1142.055.00 Collection Procedures

1142.055.15.25 Treasury Offset Program

IM-142 December 2, 2005

The Treasury Offset Program (TOP) is a mandatory Federal government delinquent debt matching and payment offset system. It is a cost-effective means by which a Federal agency may recover delinquent debts. The Treasury Offset Program:

  • offsets Federal payments due the delinquent debtor
  • uses debtor locator/address information provided by FNS to locate delinquent debtors

Federal payments include, but are not limited to, SSA, Federal salary, Federal travel reimbursement, IRS Federal tax refund, IRS Earned Income Credit (EIC), and the Child Tax Credit.

Debts must meet the following criteria to be eligible for referral to TOP:

  • greater than 180 days delinquent
  • Under 10 years old
  • At least $25
  • Not included under an automatic stay due to bankruptcy
  • Not currently under litigation or review
  • Not currently being collected through allotment reduction
  • Not currently under a repayment plan approved by the State and making agreed payment

Prior to referring the debt to TOP, the Claims and Restitution Unit sends a notice to the EU (60-day notice) of the intent to refer the debt to TOP unless the debt is paid or other arrangements are made. FNS obtains addresses for the state to use for sending out 60-day notices. The notice informs the debtor that s/he may avoid TOP collection if s/he repays the debt in full, agrees to a repayment plan and makes agreed payments, requests a review if s/he believes the debt is not owed, or files bankruptcy and the automatic stay is in effect.

Debtors are entitled to a review of the intended TOP collection action. A debtor must submit a written request for review by the date prescribed in the 60-day notice. This is not a request for a fair hearing on the claim, but only a review of the TOP referral process. Requests for a review of TOP collection action received by county FSD staff are referred to the Claims and Restitution Unit at 573-751-3004.

The debtor may contact the Claims and Restitution unit in response to a 60-day notice and have questions regarding the establishment of the claim. Questions regarding establishment or other collection actions, including compromise, received by Claims and Restitution Unit are referred to the county FSD office.

If possible, the agency shall collect the total amount of the debt in one lump sum. If the debtor is financially unable to pay in one lump sum, the agency may accept payments in regular installments. The size and frequency of the installment payments should bear a reasonable relation to the size of the debt and debtor’s ability to pay. If possible, the installment payments should be sufficient in size and frequency to pay the debt in full in three years or less. The payment agreement includes:

  • the amount of the payment
  • the payment due date
  • where the payment should be mailed
  • form or payment and addressee
  • an accelerator clause

FNS furnishes a collection file of offsets and reversals made by TOP. The funds are accepted, verified, and posted to the debts.