# Presentation: 682737

##   Administrative Wage Garnishment 

**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%)**

## SSA Benefit Overpayments – Fiscal Year 2004

|  | Total | OASI | DI | SSI |
| --- | --- | --- | --- | --- |
| Beginning Balance, 10/1/03 | 8,145.1 | 1,108.8 | 2,960.9 | 4,075.4 |
|  |  |  |  |  |
| New Overpayments Detected | 3,593.7 | 687.8 | 927.3 | 1,978.6 |
| Reestablished Debt | 186.4 | 10.3 | 46.8 | 129.3 |
| Total Available Debt | 11,925.2 | 1,806.9 | 3,935 | 6,183.3 |
|  |  |  |  |  |
| Collections (Remittances and Offsets) | 1,854.1 | 621.2 | 629.9 | 1,016 |
| Waivers | 413 | 62.2 | 198.7 | 152.1 |
| Terminated/Uncollectable | 477.2 | 54.2 | 160.7 | 262.3 |
| Total Reductions | 2,744.3 | 675.4 | 790.6 | 1,278.3 |
|  |  |  |  |  |
| Ending Balance, 9/30/04* | 8,707.4 | 1,140.7 | 3,161.3 | 4,405.4 |

**SSA Benefit Overpayments – Fiscal Year 2004**
**($’s in millions)**

- *Reflects adjusted balance

**Notes:**
OASI:
Was 79% of outlays ($412 billion), but 13% of debt balance 
DI:
Was 14% of outlays ($76 billion), 36% of debt balance
SSI:
Was 7% of outlays ($38 billion), 51% of debt balance

Causes of Error/Overpayments:  (Tom Evans discussed earlier)

SSI 10% Withholding Limitation

## Debt Collection Tools

**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)

## Debt Collection Tools, cont’d

**Debt Collection Tools, cont’d**

-   Future
-   Federal Salary Offset
-   Non-Entitled Debtors
-   Private Collection Agencies/FedDebt
-   Interest Charging

## Legal Authorities for 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?

**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

**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

**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

**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

**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

**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

**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

**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.

## Questions

**Questions**