Federal Administrative Offset Program

New Jersey Judiciary Probation Child Support Enforcement

Revised 7-2015

In this Topic

  1. A. Authority  
  2. B. Overview
  3. C. Selection Criteria
  4. D. Notification of Intent
  5. E. Appeal Procedure
  6. F. PCSE Review of the Appeal

A. Authority  

United States Code:

 42 U.S.C. § 664

Code of Federal Regulations:

45 C.F.R. §,301.1
45 C.F.R. § 303.72
47 C.F.R. § 1:1950-52

Other Authorities:

AOC Memo August 21, 1990
DFD IT No.10-01 Administrative Offset Program

B. Overview

The Federal Administrative Offset Program authorizes the interception of payments to NCPNon-custodial parents acting as private vendors performing work for a government agency [including Medicare and Medicaid payments to physicians], federal retirement payments and relocation and travel reimbursements owed to federal employees in order to satisfy outstanding child support arrears.  The role of PCSEProbation Child Support Enforcement staff is in the review of any appeals filed.  

C. Selection Criteria

 For a case to be selected the following conditions must be met:

  1. there must be an open IV-D case (alimony only cases are not selected because they are non IV-D),
  2. a Social Security Number must exist,
  3. the Tax Exempt code field is blank,
  4. a valid interstate status must be entered (in UIFSAUniform Interstate Family Support Act cases, only the petitioning state has authorization to certify arrears for Federal Administrative Offset),
  5. the NCP must owe combined arrears (TANFTemporary Assistance for Needy Families + NTANF) greater than or equal to $1000 and there has been no regular payment in the last 35 days for arrears only cases,
  6. the combined arrears (TANF + NTANF) are greater than or equal to the three month periodic charge and there has been no regular payment in the last 35 days for currently charging cases.

D. Notification of Intent

The Pre-Offset Notice (Notice) is a letter of intent.  The Notice is generated and mailed by the OCSS to the address provided by the state at the time of submission, not the address on the DEMO screen.  It informs the NCP (and joint-taxpayer) that the case will be submitted to the U.S. Department of Treasury for Administrative Offset and/or Federal Tax Refund Offset unless the full amount of arrears is paid within 30 days of the date of the Notice.

E. Appeal Procedure

The Notice informs the NCP of the procedure for filing an appeal.  

  1. Effective the date of the Notice, the person identified as the NCP has 30 days to submit an appeal in writing to the PCSE Unit supervising the case.   
  2. Appeals must be based on a mistake of fact in order to be considered as valid.  For example:
  1. the person identified in the Notice is not the NCP.
  2. the account does not have arrears.
  3. the arrears are not IV-D arrears.
  4. the NCP produces a valid court order exempting him or her from tax offset.

F. PCSE Review of the Appeal

  1. Upon receipt of the appeal, PCSE staff must open the Administrative Review chain on NJKIDS and will have 30 business days to conduct an Administrative Review.
  2. If the claim is valid, PCSE staff will update the TAXI screen to exempt the case from offset.  Any erroneous information is corrected by PCSE staff so that the case no longer meets the eligibility requirements.  A detailed explanation is made on TAXI Notes.

    1. Note: Only when a court order recommends the case be exempted from reporting should PCSE staff update the TAXI screen utilizing the “Exempt” code. This is because once the “Exempt” code is entered the case is exempted forever. PCSE staff must review the order to determine whether the exemption is intended for future offsets.  If no time frame is provided, staff should enter an end date 90 days from the court order date.  In this way, the case can be selected for future offsets should the arrears qualify.

  3. PSCE staff must notify the NCP, CP, and their attorneys (if represented by one) within 10 business days of the time, date and place of the Administrative Review.
  4. Appeals that appear to have issues too complex to resolve through an Administrative Review, such as an arrears dispute, should be scheduled before a CSHOChild Support Hearing Officer.
  5. In Interstate (UIFSA) matters the appeal must be heard in the state where the support order was entered. In such cases, PCSE staff must notify the other intergovernmental agency (central registry) through a CSENet transaction and provide that office with copies of all court orders and payment records.   
  6. If it is concluded after the Administrative Review and/or hearing that the case does qualify for Administrative Offset, PCSE staff does not need to take further action.

    1. Note: If a NCP is not satisfied with the results of the Administrative Review and hearing, he or she has the option to file an application with the Family Division.

  7. If it is concluded after the Administrative Review or hearing that the case does not qualify, PCSE staff updates the TAXI screen and provides a detailed explanation on TAXI Notes.

The following federal payments are currently included in administrative offset:

  • Vendor and miscellaneous payments (e.g., expense reimbursement payments and travel payments)
  • Federal retirement payments

Currently, FMS is offsetting retirement pay at a rate of 25%. Vendor payments and income tax refunds can be offset at 100%. Under the Consumer Credit Protection Act, salaries, including federal salaries for administrative offset purposes, may be offset at the following percentages:

  • 50% if the obligor has a second family and is less than 12 weeks in arrears
  • 55% if the obligor has a second family and is at least 12 weeks in arrears
  • 60% if the obligor does not have a second family and is less than 12 weeks in arrears
  • 65% if the obligor does not have second family and is at least 12 weeks in arrears

The limits are reduced by the amount of any deductions in pay resulting from a support garnishment. For example, if 40% of the salary is being withheld under a support garnishment, only 10% would be available for offset if the obligor has a second family and is less than 12 weeks in arrears. If there is an income withholding in place, states should exclude the case from salary offset. The administrative offset program is not a substitution for such procedures.

Payments that cannot be intercepted.

Payments that cannot be intercepted through this program include VA disability benefits, federal student loans, some Social Security payments, Railroad Retirement payments, Black lung benefits, and payments made under certain programs based on financial need, such as SSI.

For additional information and guidance on the Administrative Offset Program, please see Informational Transmittal 10-01.

 

 

Institute for Families, School of Social Work  Rutgers, the State University of New Jersey Judiciary Probation Child Support Enforcement

New Jersey Judiciary Probation Child Support Enforcement, revised 7-2015