Authority given to doc pay of former feds that owe money to TSP

A new regulation will allow the Federal Retirement Thrift Investment Board to order a non-federal employer to withhold up to 15 percent of a former federal employee’s disposable income to pay a delinquent debt to the Thrift  Savings Plan.

Barring any other action, the new garnishment policy is slated to take effect May 27, according to the Federal Register notice that announced the rule

The new rule draws its authority from the 1996 Debt Collection Improvement Act, which authorizes federal agencies to use wage garnishment to collect debts owed to them. Before the law was enacted, agencies needed to obtain a court order to garnish the wages of non-federal employees.

Under the process, an agency is required to provide the debtor with at least 30 days’ advance written notice concerning the nature and amount of the debt, and of the agency’s intention to garnish wages to collect it. The debtor has the right to request a hearing concerning the debt and the terms of repayment.

An agency is not allowed to garnish wages of a former employee who has been involuntarily separated from employment until that person has been reemployed continuously for at least 12 months.

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