May 24, 2018

Administrative Wage Garnishment 
Agenda 

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AWG Administration

AWG Costs

AWG Initiation

AWG Hearing Requests

AWG Hearings

AWG Orders / Non-Compliance 

‘s
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Collection Tools

• Demand Letters and Phone Calls

• Payment Agreement Options

• Credit Bureau Reporting

• Treasury Offset Program

• Administrative Wage Garnishment

• Private Collection Agencies

• Litigation by Department of Justice

• IRS Form 1099-C after Closeout
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What is AWG?

Administrative Wage Garnishment (AWG) is a collection 

tool used to enhance the ability of federal agencies to collect 

delinquent government debts. It is an instrument designed 

for agencies to have a debtor’s wages garnished in an effort 

to satisfy the outstanding debt. AWG is permitted by federal 

law and does not require a judgement or court order for 

initiation. 
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Benefits of AWG

• AWG can be started without a court order

• No statute of limitations

• AWG has proven an effective tool in encouraging the 

establishment of payment agreements. 
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PCA / DMS 

Sends AWG 

Due Process 

Notice Letter

DMSOC E Receives 

Hearing Decision, 

Records in FedDebt. 

Copy sent to PCA if 

Applicable

PCA / DMSOC E 

Take Appropriate Action 

based on AWG 

Termination or 

Continuation

Creditor Agency / 

DMSOC W 

Conducts Hearing 

and Issues Decision 

within 60 Days of 

Hearing Request

PCA Receives PCAInitiated AWG 

Hearing Decision 

DMSOC-E Records 

all Hearing Requests 

in 

FedDebt

Creditor Agency / 

DMSOC W Sends 

DMSOC E and 

Debtor the 

Hearing Decision

DMS Sends 

Hearing Request 

to Creditor 

Agency or 

DMSOC West

PCA Receives 

PCA-Initiated 

AWG Hearing 

Requests Debtor Requests 

Hearing 

Before (timely) 

or After (late) 

AWG Starts DMSOC 

Receives 

DMS-Initiated 

AWG Hearing 

Requests

Debt Management Services 

Administrative Wage Garnishment (AWG) Hearing 

Process Work Flow

Process Key:

DMS

PCA

PCA / DMS

Creditor Agency

Orange

Blue

Yellow

Green

1.

4.

3b.

3a..

2.

7. 6. 5.

8.

9b. 9a.

PCA / DMS

Sends AWG

Notice of Intent 

to Garnish to the 

Debtor

DMSOC E Receives 

Hearing Decision, 

Records in FedDebt. 

Copy sent to Agency 

and PCA, if 

Applicable

PCA / DMSOC E 

Take Appropriate Action 

based on AWG

Termination, Modification 

or Continuation

Creditor Agency / 

DMSOC W 

Conducts Hearing 

and Issues Decision

PCA Receives PCAInitiated AWG 

Hearing Decision 

DMSOC-E Records 

all Hearing Requests 

in 

FedDebt

Creditor Agency / 

DMSOC W Sends 

DMSOC E and 

Debtor the 

Hearing Decision

DMS Sends 

Hearing Request 

to Creditor 

Agency or 

DMSOC West

PCA Receives 

PCA-Initiated 

AWG Hearing 

Requests Debtor Requests 

Hearing 

Timely (<15 

days) or 

Late(>15 days) DMSOC 

Receives 

DMS-Initiated 

AWG Hearing 

Requests

Debt Management Services 

Administrative Wage Garnishment (AWG) Hearing 

Process Work Flow

Process Key:

DMS

PCA

PCA / DMS

Creditor Agency

Orange

Blue

Yellow

Green

1.

4.

3b.

3a..

2.

7. 6. 5.

8.

9b. 9a.
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Administration
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Agency Participation
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Agency Participation

• Onboarding new agencies 

• AWG Eligible Portfolio Report

• Drafting AWG regulations / adopting 

Treasury’s AWG regulations

• Develop hearing procedures 

o Agency can do their own hearings

o Treasury can conduct hearings on agency’s behalf

 Non-hardship hearings

 Hardship hearings
AWG Hearing Guidelines

L E A D ∙ T R A N S F O R M ∙ D E L I V E R

• Hearing official is appointed by agency appointing authority.

• Hearing official should not be the person responsible for 

establishing the debt or who has primary responsibility for 

collecting the debt. 

