SUBJECT:

Kate McBride,

Social Security Administraation.

DECISION

I sustain the determination of the Social Security Administration (SSA) to garnish the wages of Petitioner, Kate McBride.

I. Background

Petitioner was employed by SSA. She resigned her position on March 26, 2004. SSA Ex. 1. ⁽¹⁾ At the time of her resignation Petitioner had a negative sick leave balance of 214.45 hours. See SSA Ex. 2. These were hours of leave that Petitioner had not earned, but which SSA had advanced to Petitioner to cover approved absences due to illness. SSA determined that these advanced sick leave hours constituted a debt owed by Petitioner to SSA which she was obligated to repay. The amount of her debt was determined based on multiplying the advanced sick leave hours by Petitioner's hourly rate of pay at the time that she accrued the advanced sick leave. The total debt that SSA determined that Petitioner owed as of the date of her resignation was $6,606.57. SSA Ex. 2. That debt has allegedly increased subsequently to $10,340.74 due to interest and penalties. SSA Brief at 4.

Petitioner has allegedly repaid none of the debt. On two occasions subsequent to her resignation SSA asserts that it made attempts to have Petitioner agree to a repayment schedule. SSA contends that, on June 20, 2005, at Petitioner's request, SSA offered her a repayment schedule pursuant to which she would repay her debt with payments of $225 per month. SSA Ex. 4. Petitioner did not sign the repayment agreement sent to her by SSA and made no payments. SSA subsequently allegedly offered to compromise the matter by setting the debt at $7,323 and providing Petitioner with a repayment schedule of $165 per month over a five-year period. Petitioner declined this offer. SSA Brief at 3 - 4.

On April 15, 2006 Petitioner's debt was referred to a debt collection agency. SSA Ex. 7. That agency informed Petitioner on September 1, 2006 of its intent to initiate administrative wage garnishment proceedings against her. SSA Ex. 8. Petitioner then requested a hearing and the case was assigned to me for a hearing and a decision.

II. Applicable law

This case is governed by the provisions of 31 U.S.C. � 3720D (Wage Garnishment). The statute provides at subsection (a) that the head of an executive, judicial, or legislative agency (agency) that administers a program that gives rise to a delinquent nontax debt owed to the United States by an individual:

may in accordance with this section garnish the disposable pay of the individual to collect the amount owed, if the individual is not currently making required repayment in accordance with any agreement between the agency head and the individual.

The statute provides, at subsection (b)(4), that a debtor shall be provided with the opportunity to enter into a written agreement with the agency, under terms agreeable to the agency's head, to establish a schedule for repayment of the debt. Hearing rights are conferred by subsection (b)(5). The subsection provides that a debtor shall be entitled to a hearing in order to address the following issues:

(A) the existence or amount of the debt, and
(B) in the case of an individual whose repayment schedule is established other than by a written agreement pursuant to . . . [subsection (b)(4)], the terms of the repayment schedule.

There exist no regulations published by SSA that specifically govern hearings in a case involving a determination by SSA to garnish the wages of an SSA employee or a former SSA employee. SSA has published regulations that govern garnishment of wages in cases of debt. 20 C.F.R. Part 422, Subpart E. However, these regulations do not discuss hearings. ⁽²⁾

The United States Department of the Treasury (DOT) published regulations at 31 C.F.R. Part 285 that govern wage garnishment hearings. These regulations provide guidelines for agency garnishment hearings where an agency garnishes wages pursuant to 31 U.S.C. � 3720D but where the agency has not published its own procedural regulations to govern hearings. That is the case with SSA. The DOT regulations allow for a hearing to address only those issues that may be heard pursuant to 31 U.S.C. � 3720D(b)(5)(A) and (B): the existence or amount of the debt; and the terms of a repayment schedule where the repayment schedule is established by other than a written agreement. 31 C.F.R. � 285.11(f)(8)(ii). Neither the statute nor the regulation permits a person hearing such a case to consider whether a legitimate debt may be waived or to compromise or reduce a debt based on equitable considerations.

The regulation provides for an oral hearing only in the case where the person who is assigned to hear and decide it determines that the issues in dispute cannot be resolved by review of documentary evidence. 31 C.F.R. � 285.11(f)(3). The regulation imposes on the agency the burden of proving initially the existence or amount of the debt. 31 C.F.R. � 285.11(f)(8)(i). If that initial burden is met the burden shifts to the party requesting a hearing to prove that no debt exists, or that the amount of a debt is incorrect. If the debtor challenges a repayment schedule the debtor has the burden of proving that the terms of the schedule are unlawful, would cause financial hardship to the debtor, or that collection of the debt may not be pursued due to operation of law. 31 C.F.R. � 285.11(f)(8)(ii). A decision in such case constitutes final agency action. 31 C.F.R. � 285.11(f)(12).

III. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case, as defined at 31 U.S.C. � 3720D(b)(5)(A) and (B), are whether:

1. Petitioner owes a debt to SSA now totaling $10,340.74; and

2. Petitioner proved that the terms of a repayment schedule are unlawful, would cause her financial hardship, or may not be pursued due to operation of law.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separate heading. I discuss each Finding in detail.

1. Petitioner has neither asked for, nor has she established a basis for, an in-person hearing to receive evidence.

I find that there is no issue in this case that requires an in-person hearing. As I discuss below, Petitioner has not challenged the existence or the amount of her debt. She has presented evidence and arguments concerning repayment of that debt but she has not made any showing that there is a need for me to receive testimony in order to obtain evidence that is not present in exhibits which Petitioner offered and I received. Nor has she requested that I convene an in-person hearing.

