Employees of the Peace Corps who owe debts to other agencies. (c) This subpart does not apply to debts or claims arising under the Internal Revenue Code of 1954, as amended (26 U.S.C. 1 et seq.); the Social Security Act (42 U.S.C. 301 et seq.); the tariff laws of the United States; or to any case where collection of a debt by salary offset is explicitly provided for or prohibited by another statute (e.g., travel advances in 5 U.S.C. 5705 and employee training expenses in 5 U.S.C. 4108). (d) This subpart does not apply to any adjustment to pay arising out of an employee's election of coverage or a change in coverage under a Federal benefits program requiring periodic deductions from pay, if the amount to be recovered was accumulated over four pay periods or less. (e) Nothing in this subpart precludes the compromise, suspension, or termination of collection actions where appropriate under the standards implementing the Federal Claims Collection Act (31 U.S.C. 3711 et seq.; 4 CFR parts 101 through 105). The provisions of this subpart are to be followed in instances where: (a) The Peace Corps is owed a debt by an individual currently employed by another agency; (b) The Peace Corps is owed a debt by an individual who is a current employee of the Peace Corps; or (c) The Peace Corps currently employs an individual who owes a debt to another Federal agency. Upon receipt of proper certification from the creditor agency, the Peace Corps will offset the debtor-employee's salary in accordance with these regulations. The provisions of this subpart do not preclude an employee from requesting waiver of an overpayment under 5 U.S.C. 5584 or 8346(b), 10 U.S.C. 2774, 32 U.S.C. 716, or in any way questioning the amount or validity of a debt by submitting a subsequent claim to the General Accounting Office in accordance with the procedures prescribed by the General Accounting Office. This subpart also does not preclude an employee from requesting a waiver pursuant to other statutory provisions pertaining to the particular debts being collected. (a) Deductions under the authority of 5 U.S.C. 5514 shall not be made unless the creditor agency first provides the employee with written notice that he/she owes a debt to the Federal Government at least 30 calendar days before salary offset is to be initiated. When Peace Corps is the creditor agency this notice of intent to offset an employee's salary shall be hand-delivered or sent by certified mail to the most current address that is available. The written notice will state: (1) That Peace Corps has reviewed the records relating to the claim and has determined that a debt is owed, its origin and nature, and the amount of the debt; (2) The intention of Peace Corps to collect the debt by means of deduction from the employee's current disposable pay account until the debt and all accumulated interest is paid in full; (3) The amount, frequency, approximate beginning date, and duration of the intended deductions; (4) An explanation of the Peace Corps' policy concerning interest, penalties and administrative costs, including a statement that such assessments must be made unless excused in accordance with §309.4(d); (5) The employee's right to inspect and copy all records of the Peace Corps pertaining to the debt claimed or to receive copies of such records if personal inspection is impractical; (6) The right to a hearing conducted by a hearing official (an administrative law judge, or alternatively, a hearing official not under the supervision or control of the Peace Corps) with respect to the existence and amount of the debt claimed, or the repayment schedule (i.e., the percentage of disposable pay to be deducted each pay period), so long as a petition is filed by the employee as prescribed in §309.11; (7) If not previously provided, the opportunity (under terms agreeable to the Peace Corps) to establish a schedule for the voluntary repayment of the debt or to enter into a written agreement to establish a schedule for repayment of the debt in lieu of offset. The agreement must be in writing, signed by both the employee and the creditor agency (4 CFR 102.2(e)); (8) The name, address and telephone number of an officer or employee of the Peace Corps who may be contacted concerning procedures for requesting a hearing; (9) The method and time period for requesting a hearing; (10) That the timely filing of a petition for hearing within 15 calendar days after delivery of the notice of intent to offset will stay the commencement of collection proceedings; (11) The name and address of the office to which the petition should be sent; (12) That the Peace Corps will initiate certification procedures to implement a salary offset, as appropriate, (which may not exceed 15 percent of the employee's disposable pay) not less than 30 calendar days from the date of delivery of the notice of debt, unless the employee files a timely petition for a hearing; (13) That a final decision on the hearing (if one is requested) will be issued at the earliest practical date, but not later than 60 calendar days after the filing of the petition requesting the hearing, unless the employee requests and the hearing official grants a delay in the proceedings; (14) That any knowingly false or frivolous statements, representations or evidence may subject the employee to: (i) Disciplinary procedures appropriate under chapter 75 of 5 U.S.C., 5 CFR 752, or any other applicable statutes or regulations; (ii) Penalties under the False Claims Act, §§3729–3731 of title 31, United States Code, or any other applicable statutory authority; and (iii) Criminal penalties under 18 U.S.C. sections 286, 287, 