TN 22 (11-07)

A. Authority

1. United States Code

SSA’s authority to terminate and suspend collection action is granted by Chapter 37, subchapter II, of title 31, United States Code (USC) section 3711 Collection and Compromise. This section of the statute permits executive, judicial, or legislative agencies to terminate or suspend collection action when it appears the debtor cannot repay or the cost of collection is likely to be more than the amount recovered.

2. Federal Claims Collection Standards

More specific authority and guidance are provided to SSA and other agencies by the Federal Claims Collection Standards (FCCS), which are regulations written by Department of the Treasury and Department of Justice (DOJ). Those regulations are in 31 Code of Federal Regulations (CFR), Chapter IX, Part 903, “Standards for Suspending or Terminating Collection Activity.” Among other things, 31 CFR Part 903 states that agencies may terminate collection activity when the agency is unable to collect any substantial amount, the agency cannot locate the debtor, or costs of collection are expected to exceed the amount recoverable.

3. Office of Management and Budget (OMB) Circular

In addition to the preceding authorities, SSA adheres to the policy stated in OMB Circular Number A-129, “Policies for Federal Credit Programs and Non-Tax Receivables.” Appendix A, Section V.5., “Termination of Collection, Write-off, Use of Currently Not Collectible (CNC), and Close-Out” contains the policy. This section essentially states that write-off is mandatory for debts that are at least two years delinquent unless documented and justified to OMB in consultation with Treasury.

B. Definitions

1. Termination of Collection Action

This is a decision to cease SSA’s “active” collection action on a debt because any one or more of the conditions in GN 02215.235C.2. are met. Active collection is a mandatory debt collection process. It generally consists of the billing and dunning notices sent by the Recovery and Collection of Overpayment Process (RECOOP) system, telephone calls made by employees of the Debt Management Sections (GN 02210.212 – GN 02210.217), and actions pursuant to the Recovery of Overpayment, Accounting and Reporting (ROAR) and Supplemental Security Record (SSR) system diary alerts and notices.

Even though SSA terminates collection action by stopping its internal efforts, it may still use Treasury Offset Program (TOP) / External Collection Operation (ECO) tools such as:

1. Tax Refund Offset (see GN 02201.030 and SI 02220.012);

2. Administrative Offset (see GN 02201.031 and SI 02220.013);

3. Credit Bureau Reporting (see GN 02201.032 and SI 02220.014);

4. Administrative Wage Garnishment (AWG) (see GN 02201.040 - GN 02201.042 and SI 02220.018); and

5. Federal Salary Offset (see GN 02201.043 - GN 02201.044 and SI 02220.019).

NOTE: If the debtor becomes entitled to Social Security benefits or Supplemental Security Income (SSI) cash payments, SSA will resume benefit withholding or begin cross-program recovery. See SI 02220.020 – SI 02220.022 for an explanation of cross-program recovery.

2. Suspension of Collection Action

This is an overt decision to temporarily cease SSA’s “active” collection action on a debt because any one or more of the conditions in GN 02215.235C.1. are met. In the case of suspension of collection efforts, SSA expects to resume collection action within 6 months.

Examples of reasons to suspend collection include but are not limited to:

1. debtor who has no present income but is expecting a large inheritance within 6 months;

2. person who has suffered a hardship due to a natural disaster such as a hurricane.

3. Delinquent Debt

a. Debt is Considered Delinquent

A debt is delinquent when no voluntary payment has been made 30 days after the latest of the following:

• The date the debt was established on the ROAR system (Title II debts); or

• The date of the initial overpayment notice for a debt established on the SSR (Title XVI debts); or

• The date of the last voluntary payment; or

• The date of an installment or periodic payment arrangement (if no payment is received); or

• The date of an affirmation decision on a reconsideration request; or

• The date of a denial decision on a request for waiver.