2. SSA proved that Petitioner is indebted to it in the amount of $10,340.74.

SSA offered prima facie proof, in the form of SSA Ex. 2, that Petitioner owes it a debt now totaling $10,340.74. That debt consists of accrued advanced sick leave which Petitioner did not repay when she resigned from SSA, along with accumulated interest and penalties.

Petitioner offered neither evidence nor argument to challenge the existence of the debt or its amount. Her submission, in fact, contains no challenge to SSA's calculation of the debt. She does make arguments challenging SSA's right to collect the debt, which I discuss below, at Findings 3 and 4. But, I find that SSA's determination of a debt and its calculation of the debt amount is correct in the absence of any evidence from Petitioner challenging SSA's determination and calculation.

3. Petitioner did not prove that the terms of a repayment schedule are unlawful, that they would cause her financial hardship, or that they may not be pursued due to operation of law.

Petitioner argues that she cannot afford to pay the debt and that collection of the debt would, therefore, be unfair. Petitioner's Brief at 7 - 8. I am not persuaded by Petitioner's arguments. Her arguments boil down to asserting that either of the two payment schedules offered to her by SSA - the proposed $225 per month offered by SSA in June 2005 and the subsequent offer of $165 per month - are unreasonable given her income.

She contends that her current income, which she asserts is guaranteed only through the month of December 2006, consists of a biweekly draw of $1,250.

SSA is not obligated to prove the negative proposition that the repayment schedules that it offered to Petitioner work no hardship on her. It is entirely up to Petitioner, if she is challenging a repayment schedule, to prove that the schedule is unduly burdensome. Petitioner has failed to do so here because she has offered insufficient evidence for me to judge how she would be impacted by either of the two repayment schedules that SSA offered to her.

Petitioner has not offered evidence, aside from her contention, to establish the amount of her biweekly income. I find that neither a monthly repayment schedule of $225 nor one of $165 is unreasonable assuming Petitioner's contention of her biweekly income to be correct, and in the absence of any evidence from Petitioner concerning her family income, total resources, other debts, or expenses. The higher of these two repayment amounts is less than ten percent of Petitioner's total asserted monthly income. That, on the face of Petitioner's contention, appears to be a minimal repayment amount. Furthermore, it is impossible to say what hardship such repayment schedules would work on Petitioner given that Petitioner has not made any showing of how these schedules would impact on her total family income, resources, expenditures, and debts.

4. I have no authority to hear and decide Petitioner's additional arguments.

Petitioner makes several additional arguments in addition to contending that the repayment schedules offered to her are unduly burdensome. Many of the arguments that Petitioner makes, and which I discuss in detail below, have a common feature in that they rest on contentions that SSA did not deal fairly with her employment situation. These are general equitable arguments in which Petitioner contends, essentially, that the debt - although accrued by her - is somehow unfair and that it would be wrong to compel her to repay it. As a general rule, I have no authority to hear and decide these arguments. My authority under the statute and DOT regulations is limited to hearing and deciding only those narrow issues that are specifically identified. As a consequence I cannot apply general principles of equity to this case.

Petitioner makes four specific affirmative arguments, in addition to her contention that the repayment schedules are unfair as applied to her, to challenge SSA's determination to garnish her wages. First, Petitioner contends that SSA did not grant fair and equitable treatment to her. She premises this assertion on her contention that, while employed by SSA, she applied for a transfer to another office within SSA, which SSA denied at her then grade and pay. According to Petitioner, had SSA been fair with her and approved her transfer request, she would have remained an agency employee and would have been able to repay her debt by accruing unused sick leave.

Petitioner's argument does not address either of the two issues that I do have authority to hear, the existence of the debt and the fairness of a repayment schedule. Consequently, I am without authority to hear and decide it.

Second, Petitioner avers that her debt was accrued through "administrative error" and that she was not guilty of fraud, misrepresentation, fault, or lack of good faith in incurring the debt. By "administrative error" Petitioner means that her employer erred in not approving her application for a transfer of job location. In making this argument Petitioner again avers that SSA unfairly denied her transfer request. However, even assuming Petitioner's assertions to be true, they say nothing that would rebut the finding of a debt or SSA's calculation of the debt's amount. Therefore, this argument is irrelevant.

Third, Petitioner contends that she terminated her employment with SSA due to a medical condition that prevented her from returning to work. As with her other arguments, this assertion - even assuming its truth - simply does not address the issues that I have authority to hear and decide.

Fourth, Petitioner asserts that SSA's handling of her debt did not comport with applicable regulations. In support of this assertion Petitioner cites a number of alleged procedural errors in the way in which SSA handled her debt. However, these assertions are not material to this case because they in no respect controvert either the existence of the debt nor do they address the issue of the reasonableness of the repayment schedules established by SSA. Therefore, I have no authority to adjudicate Petitioner's argument.

5. I have no authority to waive Petitioner's debt.

Petitioner argues, citing various equitable considerations, that I should direct SSA to waive her debt. I have no authority to do that. Nothing in either 31 U.S.C. � 3720D or SSA or DOT regulations gives me that authority.

Steven T. Kessel

Administrative Law Judge

1. SSA submitted 12 exhibits with its brief. I am designating these exhibits SSA Ex. 1 - SSA Ex. 12. Petitioner submitted 21 exhibits with her brief. I am designating these exhibits as P. Ex. 1 - P. Ex. 21. I receive both SSA's and Petitioner's exhibits into evidence.

2. 20 C.F.R. � 422.425 describes a written review of a debt by SSA. The section does not suggest that this review is or is in lieu of a hearing and SSA has not advocated that the section confers or limits hearing rights.