1001, and 1002 or any other applicable authority; (15) Any other rights and remedies available to the employee under statutes or regulations governing the program for which the collection is being made; (16) That unless there are applicable contractual or statutory provisions to the contrary, amounts paid on or deducted for the debt which are later waived or found not owed to the United States will be promptly refunded to the employee; and (17) That proceedings with respect to such debt are governed by section 5 of the Debt Collection Act of 1982 (5 U.S.C. 5514). (b) The Peace Corps is not required to comply with paragraph (a) of this section for any adjustment to pay arising out of an employee's election of coverage or a change in coverage under a Federal benefits program requiring periodic deductions from pay if the amount to be recovered was accumulated over four pay periods or less. (a) Request for review. Except as provided in paragraph (b) of this section, an employee who desires a review concerning the existence or amount of the debt or the proposed offset schedule must send a request to the office designated in the notice of intent. See §309.10(a)(8). The request for review must be received by the designated office not later than 15 calendar days after the date of delivery of the notice as provided in §309.10(a). The request must be signed by the employee and should identify and explain with reasonable specificity and brevity the facts, evidence and witnesses which the employee believes support his or her position. If the employee objects to the percentage of disposable pay to be deducted from each check, the request should state the objection and the reasons for it. The employee must also specify whether an oral hearing or a review of the documentary evidence is requested. If an oral hearing is desired, the request should explain why the matter cannot be resolved by review of the documentary evidence alone. (b) Failure to timely submit. (1) If the employee files a petition for a review after the expiration of the 15 calendar day period provided for in paragraph (a) of this section, the designated office may accept the request if the employee can show that the delay was the result of circumstances beyond his or her control, or because of a failure to receive the notice of the filing deadline (unless the employee has actual knowledge of the filing deadline). (2) An employee waives the right to a review, and will have his or her disposable pay offset in accordance with Peace Corps' offset schedule, if the employee fails to file a request for a hearing unless such failure is excused as provided in paragraph (b)(1) of this section. (3) If the employee fails to appear at an oral hearing of which he or she was notified, unless the hearing official determines failure to appear was due to circumstances beyond the employee's control, his or her appeal will be decided on the basis of the documents then available to the hearing official. (c) Representation at the hearing. The creditor agency may be represented by a representative of its choice. The employee may represent himself or herself or may be represented by an individual of his or her choice and at his or her expense. (d) Review of Peace Corps records related to the debt. (1) An employee who intends to inspect or copy creditor agency records related to the debt in accordance with §309.10(a)(5), must send a letter to the official designated in the notice of intent to offset stating his or her intention. The letter must be sent within 15 calendar days after receipt of the notice. (2) In response to a timely request submitted by the debtor, the designated official will notify the employee of the location and time when the employee may inspect and copy records related to the debt. (3) If personal inspection is impractical, copies of such records shall be sent to the employee. (e) Hearing official. Unless the Peace Corps appoints an administrative law judge to conduct the hearing, the Peace Corps must obtain a hearing official who is not under the supervision or control of the Peace Corps. (f) Obtaining the services of a hearing official when the Peace Corps is the creditor agency. (1) When the debtor is not a Peace Corps employee, and in the event that the Peace Corps cannot provide a prompt and appropriate hearing before an administrative law judge or before a hearing official furnished pursuant to another lawful arrangement, the Peace Corps may contact an agent of the paying agency designated in appendix A to part 581 of title 5, Code of Federal Regulations or as otherwise designated by the agency, and request a hearing official. (2) When the debtor is a Peace Corps employee, the Peace Corps may contact any agent of another agency designated in appendix A to part 581 of title 5, Code of Federal Regulations or otherwise designated by that agency, to request a hearing official. (g) Procedure. (1) If the employee requests a review, the hearing official or administrative law judge shall notify the employee of the form of the review to be provided. If an oral hearing is authorized, the notice shall set forth the date, time and location of the hearing. If the review will be on documentary evidence, the employee shall be notified that he or she should submit arguments in writing to the hearing official or administrative law judge by a specified date, after which the record will be closed. This date shall give the employee reasonable time (not less than 14 calendar days) to submit documentation. (2) Oral hearing. An employee who requests an oral hearing shall be provided an oral hearing if the hearing official or administrative law