Vol 1 - Part 3 - Chapter 7000 (T/L 547) ALLOTMENTS AND ASSIGNMENTS OF PAY This chapter prescribes the requirements and procedures relating to the establishment, maintenance, and termination of allotments of pay of Federal employees. The chapter also provides the order of precedence for deductions when the gross pay of an employee is not sufficient to permit all of the deductions authorized by the employee. Section 7010 - Authority The authority for the policies and procedures in this chapter is provided by the following sections of the United States Code (USC): 5 U.S.C. 5525 (Discretionary Allotments) 5 U.S.C. 659 (Garnishments for Child Support and Alimony) 5 U.S.C. 5520a (Commercial Garnishments of Pay) 11 U.S.C. 1301 (Court-ordered Bankruptcy Payments) The order of precedence for payroll deductions is established by the General Accounting Office (GAO) in Title 6 of the GAO Manual. Section 7015 - Definition of Terms Allotment - A recurring specified apportionment from pay for a legal purpose authorized by an employee to be paid to an allottee. Allottee - The person or institution to whom an allotment is made payable. Deductions - Allotments or apportionments from an employee of a Federal Government agency to be paid to a specified allottee. Direct Deposit - A Federal Government payment program for individuals, firms, and other entities who authorize the deposit of payments automatically into a checking or savings account. Discretionary Allotment - An allotment of pay which is not authorized by any statutes of law and is deemed appropriate by the head of the agency. A discretionary allotment is an amount that a Federal Government employee is permitted by the employing Federal agency to direct voluntarily to be deducted from his or her net salary amount and paid to another party. The aggregate amount of discretionary allotments may not exceed the net pay due the employee for each pay period after all deductions required by law are subtracted. Electronic Funds Transfer (EFT) - A system using electronic means to transfer payment data and funds from an originator to a recipient's account at a receiving financial institution. Section 7020 - Authorization by Employee The employee will give written authorization for making, changing, or discontinuing deductions from the employee's salary for allotments. The authorization will specifically state the name and address of the allottee and the purpose for which the allotment is being made. For court ordered allotments, the employee does not give authorization for the garnishment of pay. However, the agency's payroll office will notify the employee of the garnishment orders. A copy of the garnishment order served upon the agency will be provided to the employee. Section 7025 - Order of Precedence for Deductions from Salary/Wages If the gross salary of an employee is not sufficient to permit all deductions to be made, deductions will be made in the following order of precedence: (1) Retirement and Medicare or FICA. (2) Federal income taxes. (3) Health benefits. (4) Group life insurance basic. (5) State income taxes. (6) Local income taxes. (7) Indebtedness due the United States Government. (8) Court-ordered garnishments for alimony and child support payments. (9) Commercial garnishments. (10) Voluntary alimony or child support payments. (11) Court-ordered bankruptcy payments under Chapter 13 of the Revised Bankruptcy Act, 11 U.S.C. 1301 (Public Law 95-598). Under the Act, orders issued by U.S. Bankruptcy Courts are enforceable against the United States. As a general matter, placing payments ordered by the Bankruptcy Court in position (11) of the order of precedence should conform with the requirements of the Bankruptcy Courts. Agencies should attempt to comply with the orders of the Bankruptcy Courts. For instance, if an order of the Bankruptcy Court specifies a different order of precedence, the order should be followed. Similarly, if the Bankruptcy Court mandates that a sum be deducted monthly, rather than each pay period, the order should be followed. If there is a question of conflict or nonpayment, payroll offices should contact the designated standing trustee by telephone. (12) Optional life insurance. (13) Voluntary repayments of indebtedness to the United States. (14) Other voluntary deductions, including allotments in the order determined by the paying agency. Section 7030 - Accounting for Allotments and Assignments The amount deducted each pay period for allotments will be recorded on the employee's individual earnings record or its equivalent. Each agency will maintain adequate controls to ensure the accuracy of the deductions. The allotments of pay will be scheduled on the same magnetic tape or file transmission as regular net pay, payments to financial institutions, and other deductions. The payment for the deductions and allotments will be made from the same appropriation as the payroll. Section 7035 - Notification to Allottees - Pledges to Combined Charity Drives Authorization forms in standard format printed and distributed by the combined charity organization will be used in implementing the instructions of OPM for the authorization and revocation of payroll deductions for a payment of pledges to combined charity drives. The payments for these charitable contributions are sent to local charity organizations authorized by OPM to administer these contributions. These payments to the local charity organization must be accompanied by a statement which contains the number of employees for whom the payment is being made, the total dollar value of the payment, and the agency name. EFT is the preferred method of payment. If the payment is paid via EFT, the statement will accompany the payment as an addendum record. If the payment is made by check, the statement does not need to be enclosed with the check, should this prove to be technologically infeasible or prohibitive for individual payroll offices. However, the statement should be received by the local charity organization at approximately the same time the check is received. The agency name should also appear on the check itself. The names (unless specifically authorized by the individual employees) or social security number of individual employees and the amounts of their contributions should not be given to the charitable allottees. The disclosure of such information may constitute a violation of the Privacy Act of 1974, 5 USC 5522a. Section 7040 - Other Voluntary Allotments Except as indicated in this section, OPM or the head of the agency will determine the procedures and forms necessary to allow the following allotments of pay from employees. 7040.10 - Employee Organization Dues SF 1187: Request for Payroll Deductions for Labor Organization Dues, and SF 1188: Cancellation of Payroll Deductions for Labor Organization Dues, will be used in implementing the instructions of OPM for the authorization and revocation of payroll deductions for payment of employee organization dues. The payment of these dues to the employee organization will be issued via Direct Deposit/Electronic Funds Transfer (DD/EFT). 7040.20 - Allotments for Payment of Dues to Associations of Management Officials or Supervisors Agencies may deduct regular and periodic dues of an association of management officials or supervisors from the pay of members of the association who make a voluntary allotment for that purpose. This is authorized when the agency and the association agree in writing to this course of action. The payment of these dues to the association will be issued via DD/EFT. Reimbursement for cost of these allotments may be made according to section 7045. 7040.30 - Discretionary Allotments The head of the agency may permit employees to make an allotment for any legal purpose considered appropriate by the head of the agency. If a discretionary allotment is to be directed to a financial institution on behalf of the allottee, agencies should instruct employees to complete an SF 1199A: Direct Deposit Sign-Up Form, or a FASTSTART Direct Deposit Sign-Up Form or other approved forms at the agency's personnel office. All attempts should be made to issue discretionary allotments using DD/EFT. However, if this is not possible, a check may be issued directly to the allottee. Section 7045 - Reimbursement for Certain Allotments The employee organization and the combined charity organization will be charged a fee in an amount specified by OPM. The amounts collected will be deposited to the miscellaneous receipt account -2412, "Fees and Other Charges for Accounting and Auditing Services." For further information concerning reimbursement for allotments, contact OPM. (See Contacts page.) Section 7050 - Method of Paying Allotments For all deductions of pay, the preferred method of payment is EFT. For further information regarding payments made by EFT, refer to the appropriate TFM chapter on EFT. If EFT is technologically or operationally impossible, a check payment will be made to the allottee. CONTACTS Questions concerning voluntary allotments should be directed to: Office of Personnel Management Compensation Administration Division 1900 E Street, NW. Washington, DC 20415 (Telephone 202-606-2858) Other questions concerning this chapter should be directed to: Payments Services Branch Financial Management Service Department of the Treasury Liberty Center, Room 324 Washington, DC 20227 (Telephone 202-874-6810)