• Official Does Not need to be an administrative law judge, most 

agencies do not use judges

• Hearings may be oral or paper

• Hearing decision must be in writing

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AWG Implementation

L E A D ∙ T R A N S F O R M ∙ D E L I V E R

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2017 Annual Government-Wide Federal Receivables Management Symposium

• Once an agency starts participating in AWG, all consumer debts 

and commercial debts with individual liability in the agency’s 

portfolio are eligible for participation

• DMS will provide a list of AWG Eligible Debt/Programs

• Each program must be authorized for AWG by the agency in 

order to update the profile for participation

• Once profile is changed, AWG is retroactive

• Debts which were already in CSNG will be run in NDNH database 

for employer matching
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Agency Participation

• If Treasury is to conduct agency hearings

• Memorandums of Understanding (MOU)

• Interagency Agreements (IAA) Form 7600 A & B

• Information communicated to other DMS staff

• FedDebt liaison team contacted to update FedDebt 

to “yes” for authorized programs

• Contact AWG Operation to alert of hearing procedure 

for new participating agency

• Updated agency hearing contact spreadsheet sent to 

Bham and Austin

• MOU and IAA copy sent to Austin
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Questions?
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Costs
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Hearing Costs

• From Inception until FY 18 DMS Hearings Program 

costs were $200 for AWG and $250 for FSO

• FY18 DMS increased the costs of AWG to more 

closing reflect the cost of providing hearing services 

and FSO cost to reflect actual cost of hearing 

services
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AWG Cost and Fee Comparison

Cost Overview Cost Fee Cost Fee Cost Fee

2017 2017 2018 2018 2019 2019

Non-Hardship Hearing Request without 

Reconsideration $519.93 $200.00 $519.93 $300.00 $265.93 $265.00 

Non-Hardship Hearing Request with 

Reconsideration (1% of all Non-Hardship cases) $687.47 $200.00 $687.47 $350.00 $543.91 $450.00

Hardship Hearing Request without 

Reconsideration $260.59 $0.00 $260.59 $150.00 $238.70 $200.00

Hardship Hearing Request with Reconsideration 

(7% of all Hardship cases) $428.13 $0.00 $428.13 $200.00 $492.86 $300.00

Hearing Requests Returned to Agencies $287.27 $0.00 $287.27 $150.00 $225.46 $200.00

Hearing Functions and Costs
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AWG Costs and Fee Comparison

Cost Overview Cost Fee Cost Fee

2018 2018 2019 2019

Dual Hardship and Non Hardship N/A $350.00 $330.34 $325.00

Dual Hardship and Non-Hardship With 

Reconsideration (7% of all Dual cases) N/A $200.00 $672.57 $450.00

Hearing Functions and Costs
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AWG Fee Changes for FY 19 

Cost Overview Fees Fees Difference

2018 2019

Non-Hardship Hearing Request without Reconsideration $300.00 $265.00 ($35.00)

Non-Hardship Hearing Request with Reconsideration (1% of all NonHardship cases) $350.00 $450.00 $100.00

Hardship Hearing Request without Reconsideration $150.00 $200.00 $50.00

Hardship Hearing Request with Reconsideration (7% of all Hardship

cases) $200.00 $300.00 $100.00

Hearing Request returned to Agencies $150.00 $200.00 $50.00

Hearing Functions and Costs
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FSO Cost and Fee Comparison

Cost Overview Cost Fee Cost Fee Cost Fee

2017 2017 2018 2018 2019 2019

Federal Salary Offset 

(FSO) $1,324.47 $200.00 $1,324.47 $1,320.00 $1,324.47 $1,320.00 

Hearing Functions and Costs
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Hearing Invoices 

• Austin sends monthly Hearing Status Report of all 

hearings resolved (Non-hardship and Hardship)

• Hearings information entered into spreadsheet

• “Courtesy” invoice created for each agency and 

emailed to agency contact

• Invoice also given to BFS Budget for IPAC

• BFS Budget (AWG) or DMS Comptroller (FSO) 

gives us document reference number (DRN)

• We email agency the DRN to assist them in 

identifying the IPAC
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Questions?
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AWG Initiation
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AWGInitiation 

AWG Initiation is the start of the AWG notification process to 

the debtor. The initiation is the actual sending of the AWG 

notice of intent letter to the debtor after the debt has met 

AWG eligibility criteria.
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AWGInitiation 