judge determines that the matter cannot be resolved by review of documentary evidence alone (e.g. when an issue of credibility or veracity is involved). The hearing is not an adversarial adjudication, and need not take the form of an evidentiary hearing. Oral hearings may take the form of, but are not limited to: (i) Informal conferences with the hearing official or administrative law judge, in which the employee and agency representative will be given full opportunity to present evidence, witnesses and argument; (ii) Informal meetings with an interview of the employee; or (iii) Formal written submissions, with an opportunity for oral presentation. (3) Paper review. If the hearing official or administrative law judge determines that an oral hearing is not necessary, he or she will make the determination based upon a review of the available written record. (4) Record. The hearing official must maintain a summary record of any hearing provided by this subpart. See 4 CFR 102.3. Witnesses who testify in oral hearings will do so under oath or affirmation. (h) Date of decision. The hearing official or administrative law judge shall issue a written opinion stating his or her decision, based upon documentary evidence and information developed at the hearing, as soon as practicable after the hearing, but not later than 60 calendar days after the date on which the petition was received by the creditor agency, unless the employee requests a delay in the proceedings. In such case the 60 day decision period shall be extended by the number of days by which the hearing was postponed. (i) Content of decision. The written decision shall include: (1) A statement of the facts presented to support the origin, nature, and amount of the debt; (2) The hearing official's findings, analysis and conclusions; and (3) The terms of any repayment schedules, if applicable. (j) Failure to appear. In the absence of good cause shown (e.g., excused illness), an employee who fails to appear at a hearing shall be deemed, for the purpose of this subpart, to admit the existence and amount of the debt as described in the notice of intent. If the representative of the creditor agency fails to appear, the hearing official shall schedule a new hearing date upon the request of the agency representative upon showing of good cause. Both parties shall be given the time and place of the new hearing. (a) The Peace Corps salary offset coordination officer shall provide a certification to the paying agency in all cases where: (1) The hearing official determines that a debt exists; (2) The employee admits the existence and amount of the debt by failing to request a review; or (3) The employee admits the existence of the debt by failing to appear at a hearing. (b) The certification must be in writing and must state: (1) That the employee owes the debt; (2) The amount and basis of the debt; (3) The date the Government's right to collect the debt first accrued; (4) That the Peace Corps' regulations have been approved by OPM pursuant to 5 CFR part 550, subpart K; (5) The amount and date of any lump sum payment; (6) If the collection is to be made in installments, the number of installments to be collected, the amount of each installment, and the date of the first installment, if a date other than the next officially established pay period is required; and (7) The date the action was taken and that it was taken pursuant to 5 U.S.C. 5514. (a) In response to a notice of intent, an employee may propose a written agreement to repay the debt as an alternative to salary offset. Any employee who wishes to repay a debt without salary offset shall submit in writing a proposed agreement to repay the debt. The proposal shall admit the existence of the debt and set forth a proposed repayment schedule. Any proposal under this paragraph must be received by the official designated in that notice within 15 calendar days after receipt of the notice of intent. (b) When the Peace Corps is the creditor agency, in response to a timely proposal by the debtor the agency will notify the employee whether the employee's proposed written agreement for repayment is acceptable. It is within the agency's discretion to accept a repayment agreement instead of proceeding by offset. (c) If the Peace Corps decides that the proposed repayment agreement is unacceptable, the employee will have 15 calendar days from the date he or she received notice of the decision to file a petition for a review. (d) If the Peace Corps decides that the proposed repayment agreement is acceptable, the alternative arrangement must be in writing and signed by both the employee and a designated agency official. (a) An employee subject to salary offset or a voluntary repayment agreement, may at any time request a special review by the creditor agency of the amount of the salary offset or voluntary payment, based on materially changed circumstances such as, but not limited to, catastrophic illness, divorce, death, or disability. (b) In determining whether an offset would prevent the employee from meeting essential subsistence expenses (costs for food, housing, clothing, transportation and medical care), the employee shall submit a detailed statement and supporting documents for the employee, his or her spouse and dependents indicating: (1) Income from all sources; (2) Assets; (3) Liabilities; (4) Number of dependents; (5) Expenses for food, housing, clothing and transportation; (6) Medical expenses; and (7) Exceptional expenses, if any. (c) If the employee requests a special review under this section, the employee shall file an alternative proposed offset or payment schedule and a statement, with supporting documents, showing why the current salary offset or payments result in significant financial hardship to the employee. (d) The Peace Corps shall evaluate the statement and supporting documents, and determine whether the original offset or repayment schedule imposes significant financial hardship on the employee. The Peace Corps shall notify the employee in writing of such determination, including, if appropriate, a revised offset or payment schedule. (e) If the special review results in a revised offset or repayment schedule, the Peace Corps salary offset coordination officer shall provide a new certification to the paying agency. (a) Upon receipt of proper certification of the creditor agency, the Peace Corps payroll office will send the employee a written notice of salary offset. Such notice shall, at a minimum: (1) Contain a copy of the certification received from the creditor agency; and (2) Advise the employee that salary offset will be initiated at the next officially established pay interval. (b) The payroll office shall provide a copy of the notice to the creditor agency and advise such agency of the dollar amount to be offset and the pay period when the offset will begin. (a) The Director (or designee) shall coordinate salary deductions under this subpart. (b) The payroll office shall determine the amount of the employee's disposable pay and will implement the salary offset. (c) Deductions shall begin within 3 official pay periods following receipt by the payroll office of certification. (d) Types of collection. (1) Lump-sum payment. If the amount of the debt is equal to or less than 15 percent of disposable pay, such debt generally will be collected in one lump-sum payment. (2) Installment deductions. Installment deductions will be made over a period not greater than the anticipated period of employment. The size and frequency of installment deductions will bear a reasonable relation to the size of the debt and the employee's ability to pay. However, the amount deducted from any period may not exceed 15 percent of the disposable pay from which the deduction is made unless the employee has agreed in writing to the deduction of a greater amount. (3) Lump-sum deductions from final check. A lump-sum deduction exceeding the 15 percent of disposable pay limitation may be made from any final salary payment pursuant to 31 U.S.C. 3716 in order to liquidate the debt, whether the employee is being separated voluntarily or involuntarily. (4) Lump-sum deductions from other sources. Whenever an employee subject to salary offset is separated from the Peace Corps, and the balance of the debt cannot be liquidated by offset of the final salary check, the Peace Corps, pursuant to 31 U.S.C. 3716, may offset any later payments of any kind against the balance of the debt. (e) Multiple debts. In instances where two or more creditor agencies are seeking salary offsets, or where two or more debts are owed to a single creditor agency, the payroll office may, at its discretion, determine whether one or more debts should be offset simultaneously within the 15 percent limitation. (f) Precedence of debts owed to the Peace Corps. For Peace Corps employees, debts owed to the agency generally take precedence over debts owed to other agencies. In the event that a debt to the Peace Corps is certified while an employee is subject to a salary offset to repay another agency, the payroll office may decide whether to have that debt repaid in full before collecting its claim or whether changes should be made in the salary deduction being sent to the other agency. If debts owed the Peace Corps can be collected in one pay period, the payroll office may suspend the salary offset to the other agency for that pay period in order to liquidate the Peace Corps' debt. When an employee owes two or more debts, the best interests of the Government shall be the primary consideration in the determination by the payroll office of the order of the debt collection. (a) Responsibility of the Peace Corps as the creditor agency. (1) The Director or Director's designee shall coordinate debt collections and shall, as appropriate: (i) Arrange for a hearing upon proper petition by a federal employee; and (ii) Prescribe such practices and procedures as may be necessary to carry out the intent of this subpart. (2) Designate a salary offset coordination officer who will be responsible for: (i) Ensuring that each notice of intent to offset is consistent with the requirements of §309.10; (ii) Ensuring that each certification of debt sent to a paying agency is consistent with the requirements of §309.12; (iii) Obtaining hearing officials from other agencies pursuant to §309.11(f); and (iv) Ensuring that hearings are properly scheduled. (3) Request recovery from current paying agency. Upon completion of the procedures established in these regulations and pursuant to 5 U.S.C. 5514, the Peace Corps must: (i) Certify, in writing, that the employee owes the debt, the amount and basis of the debt, the date on which payments are due, the date the Government's right to collect the debt first accrued, and that the Peace Corps' regulations implementing 5 U.S.C. 5514 have been approved by the Office of Personnel Management; (ii) Advise the paying agency of the actions taken under 5 U.S.C. 5514(a) and give the dates the actions were taken (unless the employee has consented to the salary offset in writing or signed a statement acknowledging receipt of the required procedures and the written consent or statement is forwarded to the paying agency); (iii) Except as otherwise provided in paragraph (a)(3) of this section, submit a debt claim containing the information specified in paragraphs (a)(3) (i) and (ii) of this section and an installment agreement (or other instruction on the payment schedule), if applicable, to the employee's paying agency; (iv) If the employee is in the process of separating, the Peace Corps must submit its debt claim to the employee's paying agency for collection as provided in §309.16. The paying agency must certify the total amount of its collection and notify the creditor agency and the employee as provided in paragraph (b)(4) of this section. If the paying agency is aware that the employee is entitled to payments from the Civil Service Retirement and Disability Fund, or other similar payments, it must provide written notification to the agency responsible for making such payments that the debtor owes a debt (including the amount) and that the provisions of this section have been fully complied with. However, the Peace Corps must submit a properly certified claim to the agency responsible for making such payments before the collection can be made. (v) If the employee is already separated and all payments due from his or her former paying agency have been paid, the Peace Corps may request, unless otherwise prohibited, that money due and payable to the employee from the Civil Service Retirement and Disability Fund (5 CFR 831.1801 et seq.) or other similar funds, be administratively offset to collect the debt (See 31 U.S.C. 3716 and 41 CFR 102.4). (4) When an employee transfers to another paying agency, the Peace Corps need not repeat the due process procedures described in 5 U.S.C. 5514 and this subpart to continue the collection. The Peace Corps must review the debt upon receiving the former paying agency's notice of the employee's transfer to make sure the collection is continued by the new paying agency. (b) Responsibility of the Peace Corps as the paying agency—(1) Complete claim. When the Peace Corps receives a certified claim from a creditor agency, deductions should be scheduled to begin at the next officially established pay interval. The employee must receive written notice that the Peace Corps has received a certified debt claim from the creditor agency (including the amount) and written notice of the date salary offset will begin and the amount of such deductions. (2) Incomplete claim. When the Peace Corps receives an incomplete certification of debt from a creditor agency, the Peace Corps must return the debt claim with notice that procedures under 5 U.S.C. 5514 and this subpart must be followed and a properly certified debt claim received before action will be taken to collect from the employee's current pay account. (3) Review. The Peace Corps is not authorized to review the merits of the creditor agency's determination with respect to the amount or validity of the debt certified by the creditor agency. (4) Employees who transfer from one paying agency to another. If, after the creditor agency has submitted the debt claim to the Peace Corps, the employee transfers to another agency before the debt is collected in full, the Peace Corps must certify the total amount collected on the debt. One copy of the certification must be furnished to the employee and one copy to the creditor agency along with notice of the employee's transfer. The Peace Corps shall assess interest, penalties and administrative costs on debts owed pursuant to 31 U.S.C. 3717 and 4 CFR 102.13. (a) In instances where the Peace Corps is the creditor agency, it shall promptly refund any amounts deducted under the authority of 5 U.S.C. 5514 when: (1) The debt is waived or otherwise found not to be owed to the United States; or (2) An administrative or judicial order directs the Peace Corps to make a refund. (b) Unless required or permitted by law or contract, refunds under this subpart shall not bear interest. (a) The Peace Corps will provide a hearing official upon request of the creditor agency when the debtor is employed by the Peace Corps and the creditor agency cannot provide a prompt and appropriate hearing before an administrative law judge or before a hearing official furnished pursuant to another lawful arrangement. (b) The Peace Corps will provide a hearing official upon request of a creditor agency when the debtor works for the creditor agency and that agency cannot arrange for a hearing official. (c) The salary offset coordination officer will appoint qualified personnel to serve as hearing officials. (d) Services rendered under this section will be provided on a fully reimbursable basis pursuant to the Economy Act of 1932, as amended, 31 U.S.C. 1535. An employee's involuntary payment of all or any portion of a debt being collected under this subpart shall not be construed as a waiver of any rights which the employee may have under 5 U.S.C. 5514 or any other provision of a written contract or law unless there are statutory or contractual provisions to the contrary.
Title 22: Foreign Relations
PART 309—CLAIMS COLLECTION
Subpart B—Salary Offset
§ 309.6 Purpose.
§ 309.7 Scope.
§ 309.8 Applicability of regulations.
§ 309.9 Waiver requests and claims to the General Accounting Office.
§ 309.10 Notice requirements before offset.
§ 309.11 Review.
§ 309.12 Certification.
§ 309.13 Voluntary repayment agreements as an alternative to salary offset.
§ 309.14 Special review.
§ 309.15 Notice of salary offset.
§ 309.16 Procedures for salary offset.
§ 309.17 Coordinating salary offset with other agencies.
§ 309.18 Interest, penalties and administrative costs.
§ 309.19 Refunds.
§ 309.20 Request for the services of a hearing official from the creditor agency.
§ 309.21 Non-waiver of rights by payments.