IMPORTANT: Any collections received from ECO/TOP, ECO/AWG or DOJ are not considered voluntary repayments. These are considered enforced collections.

b. Debt is Not Considered Delinquent

A debt is not considered delinquent when:

• Waiver request pending;

• Reconsideration request pending;

• Request for review in response to the ECO notice or request for reduction of withholding for hardship under procedures applicable to AWG or FSO is pending;

• Debtor in current pay status; i.e., ledger account file code C (LAF C) or LAF E for Title II or Payment Status Code C01 for Title XVI;

• Debtor in deferred pay status; i.e., LAF D for Title II or Payment Status Code H for Title XVI;

• Debtor in suspended pay status; i.e., LAF S for Title II or Payment Status Code S for Title XVI.

4. Write-off

This is an accounting action that results in removing the debt from SSA’s accounts receivable balance. Write-off is accomplished by waiver approval, termination of collection action, or (for SSI only) recording an uncollectible overpayment decision.

• Waiver is a permanent write-off, and the waived amount cannot be subsequently collected by any means.

• Termination of collection action is a temporary or conditional write-off in that the debt remains on the person’s record to be collected by appropriate and available methods in the future.

• The SSI uncollectible overpayment decision is similar to a waiver approval in that it is treated as a permanent write-off.

C. Policy — General

NOTE: This policy section is intended as general guidance for Title II and Title XVI debts. For policy not covered in this section, consult the POMS specific to your situation.

1. Suspension of Collection Action

Suspension of collection action on a debt is appropriate in the following situations:

a. Financial Hardship

Due to financial hardship the debtor cannot currently repay but the financial situation is expected to improve within six months.

SSA may suspend collection action for a maximum of six months. Terminate collection action if repayment will not begin within six months.

b. The Debtor Files A Petition For Bankruptcy

Suspension of collection action or waiver of the debt amount is done automatically by SSA’s systems depending upon the type of input made. If collection is suspended the six month criterion does not apply and the duration of the suspension is dependent on factors outlined in GN 02215.190 and GN 02215.195 for Title II debts and SI 02220.040 for Title XVI debts.

c. The Debtor Requests Waiver, Reconsideration or Other Applicable Review of The Debt

Suspension of collection action is done automatically by SSA’s systems. The six month criterion does not apply, and the suspension will last as long as the due process request is unresolved.

2. Termination of Collection Action

SSA may terminate collection action in accordance with the authorities described in GN 02215.235A. Those authorities allow SSA to terminate collection action when any one or more of the following conditions exist:

a. Debtor Cannot or Will Not Repay the Debt

If after taking into consideration the possibilities of compromise settlement (GN 02215.100 and SI 02220.030) and civil suit (GN 02215.150 and SI 02220.035) SSA cannot collect a significant portion of the overpayment, terminate collection action.

Consider the following when determining whether SSA can recover the overpayment:

• Age and health of debtor; and

• Current and potential income; and

• The availability of assets or income which may be realized by civil suit; and

• The possibility that assets may have been concealed or improperly transferred by the debtor; and

• Inheritance prospects.

b. Debtor cannot be Located after Diligent Search

See GN 02210.213 and SI 02220.051 for instructions on locating a debtor who moved and left no forwarding address.

c. Collection is too Expensive

The cost of further efforts is likely to exceed the amount recovered.

d. Debt Is At Least Two Years Delinquent

OMB’s policy is that write-off is mandatory for debts that are at least two years delinquent. A debt is two years delinquent when no voluntary payment has been made 25 months after the latest of the following:

• The date the debt was established on the ROAR system (Title II debts); or

• The date of the initial overpayment notice for a debt established on the SSR (Title XVI debts); or

• The date of the last voluntary payment; or

• The date of an installment or periodic payment arrangement (if no payment is received); or

• The date of an affirmation decision on a reconsideration request; or

• The date of a denial decision on a request for waiver.

SSA accomplishes the write-off by terminating collection activity.

IMPORTANT: OMB’s policy for mandatory write-off does not apply to debts that are in bankruptcy proceedings or debts that have been referred to DOJ.

