Administrative Offset of Economic Recovery Payments
DATE: March 26, 2009
TO: State Agencies Administering Child Support Enforcement Plans Under Title IV-D of the Social Security Act and Other Interested Individuals
SUBJECT: Administrative Offset of Economic Recovery Payments
On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (Act). The Act, in part, provides one-time Economic Recovery payments (ERP) of $250 to an estimated 60 million recipients of Social Security (SSA), Supplemental Security Income (SSI), Railroad Retirement Benefits (RRB), and Veterans’ Disability Compensation or Pension Benefits. Treasury’s Financial Management Service (FMS) will certify and issue these payments.
Under the normal administrative offset process, certain types of Federal payments are, by law, exempt from intercept, such as VA disability and pension benefits, SSI benefits, and Tier II Railroad benefit payments. There also are similar exemptions for garnishment of Federal payments such as SSI and certain SSA and VA benefits. However, under Title II, Subtitle C, Section 2201 of the Act – Economic Recovery Payments to Certain Individuals – the ERP are not considered a benefit payment or cash benefit and all amounts paid are subject to offset to collect delinquent debts. The full version of the Act, including the final conference report that contains this provision, is available at http://thomas.loc.gov.
All payments eligible for offset under the Debt Collection Improvement Act (DCIA), other than Federal tax refunds, are categorized as administrative offsets. Federal payments currently included in the administrative offset program are identified as either vendor/miscellaneous (e.g., non-retirement Federal payments such as expense reimbursements) or Federal retirement payments. The Federal Office of Child Support Enforcement (OCSE) will code ERP offsets as vendor/miscellaneous (or VEN) on your State’s bi-weekly Federal offset collection and adjustment file. FMS will administer the same $17.00 fee per ERP offset as it does for other administrative offsets.
Cases certified at FMS with arrears of at least $25 will automatically be eligible for ERP intercept. No additional programming is required. Although these payments are considered to be administrative offsets, your State may offset ERP even if you do not participate or certify debts for the administrative offset program. It is not necessary to remove existing administrative offset and/or vendor/miscellaneous exclusion indicators from debts in order to make them eligible for ERP offset.
The only requirement for eligibility is that the noncustodial parent must have received due process (i.e., a pre-offset notice) regarding his/her potential for intercept through the administrative offset program. OCSE-issued pre-offset notices already contain this language.
If your State does not wish to offset these one-time ERP, FMS will place ERP offset exclusions on your State’s debts blocking any potential ERP offset match from occurring. Please note that if your State chooses this option, FMS will exclude all certified debts. Due to the programming required and the very short timeframe for processing, FMS does not have the capability to block a specific type of recipient payment or group of obligors from offset.
Immediately following the release of this Action Transmittal, an email will be sent to all State IV-D Directors and offset coordinators requesting confirmation regarding whether its State wishes to opt in or opt out of offsetting ERP. All responses must be provided by your State’s Director or designee and submitted to OCSE no later than April 17, 2009.
Our understanding from FMS is that ERP processing will begin in late April starting with SSA recipients, which will comprise an estimated 47 million payments. This means that ERP offsets could be reported to OCSE beginning as early as the first or second week of May. Events on this matter are moving quickly, and we are working with FMS regularly to confirm additional details. We will continue to provide information through future correspondence and/or scheduled Federal offset conference calls as it becomes available.
If you need more information regarding the intercept of these payments or have concerns regarding the ERP offset process, please email us at firstname.lastname@example.org.
Donna J. Bonar
Office of Child Support Enforcement
cc: ACF/OCSE Regional Program Managers
Tribal IV-D Directors