(a) Whenever feasible, and except as otherwise provided by law,
debts owed to the United States, together with interest, penalties, and
administrative costs should be collected in full in one lump sum. This
is true whether the debt is being collected by salary offset or by
another method, including voluntary payment. However, if the debtor is
financially unable to pay the indebtedness in one lump sum, or the
amount of the debt exceeds 15 percent of disposable pay for an
officially established pay interval, collection must be made in
installments. Ordinarily, the size of installment deductions must bear a
reasonable relationship to the size of the debt and the employee's
ability to pay. However, the amount deducted for any period must 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.
Installment deductions must be made over a period not greater than the
anticipated period of active duty or employment, as the case may be
except as provided in Sec. 20.84 paragraphs (c) and (d). Where a DOL
agency is the paying agency, salary offset will ordinarily begin with
the salary payment made to the employee for the first full pay period
following expiration of the 30 day notice period described in
Sec. 20.78(b), or if a hearing is pending under Sec. 20.81, the first
full pay period following the date of the administrative law judge's
written decision.
(b) If the debtor owes more than one debt and designates how a
voluntary installment payment is to be applied as among those debts,
that designation must be followed. If the debtor does not designate the
application of the payment, agencies should apply payments to the
various debts in accordance with the best interests of the United
States, as determined by the facts and circumstances of the particular
case, paying special attention to applicable statutes of limitations.
(c) If the employee retires or resigns or if his or her employment
or period of active duty ends before collection of the debt is
completed, under 5 U.S.C. 5514, salary offset shall be from subsequent
payments of any nature (e.g., final salary payment, lump-sum leave,
etc.) due the employee from the paying agency as of the date of
separation to the extent necessary to liquidate the debt.
(d) If the debt cannot be liquidated by salary offset from any final
payment due the former employee as of the date of separation, under 5
U.S.C. 5514, administrative offset shall be from later payments of any
kind due the former employee from the United States.
