Treasury Offset Program (TOP)
Questions Most Frequently Asked by Government Agencies

  1. Are federal agencies required to conduct administrative offset?

    The Debt Collection Improvement Act (DCIA) of 1996 requires any federal agency that is owed a debt that is over 180 days delinquent must notify Treasury of the debt for purposes of administrative offset (withholding). The administrative offset program in Treasury is known as the Treasury Offset Program.

    The disbursing officials of Treasury, Defense, Postal Service, Army Corps of Engineers or any other government corporation, or any other disbursing official designated by the Secretary of the Treasury, shall conduct administrative offset.

  2. How do disbursing officials of agencies other than Treasury conduct administrative offset?

    Treasury works with non-Treasury disbursing officials to match their payments against the Treasury delinquent debtor database in order to offset payments to delinquent debtors.

  3. May non-Treasury disbursing officials conduct administrative offset internally within their agencies to offset their own payments to collect their own debt?

    Yes. It is not necessary for an agency to refer its debts to Treasury for administrative offset, when it may collect the debt through offsetting its own payments.

  4. What is the definition of federal agency for purposes of administrative offset under the DCIA?

    Federal agency includes executive, judicial and legislative branch agencies, as well as government corporations.

  5. Are there any payments exempt from offset under the Treasury Offset Program?

    Yes. The DCIA exempts from offset payments made under the tariff laws, and payments made by the Department of Education under Title IV of the Higher Education Act. Certain federal benefit payments, such as Social Security payments, are subject to offset but with certain limitations. Means-tested federal benefit payments will be exempted from offset at the request of the head of the payment certifying agency and other payments may be exempted by Treasury upon request under standards set by Treasury.

  6. Must an agency change its current debt collection regulations before collecting a debt by administrative offset?

    A federal agency may adopt the Federal Claims Collection Standards (4 CFR 101-105), when revised, or prescribe its own regulations consistent with the Federal Claims Collection Standards. If agency regulations already published are consistent with the DCIA, no further regulations need to be published by the agency.

  7. May credit card payments by the U.S. Government or its agents be offset to pay delinquent debts?

    Fiscal Service/Treasury is reviewing all federal payment mechanisms to determine their applicability to the offset program.

  8. What takes precedence if administrative offset is prohibited by or provided for in another statute?

    Administrative offset under the DCIA is precluded only when another law specifically prohibits it. Other legislation authorizing administrative offset does not necessarily prohibit implementing administrative offset under the DCIA.

  9. May a debtor voluntarily pay his or her debt to avoid offset?

    A debtor who wishes to pay his/her debt voluntarily must pay the creditor agency directly. It is the creditor agency which must instruct Treasury to terminate the offset process with respect to a debt that has been paid. Debtors will be directed to the creditor agency to resolve questions, make voluntary payments, or request any other service related to the debt. The creditor agency will act under its authority to service the claim or debt, and enter into any voluntary arrangement with the debtor.

  10. How does an agency notify Treasury of debt over 180 days delinquent for purposes of inclusion into the Treasury Offset Program?

    Treasury will develop a schedule with individual federal agencies for the purpose of establishing a time-table and procedures for referral of debts. Transmission of data will occur using automated media under formats identified by Treasury. Treasury will document the terms of the coordinated offset initiative.

  11. If an agency refers/transfers debts to Treasury or another Debt Collection Center for collection, does it also have to refer its debts to the Treasury Offset Program?

    Debts referred/transferred to Treasury or another Debt Collection Center will automatically be referred to the Treasury Offset Program by Treasury or the Debt Collection Center servicing the debt. In this case, Treasury or the Debt Collection Center will be responsible for complying with all requirements of the Treasury Offset Program on behalf of the creditor agency.

  12. May Treasury collect the administrative offset fee directly from the debtor?

    Yes. Under the administrative offset program, Treasury may collect the fee directly from the debtor. The creditor agency is responsible for adding the offset fee to the debt as a cost of collection.

  13. May non-Treasury disbursing officials charge a fee for conducting administrative offset?

    The DCIA does not specifically provide for a collection fee to be assessed by non-Treasury disbursing officials. However, the DCIA authorizes Treasury to charge a fee sufficient to cover the full cost of implementing administrative offset, including mandatory administrative offset by non-Treasury disbursing officials. Fees charged by Treasury must be deposited into the DCIA account. These fees are then available to cover costs associated with implementation and operation of government debt collection activities. Treasury/Fiscal Service could enter into an interagency agreement to obtain the services required by law from the non-Treasury disbursing officials and to reimburse them for their costs.

  14. If a debtor makes a voluntary payment as a result of receiving a notice of intent to offset, will Treasury deduct a fee for collection?

    If a voluntary payment is misdirected to Treasury as a result of an intent to offset notice, the full amount of the payment will be forwarded to the appropriate creditor agency. Treasury will deduct the offset fee only when it has completed an actual offset.

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   Last Updated:  March 25, 2014