United States Code
USC most recently checked for updates: Dec 10, 2023
Installment deduction for indebtedness to the United States
When the head of an agency or his designee determines that an employee, member of the Armed Forces or Reserve of the Armed Forces, is indebted to the United States for debts to which the United States is entitled to be repaid at the time of the determination by the head of an agency or his designee, or is notified of such a debt by the head of another agency or his designee the amount of indebtedness may be collected in monthly installments, or at officially established pay intervals, by deduction from the current pay account of the individual. The deductions may be made from basic pay, special pay, incentive pay, retired pay, retainer pay, or, in the case of an individual not entitled to basic pay, other authorized pay. The amount deducted for any period may not exceed 15 percent of disposable pay, except that a greater percentage may be deducted upon the written consent of the individual involved. If the individual retires or resigns, or if his employment or period of active duty otherwise ends, before collection of the amount of the indebtedness is completed, deduction shall be made from subsequent payments of any nature due the individual from the agency concerned. All Federal agencies to which debts are owed and which have outstanding delinquent debts shall participate in a computer match at least annually of their delinquent debt records with records of Federal employees to identify those employees who are delinquent in repayment of those debts. The preceding sentence shall not apply to any debt under the Internal Revenue Code of 1986. Matched Federal employee records shall include, but shall not be limited to, records of active Civil Service employees government-wide, military active duty personnel, military reservists, United States Postal Service employees, employees of other government corporations, and seasonal and temporary employees. The Secretary of the Treasury shall establish and maintain an interagency consortium to implement centralized salary offset computer matching, and promulgate regulations for this program. Agencies that perform centralized salary offset computer matching services under this subsection are authorized to charge a fee sufficient to cover the full cost for such services.
Except as provided in paragraph (3) of this subsection, prior to initiating any proceedings under paragraph (1) of this subsection to collect any indebtedness of an individual, the head of the agency holding the debt or his designee, shall provide the individual with—
a minimum of thirty days written notice, informing such individual of the nature and amount of the indebtedness determined by such agency to be due, the intention of the agency to initiate proceedings to collect the debt through deductions from pay, and an explanation of the rights of the individual under this subsection;
an opportunity to inspect and copy Government records relating to the debt;
an opportunity to enter into a written agreement with the agency, under terms agreeable to the head of the agency or his designee, to establish a schedule for the repayment of the debt; and
an opportunity for a hearing on the determination of the agency concerning the existence or the amount of the debt, and in the case of an individual whose repayment schedule is established other than by a written agreement pursuant to subparagraph (C), concerning the terms of the repayment schedule.
A hearing, described in subparagraph (D), shall be provided if the individual, on or before the fifteenth day following receipt of the notice described in subparagraph (A), and in accordance with such procedures as the head of the agency may prescribe, files a petition requesting such a hearing. The timely filing of a petition for hearing shall stay the commencement of collection proceedings. A hearing under subparagraph (D) may not be conducted by an individual under the supervision or control of the head of the agency, except that nothing in this sentence shall be construed to prohibit the appointment of an administrative law judge. The hearing official shall issue a final decision at the earliest practicable date, but not later than sixty days after the filing of the petition requesting the hearing.
Paragraph (2) shall not apply to routine intra-agency adjustments of pay that are attributable to clerical or administrative errors or delays in processing pay documents that have occurred within the four pay periods preceding the adjustment and to any adjustment that amounts to $50 or less, if at the time of such adjustment, or as soon thereafter as practical, the individual is provided written notice of the nature and the amount of the adjustment and a point of contact for contesting such adjustment.
The collection of any amount under this section shall be in accordance with the standards promulgated pursuant to sections 3711 and 3716–3718 of title 31 or in accordance with any other statutory authority for the collection of claims of the United States or any agency thereof.
For purposes of this subsection—
“disposable pay” means that part of pay of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld; and
“agency” includes executive departments and agencies, the United States Postal Service, the Postal Regulatory Commission, any nonappropriated fund instrumentality described in section 2105(c) of this title, the United States Senate, the United States House of Representatives, and any court, court administrative office, or instrumentality in the judicial or legislative branches of the Government, and government corporations.
The head of each agency shall prescribe regulations, subject to the approval of the President, to carry out this section and section 3530(d) of title 31. Regulations prescribed by the Secretaries of the military departments shall be uniform for the military services insofar as practicable.
For purposes of section 7117(a) of this title, no regulation prescribed to carry out subsection (a)(2) of this section shall be considered to be a Government-wide rule or regulation.
Subsection (a) of this section does not modify existing statutes which provide for forfeiture of pay or allowances. This section and section 3530(d) of title 31 do not repeal, modify, or amend section 7837(d) or 9837(d) of title 10 or section 1007(b), (c) of title 37.
A levy pursuant to the Internal Revenue Code of 1986 shall take precedence over other deductions under this section.
An employee of a nonappropriated fund instrumentality described in section 2105(c) of this title is deemed an employee covered by this section.
(Pub. L. 89–554,
Sept. 6, 1966, 80 Stat. 477; Pub. L. 96–54, § 2(a)(2), Aug. 14, 1979, 93 Stat. 381; Pub. L. 97–258, § 3(a)(12), Sept. 13, 1982, 96 Stat. 1063; Pub. L. 97–365, § 5, Oct. 25, 1982, 96 Stat. 1751; Pub. L. 97–452, § 2(a)(2), Jan. 12, 1983, 96 Stat. 2478; Pub. L. 98–216, § 3(a)(4), Feb. 14, 1984, 98 Stat. 6; Pub. L. 104–134, title III, § 31001(h), Apr. 26, 1996, 110 Stat. 1321–363; Pub. L. 109–435, title VI, § 604(b), Dec. 20, 2006, 120 Stat. 3241; Pub. L. 110–181, div. A, title VI, § 652, Jan. 28, 2008, 122 Stat. 162; Pub. L. 115–232, div. A, title VIII, § 809(c)(3), Aug. 13, 2018, 132 Stat. 1841.)
cite as: 5 USC 5514