NOTE: Due diligence is required in the collection of delinquent debts before they are written off. For all delinquent debts, due diligence comprises issuing a full cycle of RECOOP demand letters. In addition, as specified in GN 02210.212.A.2, some debts also require one of the following before the due diligence requirement has been satisfied:

• Subsequent Debt Collection Representative (DCR) follow-up action in which the DCR attempts to collect the debt by telephone contact.

• Another full cycle of RECOOP demand letters.

A full cycle of RECOOP demand letters comprises (regardless of lump-sum or installment billing):

1. Initial Bill,

2. Did You Forget? Bill,

3. Past Due Payment Bill, and

4. Call-In Letter.

If there is no response from the debtor fifteen days after the initial RECOOP Call-In Letter is sent, a RECOOP 00100 alert (MSOM DMS 010.001D) is automatically generated to contact the debtor by telephone.

See GN 02210.212A.2. for general instructions on how to process RECOOP 00100 alerts

NOTE: If an automated process has terminated collection action on a debt, the debt status line will contain a remark indicating the termination was through an automated process. No further recovery action is necessary unless collection should be resumed by the factors outlined in GN 02215.235C.6.

3. Suspension or Termination of Collection Action on Debts less than $20,000.00 — No Fraud Involved

1. Authority to suspend or terminate collection action on Title II debts less than $20,000.00 resides with the following job positions:

   • Deputy Commissioner for Operations

   • Deputy Commissioner for Disability and Income Security Programs

   • Associate Commissioner, Income Security Programs

   • Assistant Regional Commissioner for Processing Center Operations

   • Assistant Associate Commissioner for Disability Operations

   • Director, Office of Disability and International Operations

   • Manager, Debt Management Section in Program Service Center

   • Debtor Contact Representative in the Debtor Contact Unit

   • Debt Specialist in the Debt Management Section

   • Claims Authorizer in Program Service Center

2. Authority to suspend or terminate collection action on Title XVI debts less than $20,000.00 resides with the following job positions (see also SI 02220.005C.6.):

   • Assistant Regional Commissioner for Management Operations Support

   • Assistant Regional Commissioner for Processing Center Operations

   • Operations Supervisor

   • Management Support Specialist

   • Claims Representative (debt amount $2,000.00 or less)

   • Service Representative (debt amount $2,000.00 or less)

   • Teleservice Representative (debt amount $2,000.00 or less)

   IMPORTANT: At no time may debts be subdivided to avoid the established monetary ceiling. The full liability of the debtor, regardless of whether the total outstanding debt originated from separate overpayments, must be considered when determining the authority to suspend or terminate.

4. Suspension or Termination of Collection Action on Debts that do not exceed $100,000.00 — No Fraud Involved

SSA has the authority to suspend or terminate collection action on debts that do not exceed $100,000.00. In accordance with 31 USC 3711, the head of an agency (including the Commissioner of Social Security (COSS)) may suspend or terminate collection action on a debt of $100,000.00 or less, exclusive of interest.

COSS delegated that authority to suspend or terminate collection actions for overpayment debts in the $20,000.00 through $100,000.00 range to the Deputy Commissioner for Operations (DCO) and allowed that position to make further re-delegations. The following positions have been granted authority by DCO to suspend or terminate collection actions for Title II debts in the $20,000.00 through $100,000.00 range:

• Assistant Regional Commissioner for Processing Center Operations

• Assistant Associate Commissioner for Disability Operations

• Director, Office of Disability and International Operations

The following positions have been granted authority by DCO to suspend or terminate collection actions for Title XVI debts in the $20,000.00 through $100,000.00 range (see also SI 02220.005C.6.):

• Assistant Regional Commissioner for Management and Operations Support

• Assistant Regional Commissioner for Processing Center Operations

IMPORTANT: At no time may debts be subdivided to avoid the established monetary ceiling. The full liability of the debtor, regardless of whether the total outstanding debt originated from separate overpayments, must be considered when determining the authority to suspend or terminate.

