(a) General Provisions for Offset. DHS will collect debts by administrative offset pursuant to 31 CFR parts 900-904.
(b) Centralized Offset through the Treasury Offset Program. DHS adopts the provisions of 31 CFR 901.3.
(c) Non-centralized Offset for DHS Debts. When centralized offset is not available or appropriate, DHS may collect delinquent DHS debts through non-centralized offset. In these cases, DHS may offset a payment internally or make a request directly to a Federal payment agency to offset a payment owed to the debtor. Before requesting a payment authorizing agency to conduct a non-centralized administrative offset, DHS will provide the debtor with the due process set forth in 31 CFR 901.3(b)(4) and the notice requirements of 31 CFR 901.2 (unless the due process and notice requirements are not required under that part). DHS will provide the payment authorizing agency written certification that the debtor owes the past due, legally enforceable delinquent debt in the amount stated, and that DHS has fully complied with its regulations concerning administrative offset.
(d) Hearing Procedures for Federal Employees—(1) Request for a hearing. A Federal employee who has received a notice that his or her DHS debt will be collected by means of salary offset may request a hearing concerning the existence or amount of the debt. The Federal employee also may request a hearing concerning the amount proposed to be deducted from the employee's pay each pay period. The employee must send any request for hearing, in writing, to the office designated in the notice described in section 11.4(c). The request must be received by the designated office on or before the 15th calendar day following the employee's receipt of the notice. The employee must sign the request and specify whether an oral or paper hearing is requested. If an oral hearing is requested, the employee must explain why the matter cannot be resolved by review of the documentary evidence alone. All travel expenses incurred by the Federal employee in connection with an in-person hearing will be borne by the employee.
(2) Failure to submit timely request for hearing. If the employee fails to submit a request for hearing within the time period described in paragraph (d)(1) of this section, the employee will have waived the right to a hearing, and salary offset may be initiated. However, DHS should accept a late request for hearing if the employee can show that the late request was the result of circumstances beyond the employee's control or because of a failure to receive actual notice of the filing deadline.
(3) Hearing official. DHS must obtain the services of a hearing official who is not under the supervision or control of the Secretary. The DHS Chief Financial Officer will coordinate DHS efforts to obtain the services of a hearing official.
(4) Notice of hearing. After the employee requests a hearing, the designated hearing official informs the employee of the form of the hearing to be provided. For oral hearings, the notice sets forth the date, time and location of the hearing. For paper hearings, the notice provides the employee the date by which he or she should submit written arguments to the designated hearing official. The hearing official gives the employee reasonable time to submit documentation in support of the employee's position. The hearing official schedules a new hearing date if requested by both parties. The hearing official gives both parties reasonable notice of the time and place of a rescheduled hearing.
(5) Oral hearing. The hearing official conducts an oral hearing if he or she determines the matter cannot be resolved by review of documentary evidence alone (for example, when an issue of credibility or veracity is involved). The hearing need not take the form of an evidentiary hearing, but may be conducted in a manner determined by the hearing official, including but not limited to:
(i) Informal conferences with the hearing official, in which the employee and agency representative will be given full opportunity to present evidence, witnesses and argument;
(ii) Informal meetings with an interview of the employee by the hearing official; or
(iii) Formal written submissions, with an opportunity for oral presentation.
(6) Paper hearing. If the hearing official determines an oral hearing is not necessary, he or she makes the determination based upon a review of the available written record, including any documentation submitted by the employee in support of his or her position.
(7) Failure to appear or submit documentary evidence. In the absence of good cause shown (for example, excused illness), if the employee fails to appear at an oral hearing or fails to submit documentary evidence as required for a paper hearing, the employee waives the right to a hearing, and salary offset may be initiated. Further, the employee is deemed to admit the existence and amount of the debt as described in the notice of intent to offset. If a DHS representative does not appear at an oral hearing, the hearing official shall proceed with the hearing as scheduled, and make his or her determination based upon the oral testimony presented and the documentary evidence submitted by both parties.
