United States Code
USC most recently checked for updates: Jun 07, 2023
After trying to collect a claim from a person under section 3711(a) of this title, the head of an executive, judicial, or legislative agency may collect the claim by administrative offset. The head of the agency may collect by administrative offset only after giving the debtor—
written notice of the type and amount of the claim, the intention of the head of the agency to collect the claim by administrative offset, and an explanation of the rights of the debtor under this section;
an opportunity to inspect and copy the records of the agency related to the claim;
an opportunity for a review within the agency of the decision of the agency related to the claim; and
an opportunity to make a written agreement with the head of the agency to repay the amount of the claim.
Before collecting a claim by administrative offset, the head of an executive, judicial, or legislative agency must either—
adopt, without change, regulations on collecting by administrative offset promulgated by the Department of Justice, the Government Accountability Office, or the Department of the Treasury; or
prescribe regulations on collecting by administrative offset consistent with the regulations referred to in paragraph (1).
Except as otherwise provided in this subsection, a disbursing official of the Department of the Treasury, the Department of Defense, the United States Postal Service, the Department of Health and Human Services, or any other government corporation, or any disbursing official of the United States designated by the Secretary of the Treasury, shall offset at least annually the amount of a payment which a payment certifying agency has certified to the disbursing official for disbursement, by an amount equal to the amount of a claim which a creditor agency has certified to the Secretary of the Treasury pursuant to this subsection.
An agency that designates disbursing officials pursuant to section 3321(c) of this title is not required to certify claims arising out of its operations to the Secretary of the Treasury before such agency’s disbursing officials offset such claims.
Payments certified by the Department of Education under a program administered by the Secretary of Education under title IV of the Higher Education Act of 1965 shall not be subject to administrative offset under this subsection.
Neither the disbursing official nor the payment certifying agency shall be liable—
for the amount of the administrative offset on the basis that the underlying obligation, represented by the payment before the administrative offset was taken, was not satisfied; or
for failure to provide timely notice under paragraph (8).
Notwithstanding any other provision of law (including sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C. 407 and 1383(d)(1)), section 413(b) of Public Law 91–173 (30 U.S.C. 923(b)), and section 14 of the Act of August 29, 1935 (45 U.S.C. 231m)), except as provided in clause (ii), all payments due to an individual under—
the Social Security Act,
part B of the Black Lung Benefits Act, or
any law administered by the Railroad Retirement Board (other than payments that such Board determines to be tier 2 benefits),
shall be subject to offset under this section.
An amount of $9,000 which a debtor may receive under Federal benefit programs cited under clause (i) within a 12-month period shall be exempt from offset under this subsection. In applying the $9,000 exemption, the disbursing official shall—
reduce the $9,000 exemption amount for the 12-month period by the amount of all Federal benefit payments made during such 12-month period which are not subject to offset under this subsection; and
apply a prorated amount of the exemption to each periodic benefit payment to be made to the debtor during the applicable 12-month period.
For purposes of the preceding sentence, the amount of a periodic benefit payment shall be the amount after any reduction or deduction required under the laws authorizing the program under which such payment is authorized to be made (including any reduction or deduction to recover any overpayment under such program).
The Secretary of the Treasury shall exempt from administrative offset under this subsection payments under means-tested programs when requested by the head of the respective agency. The Secretary may exempt other payments from administrative offset under this subsection upon the written request of the head of a payment certifying agency. A written request for exemption of other payments must provide justification for the exemption under standards prescribed by the Secretary. Such standards shall give due consideration to whether administrative offset would tend to interfere substantially with or defeat the purposes of the payment certifying agency’s program. The Secretary shall report to the Congress annually on exemptions granted under this section.
The provisions of sections 205(b)(1), 809(a)(1), and 1631(c)(1) of the Social Security Act shall not apply to any administrative offset executed pursuant to this section against benefits authorized by title II, VIII, or title XVI of the Social Security Act, respectively.
This section shall apply to payments made after the date which is 90 days after the enactment of this subparagraph (or such earlier date as designated by the Secretary of Health and Human Services) with respect to claims or debts, and to amounts payable, under title XVIII of the Social Security Act.
The Secretary of the Treasury may charge a fee sufficient to cover the full cost of implementing this subsection. The fee may be collected either by the retention of a portion of amounts collected pursuant to this subsection, or by billing the agency referring or transferring a claim for those amounts. Fees charged to the agencies shall be based on actual administrative offsets completed. Amounts received by the United States as fees under this subsection shall be deposited into the account of the Department of the Treasury under section 3711(g)(7) of this title, and shall be collected and accounted for in accordance with the provisions of that section.