 AWG Notice Letters Primary Requirements:

• Employer is identified

• TIN is valid

• Agency changes profile to “Yes” for AWG

• Must meet dollar threshold ($200.01)
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AWGInitiation 

Type of Initiation:

• Automated—System Generated

- Up to 1000 daily
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AWG Initiation

• Debtor has 30 calendar days to respond to the AWG 

Notice Letter before it is sent to the employer for 

garnishment

• On the evening of 30th day, a Garnishment Order will be 

generated unless there is a:

• Timely hearing filed

• Timely Payment Agreement negotiated
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Questions?
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AWG Hearing Requests
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AWG Hearing Request

Debtor may request a hearing at any time during AWG 

process

• Timely – received within 15 business days of the AWG 

Notice letter (stops AWG)

• Late – received more than 15 business days after the 

AWG Notice letter (AWG continues for 60 days)
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AWG Hearing Process 

• DMS receives the hearing request from the 

debtor and forwards to the Creditor Agency’s

Hearing Official

• Hearing Official conducts the hearing, and issues 

hearing decision
AWG Hearing Process 

L E A D ∙ T R A N S F O R M ∙ D E L I V E R

• No requirement to Duplicate Hearings. Agencies do not need to provide 

more than one hearing based on same grounds or objections. 

• Hardship hearings can be requested multiple times, if financial circumstances 

have changed

• Many agencies already conduct some type of hearings, i.e. salary offset –

these procedures can be modified to apply to AWG

• Similar to dispute process

• $200.01 Debt Balance Minimum (courtesy to agency)
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Questions?
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AWG Hearings
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• DMSOC – West receives hearing requests from DMSOCEast through IDMS

AWG Hearings
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Types of Hearings

A. Existence and Validity – I don’t owe the debt

B. Debt amount – I don’t owe the amount that you are 

saying I owe

C. Hardship – I can’t afford to pay

D. Employment – I was fired from previous job and have 

worked in current job <12 months
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Possible Hearings Decisions

A. Termination of garnishment with a review of the case 

within a year (hardship)

B. Continue garnishment with modified lesser garnishment 

percentage and amount (hardship)

C. Continue garnishment at the maximum 15% (hardship 

and non-hardship)

D. Recall of the debt (non-hardship)
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Who Do We Conduct Hearings For?

A. DMS conducts all FedDebt agencies’ “hardship” 

hearings

B. DMS conducts “non-hardship” for:

i. Department of Agriculture ( Multiple programs)

ii. Small Business Administration

iii. Office of Personnel Management

iv. Department of Energy - WAPA

v. Veterans Administration

vi. Federal Retirement Thrift Investment Board

C. DMS conducts Federal Salary Offset Hearings for:

i. Immigration and Custom Enforcement

ii. Department of Agriculture 
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• DMSOC-West sends a Decision Letter to debtor explaining 

the decision

• Update DMSOC-East via IDMS of hearing Decision

Hearing Decision
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Questions?
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AWG Orders and 

Non-Compliance
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AWG Order

• On 31st day or upon receipt of the Hearing Decision, an 

Order is sent to Employer

• Employee certification is returned with employment status

• Non-employed is terminated

• Payment expected within 45 days

• Letter mailed to Employer 60th and 75th days
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AWG Non-Compliance

• Once non-payment reaches the 75th day, action is taken by 

DMS.

• History is reviewed to ensure a payment has not been 

made within the last 30 days; no action is needed

• Employer Certification received but no other information 

received since the original certification was sent, contact 

the employer

• Employers failing or refusing to make payments may be 

referred to FMS legal counsel
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Questions?
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Contact Information

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Debt Research Branch - Hearings

Name: Gale Fortner

Title: Manager

Phone: (512) 342-7324 (Office)

Email: Gale.Fortner@fiscal.treasury.gov

Government-Wide Debt Collection Policy Branch

Name: Alberta Holloway

Title: Manager

Phone: (202) 874-7025 (Office)

Email: Alberta.Holloway@fiscal.treasury.gov

Contact Services Branch - AWG

Name: Wayne Brewster

Title: Manager

Phone: (205) 912-6201 (Office)

Email: Wayne.Brewster@fiscal.treasury.gov
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Thank you!