Presentation on theme: "Joanne R. Gasparini Director, Payment and Recovery Policy Staff Office of Financial Policy and Operations June 2, 2005 Administrative Wage Garnishment."— Presentation transcript:
Joanne R. Gasparini Director, Payment and Recovery Policy Staff Office of Financial Policy and Operations June 2, 2005 Administrative Wage Garnishment
SSA Program Outlays 39.5 million OASI beneficiaries $ 412 billion (79%) 7.7 million DI beneficiaries $76 billion (14%) 6.9 million SSI recipients $38 billion (7%)
TotalOASIDISSI Beginning Balance, 10/1/038,145.11,108.82,960.94,075.4 New Overpayments Detected3,593.7687.8927.31,978.6 Reestablished Debt186.410.346.8129.3 Total Available Debt11,925.21,806.93,9356,183.3 Collections (Remittances and Offsets) 1,854.1621.2629.91,016 Waivers41362.2198.7152.1 Terminated/Uncollectable477.254.2160.7262.3 Total Reductions2,744.3675.4790.61,278.3 Ending Balance, 9/30/04*8,707.41,140.73,161.34,405.4 SSA Benefit Overpayments – Fiscal Year 2004 ($’s in millions) * Reflects adjusted balance
Debt Collection Tools Treasury Offset Program = Tax Refund Offset and Administrative Offset Credit Bureau Reporting Benefit Payment Offset Federal Payment Levy Program Mandatory Cross Program Recovery Administrative Wage Garnishment (AWG)
Legal Authorities for AWG Debt Collection Improvement Act of 1996 Title 31, United States Code, section 3720D Department of the Treasury’s regulations, 31 Code of Federal Regulations (CFR) 285.11 SSA’s regulations, 20 CFR, parts 422.401-422.445 effective January 2004
What is AWG? Federal agency orders an employer to withhold amount each pay day and remits those collections to the agency Federal agency’s pursuit of the delinquent non-tax debt can occur without a court order Withholding is 15% of a debtor’s disposal wages (net amount after taxes and other deductions) SSA’s AWG process is fully automated to select, control and monitor Title II and XVI cases
AWG Selection Criteria To be selected: Debtor is alive; and SSN is available; and Not entitled to Social Security or SSI benefits; and Debt is delinquent and $200 or more; and Debt established after age 18; and No installment payment arrangement exists; and No waiver or appeal is pending
AWG Selection Criteria, cont’d Reasons for Non-Selection: Debt delinquent > 10 years; or Debtor participating in work incentive program; or Debtor making regular installment payments; or SSI debtor is undergoing mandatory cross program recovery
AWG – The Debtor Delinquent debtors notified 60 days before using AWG; i.e., preoffset notice First wave of 60-day notices sent on 2/8/05. Each month thereafter, newly delinquent debtors notified 60-day preoffset notice informs debtors about: SSA’s plans to use AWG (as well as the Treasury Offset Program and credit bureau reporting) Due process rights Opportunity to repay in full before AWG
AWG – The Employer If a debtor does not respond to 60-day notice, SSA systems automatically check the Master Earnings File for employment and earnings information Debtor has regular wages from a domestic employer of $25,000 or more and at least one employer with $15,000 or more Debtor was not involuntarily separated or, if so, has been re-employed continuously for 12 months Wage earners excluded: self-employed, agricultural wages, military and Federal employees
AWG – The Employer, cont’d Employer Compliance: Employer required to comply with AWG order Failure to do so could result in a lawsuit by government and employer is held accountable for amounts they refused to withhold Employer can be held liable for attorney fees, cost of the lawsuit and punitive damages Employer cannot retaliate against employee; e.g., terminate or take disciplinary action, due to wages subject to garnishment Employer can be held liable for employee’s attorney fees, reinstatement, back pay and punitive damages
AWG – The Employer, cont’d When all conditions for AWG are met, SSA sends employer an AWG Package: Letter to Employer – Announces intent to garnish, explanation of law and consequences of failing to comply Wage Garnishment Order – Orders employer to begin deductions immediately and continue until notified by SSA Wage Garnishment Worksheet – Assists employer calculating appropriate garnishment amount Employer Certification – Employer’s response to SSA’s garnishment order; due in 20 days Scannable coupons and return envelopes
AWG Implementation January 2005 – First debtors selected to receive 60-day notice Consisted of newly delinquent debtors (prospective approach) Monthly notices released to newly-identified debtors February 2005 – Preoffset notices mailed April 2005 – Initial Employer Packages released May 2005 – Systems planning begins on “AWG Conversion” – identification, notification and inclusion of remaining delinquent debtors into AWG AWG expected to yield $105 million in collections over 5 years from Title II and XVI overpayments.
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