The Secretary of the Treasury in consultation with the Commissioner of Social Security and the Director of the Office of Management and Budget, may prescribe such rules, regulations, and procedures as the Secretary of the Treasury considers necessary to carry out this subsection. The Secretary shall consult with the heads of affected agencies in the development of such rules, regulations, and procedures.
Any Federal agency that is owed by a person a past due, legally enforceable nontax debt that is over 120 days delinquent, including nontax debt administered by a third party acting as an agent for the Federal Government, shall notify the Secretary of the Treasury of all such nontax debts for purposes of administrative offset under this subsection.
The Secretary of the Treasury shall notify Congress of any instance in which an agency fails to notify the Secretary as required under subparagraph (A).
The disbursing official conducting an administrative offset with respect to a payment to a payee shall notify the payee in writing of—
the occurrence of the administrative offset to satisfy a past due legally enforceable debt, including a description of the type and amount of the payment otherwise payable to the payee against which the offset was executed;
the identity of the creditor agency requesting the offset; and
a contact point within the creditor agency that will handle concerns regarding the offset.
If the payment to be offset is a periodic benefit payment, the disbursing official shall take reasonable steps, as determined by the Secretary of the Treasury, to provide the notice to the payee not later than the date on which the payee is otherwise scheduled to receive the payment, or as soon as practical thereafter, but no later than the date of the administrative offset. Notwithstanding the preceding sentence, the failure of the debtor to receive such notice shall not impair the legality of such administrative offset.
A levy pursuant to the Internal Revenue Code of 1986 shall take precedence over requests for administrative offset pursuant to other laws.
Nothing in this section is intended to prohibit the use of any other administrative offset authority existing under statute or common law.
Notwithstanding any other provision of law, regulation, or administrative limitation, no limitation on the period within which an offset may be initiated or taken pursuant to this section shall be effective.
This section does not apply when a statute explicitly prohibits using administrative offset or setoff to collect the claim or type of claim involved.
The Secretary may waive the requirements of sections 552a(o) and (p) of title 5 for administrative offset or claims collection upon written certification by the head of a State or an executive, judicial, or legislative agency seeking to collect the claim that the requirements of subsection (a) of this section have been met.
The Data Integrity Board of the Department of the Treasury established under 552a(u) of title 5 shall review and include in reports under paragraph (3)(D) of that section a description of any matching activities conducted under this section. If the Secretary has granted a waiver under subsection (f) of this section, no other Data Integrity Board is required to take any action under section 552a(u) of title 5.
The Secretary may, in the discretion of the Secretary, apply subsection (a) with respect to any past-due, legally-enforceable debt owed to a State if—
the appropriate State disbursing official requests that an offset be performed; and
a reciprocal agreement with the State is in effect which contains, at a minimum—
requirements substantially equivalent to subsection (b) of this section; and
any other requirements which the Secretary considers appropriate to facilitate the offset and prevent duplicative efforts.
This subsection does not apply to—
the collection of a debt or claim on which the administrative costs associated with the collection of the debt or claim exceed the amount of the debt or claim;
any collection of any other type, class, or amount of claim, as the Secretary considers necessary to protect the interest of the United States; or
the disbursement of any class or type of payment exempted by the Secretary of the Treasury at the request of a Federal agency.
In applying this section with respect to any debt owed to a State, subsection (c)(3)(A) shall not apply.
(Added Pub. L. 97–452, § 1(16)(A),
Jan. 12, 1983, 96 Stat. 2471; amended Pub. L. 104–134, title III, § 31001(c)(1), (d)(2), (e), (f), Apr. 26, 1996, 110 Stat. 1321–359, 1321–362; Pub. L. 106–169, title II, § 251(b)(10), Dec. 14, 1999, 113 Stat. 1856; Pub. L. 108–271, § 8(b), July 7, 2004, 118 Stat. 814; Pub. L. 110–234, title XIV, § 14219(a), May 22, 2008, 122 Stat. 1482; Pub. L. 110–246, § 4(a), title XIV, § 14219(a), June 18, 2008, 122 Stat. 1664, 2244; Pub. L. 110–275, title I, § 189(b), July 15, 2008, 122 Stat. 2590; Pub. L. 113–101, § 5, May 9, 2014, 128 Stat. 1153.)
cite as: 31 USC 3716