(8) Burden of proof. DHS has the initial burden to prove the existence and amount of the debt. Thereafter, if the employee disputes the existence or amount of the debt, the employee must prove by a preponderance of the evidence that no debt exists or that the amount of the debt is incorrect. In addition, the employee may present evidence that the proposed terms of the repayment schedule are unlawful, would cause a financial hardship to the employee, or that collection of the debt may not be pursued due to operation of law.
(9) Record. The hearing official maintains a summary record of any hearing provided by this subpart. Witnesses testify under oath or affirmation in oral hearings.
(10) Date of decision. The hearing official issues a written opinion stating his or her decision, based upon documentary evidence and information developed at the hearing, as soon as practicable after the hearing but not later than 60 days after the date on which the request for hearing was received by DHS. If the employee requests a delay in the proceedings, the deadline for the decision may be postponed by the number of days by which the hearing was postponed. When a decision is not timely rendered, DHS waives penalties applied to the debt for the period beginning with the date the decision is due and ending on the date the decision is issued.
(11) Content of decision. The written decision includes:
(i) A statement of the facts presented to support the origin, nature, and amount of the debt;
(ii) The hearing official's findings, analysis, and conclusions; and
(iii) The terms of any repayment schedules, if applicable.
(12) Final agency action. The hearing official's decision is final.
(f) Waiver not precluded. Nothing in this subpart precludes an employee from requesting waiver of an overpayment under 5 U.S.C. 5584 or 8346(b), 10 U.S.C. 2774, 32 U.S.C. 716, or other statutory authority.
(g) Salary offset process—(1) Determination of disposable pay. The Chief Financial Officer consults with the appropriate DHS payroll office to determine the amount of a DHS employee's disposable pay and will implement salary offset when requested to do so by a DHS component or another federal agency. If the debtor is not employed by DHS, the agency employing the debtor will determine the amount of the employee's disposable pay and implement salary offset upon request.
(2) Amount of salary offset. The amount to be offset from each salary payment will be up to 15 percent of a debtor's disposable pay, as follows:
(i) If the amount of the debt is equal to or less than 15 percent of the disposable pay, such debt generally is collected in one lump sum payment; or
(ii) Installment deductions are made over a period of no greater than the anticipated period of employment. An installment deduction will not exceed 15 percent of the disposable pay from which the deduction is made unless the employee has agreed in writing to the deduction of a greater amount or the creditor agency has determined that smaller deductions are appropriate based on the employee's ability to pay.
(3) Final salary payment. After the employee has separated either voluntarily or involuntarily from the payment agency, the payment agency may make a lump sum deduction exceeding 15 percent of disposable pay from any final salary or other payments pursuant to 31 U.S.C. 3716 in order to satisfy a debt.
(h) Payment agency's responsibilities. (1) As required by 5 CFR 550.1109, if the employee separates from the payment agency from which DHS requested salary offset, the payment agency must certify the total amount of its collection and notify DHS and the employee of the amounts collected. If the payment agency is aware that the employee is entitled to payments from the Civil Service Retirement Fund and Disability Fund, the Federal Employee Retirement System, or other similar payments, it must provide written notification to the agency responsible for making such retirement payments that the debtor owes a debt, the amount of the debt, and that DHS has complied with the provisions of this section. DHS must submit a properly certified claim to the new payment agency before the collection can be made.
(2) If the employee is already separated from employment and all payments due from his or her former payment agency have been made, DHS may request that money due and payable to the employee from the Civil Service Retirement Fund and Disability Fund, the Federal Employee Retirement System, or other similar funds, is administratively offset to collect the debt. Generally, DHS will collect such monies through the Treasury Offset Program as described in this section.
(3) When an employee transfers to another agency, DHS should resume collection with the employee's new payment agency in order to continue salary offset.