5. Suspension or Termination of Collection Action on Debts that Involve Fraud or Exceed $100,000.00

a. Debts Greater than $100,000.00

SSA does not have authority to suspend or terminate collection action if the overpayment, exclusive of interest, exceeds $100,000.00. In accordance with the Federal Claims Collection Standards, debts greater than $100,000.00 must be referred to DOJ when a decision on whether or not to suspend or terminate collection action is needed. See GN 02215.235D.1. for instructions on how to refer debts greater than $100,000.00 to DOJ.

IMPORTANT: At no time may debts be subdivided to avoid the established monetary ceiling. The full liability of the debtor, regardless of whether the total outstanding debt originated from separate overpayments, must be considered when determining the authority to suspend or terminate.

b. Debt Involves Fraud

SSA does not have authority to suspend or terminate collection of a debt resulting from fraud, regardless of amount. Debts resulting from fraud must be sent to DOJ for approval to suspend or terminate collection action (see GN 02215.235D.2.).

6. Future Collection Action

SSA may continue or resume collection action to recover a debt that was previously written off in a termination of collection action. Generally, continuation or resumption of collection action will occur in the following three scenarios:

a. TOP/ECO

TOP/ECO refers to the five current components of ECO (SM 00610.040): Tax Refund Offset, Administrative Offset, Administrative Wage Garnishment, Credit Bureau Reporting, and Federal Salary Offset. Debts that are written off by Termination of Collection action remain eligible for any TOP/ECO tools for which they meet the applicable criteria.

b. Billing and Follow-up

Billing and follow-up via the RECOOP system can resume on debts that were previously written off. In cases where debtors choose to resume or start making regular payments in reaction to TOP/ECO notices, the RECOOP system will generate monthly bills and notices.

c. Recovery from Benefits

An overpayment for which collection efforts are terminated remains subject to recovery (e.g., from future benefits payable to the debtor, or (for Title II debts) from any other person on the same earnings record, or by cross-program recovery from other benefits payable to the debtor). See GN 02215.250, SI 02220.015 and SI 02220.020 – SI 02220.022 for more information.

7. Documenting and Justifying to OMB

OMB Circular Number A-129 states: “Generally, write-off is mandatory for delinquent debt older than two years unless documented and justified to OMB in consultation with Treasury.” The requirement to document and justify non-write-off does not apply to SSA employees and Operations offices responsible for collecting and resolving delinquent debts.

D. Procedure

NOTE: Suspend or terminate collection action according to MSOM DMS 007.004 and MSOM DMS 007.003 respectively for Title II debts and SM 01311.200 for Title XVI debts. Please note that this procedure is general guidance for Title II and Title XVI debts. For procedure not covered in this section, consult the POMS specific to your situation.

1. Referral to Department of Justice (DOJ)

Use the Record DOJ Referral (DFRF) screen for Title II debts and the Overpayment Decisions (UOPD) screen for Title XVI debts to record the referral of a debt to DOJ for a decision on suspension or termination of collection efforts (see MSOM DMS 007.008 and MSOM BUSSR 004.008 for detailed information about these inputs). Use the Claims Collection Litigation Report (CCLR) (GN 02215.168) to forward the claim to DOJ for authorization to suspend or terminate collection action.

Send the CCLR to:

2. Debts involving fraud—ANY AMOUNT

Follow these instructions to obtain authorization to suspend or terminate collection action on Title II and Title XVI debts where fraud has already been proven (GN 02201.055):

a. FO

If the FO has a Title II debt involving fraud, send it to the Payment Center (PC) of jurisdiction (the PCOCS on the MBR) for subsequent handling. The PC of jurisdiction will take action to send the case to DOJ for authorization to suspend or terminate collection action.

If the FO has a Title XVI debt involving fraud, send it to the Regional Office (RO) of jurisdiction for subsequent handling. The RO of jurisdiction will take action to send the case to DOJ for authorization to suspend or terminate collection action.

b. PC or RO

Follow the instructions in GN 02215.235D.1. with the following exception:

Send the CCLR to: