Debt Module. Defense Finance and Accounting Service. INDIANAPOLIS PAYROLL OFFICE Air Force. Integrity - Service - Innovation

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Margaret Norton
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1 Debt Module Defense Finance and Accounting Service INDIANAPOLIS PAYROLL OFFICE Air Force Integrity - Service - Innovation

2 Topics Debt Reasons Full Due Process Debts Routine (DCIA) Debts Debt Module Screens Current Year Debts Prior Year Debts Mixed and Reduced Debts How Debts show on Pay History Debt Offset Requests 5/18/2018 Integrity - Service - Innovation 2

3 Debt Reasons T P A 5/18/2018 Integrity - Service - Innovation 3

4 Debt Type Q 5/18/2018 Integrity - Service - Innovation 4

5 Accessing a Debt Case in DCPS Payroll User Manual - dfas4dod.dfas.mil Systems/DCPS/Manuals 5/18/2018 Integrity - Service - Innovation 5

6 Debt Module Debt Case Screen 1 Main Debt Case Screen Shows Relevant Debt information To Navigate Screens 5/18/2018 Integrity - Service - Innovation 6

7 Breakdown of Debt ID field 5/18/2018 Integrity - Service - Innovation 7

8 Debt Module Debt Case Screen 2 (F5 Key) Remarks are added by PRO 5/18/2018 Integrity - Service - Innovation 8

9 Debt Module Debt Case Screen 3 (F10 Key) Line of Accounting (LOA) for Agency owed the money Press F2 to display more than one LOA Cash Payments and Adjustments are entered here by PRO. 5/18/2018 Integrity - Service - Innovation 9

10 Debt Module Debt Case Screen 4 (F9 Key) Waiver & Voluntary Repayment Agreement [VRA] See PRO Manual Section D, Chapter 9 for New Indicator Codes 5/18/2018 Integrity - Service - Innovation 10

11 Debt Module Debt Case Screen 5 (F6 Key) Hearing, Reconsideration and Involuntary Repayment See PRO Manual Section D, Chapter 9 for New Indicator Codes 5/18/2018 Integrity - Service - Innovation 11

12 Debt Module Debt Case Screen 6 (F12 Key) Shows Listing of Biweekly Deductions & Payments 5/18/2018 Integrity - Service - Innovation 12

13 Other Deduction Codes found in Debt Module 5/18/2018 Integrity - Service - Innovation 13

14 Debt Module Example XX Debt Case Manual Debt Creation Click F5 to View Notes on PRO Remarks 5/18/2018 Integrity - Service - Innovation 14

15 Debt Module Example XX Debt Case Remarks 5/18/2018 Integrity - Service - Innovation 15

16 Debt Module Example Debt Case Transfer Shows Transfer of Debt from CP1 (Air Force) to OMA (Army) 5/18/2018 Integrity - Service - Innovation 16

17 Current Year Debt General Information The Defense Civilian Payroll System (DCPS) automatically reduces current year-to-date payroll record when A Debt is created for the current year in the current year Entries will show on Pay History as negative numbers Taxes and some Deductions are used to offset (reduce) the Gross debt. Employee repays the Net debt Federal, State, Local Withholding Taxes Medicare, OASDI, Retirement TSP, FEHB, FEGLI Current Year Debt will automatically offset (be reduced) by Lump Sum Leave Pay when an employee separates 5/18/2018 Integrity - Service - Innovation 17

18 Current Year Debt General Information Not all deductions can be used to offset debts Cannot be recouped from providers. Some examples are: 5/18/2018 Integrity - Service - Innovation 18

19 Current Year Debt General Information Employees are due year-to-date reduction on a current year debt only when the net amount of the debt is repaid in the same year If the net amount of a current year debt is not paid in full by last pay period of the year DCPS recalculates (increases) employee taxable income Recalculation (Recalc) is computed by DCPS Recalc = Remaining Amount of Debt x Taxable Percentage (Screen #3) Recalc shows on Pay History for last PPE of calendar year Deduction offset is not removed from Debt Case (Screen #1) Debt stays at net amount in Debt Case (Screen #1) 5/18/2018 Integrity - Service - Innovation 19

20 DCPS Recalc on Last Pay Period of Year The Wages Subj. to Federal Tax (VC) and State Tax (VD) are increased by Recalc amount of $

Debt Module Screen 5 - Debt Recalc Formula Remain Amt of $127.

21 Debt Module Screen 5 - Debt Recalc Formula Remain Amt of $ x Taxable% = $ /18/2018 Integrity - Service - Innovation 21

22 Current Year Debt Example Debt Module Letter Portion of Debt Letter Generated from Debt Module 5/18/2018 Integrity - Service - Innovation 22

23 Current Year Debt Example 1 - No Offset Amount Manual debt creation current year 5/18/2018 Integrity - Service - Innovation 23

24 Current Year Debt Example 1 Debt Case Remarks 5/18/2018 Integrity - Service - Innovation 24

25 Current Year Example 1 Pay History 5/18/2018 Integrity - Service - Innovation 25

26 Recap of Debt Calculation Employee claimed Hardship & withdrew TSP monies. RA debt created & XV was erroneously included in offset. PRO creates manual debt 5/18/2018 Integrity - Service - Innovation 26

Current Year Debt Example 2 Offset Amount Gross Debt $2812.00 LESS Offset $753.

27 Current Year Debt Example 2 Offset Amount Gross Debt $ LESS Offset $ EQUALS Remaining Balance $ /18/2018 Integrity - Service - Innovation 27

Current Year Debt Example 2 Debt Case Screen 3 $2058.

28 Current Year Debt Example 2 Debt Case Screen 3 $ will recalculate at 95% if not paid by Final 2016 PPE but PRO has posted Cash Payment 5/18/2018 Integrity - Service - Innovation 28

Current Year Debt Example 2 Debt Creation RA Gross Debt is ($753.35) + ($2058.65) = ($2812.

29 Current Year Debt Example 2 Debt Creation RA Gross Debt is ($753.35) + ($ ) = ($ ) R identifies Principal Remaining Debt Balance after Offset 5/18/2018 Integrity - Service - Innovation 29

30 Current Year Debt Example 2 Debt Creation 5/18/2018 Integrity - Service - Innovation 30

31 Time History for Example 2 5/18/2018 Integrity - Service - Innovation 31

32 Excerpt from PRO manual 5/18/2018 Integrity - Service - Innovation 32

33 Example QE FEHB debt QE Deduction Code with Address Code of 102 5/18/2018 Integrity - Service - Innovation 33

34 FEHB Debt Taxation W for Waived Applied, R for Reduction Applied 5/18/2018 Integrity - Service - Innovation 34

35 Pay History reflecting Q5 collection Q5 with waived pre-tax indicator did not reduce taxable income 5/18/2018 Integrity - Service - Innovation 35

36 Request for Debt Offset Remedy Ticket Used when a Debt was created in error & a Correction was processed Timely process of correction on pay close and/or at year end PRO under audit inspection, must make employee record correct as it impacts W2 s, Retirement record, etc HR, Timekeeper or CSR must submit ticket as soon as correction is processed to prevent retroactive monies from paying out to employee If retroactive monies pay out to the employee, employee will have been paid twice for the same time and will need to repay the debt PRO cannot offset Debt until retroactive corrections come through in DCPS 5 Day Suspense by PRO 5/18/2018 Integrity - Service - Innovation 36

37 Request for Debt Offset Remedy Ticket If a Debt Offset is not requested when corrections are made the employee will be paid twice for the same period of time and money The monies will be taxed Employees will have to use the tax certificate they receive from PRO to get credit for payment on taxable income Debt Offset tickets should not be used for other purposes Not to Cancel debts that require corrections to be processed Not to Correct offline debts (Debt Audit) 5/18/2018 Integrity - Service - Innovation 37

38 Debt Offset Debt Module Screen 1 Before Pay Process 5/18/2018 Integrity - Service - Innovation 38

39 Debt Offset Debt Module Screen 2 Remarks are added by PRO 5/18/2018 Integrity - Service - Innovation 39

40 Debt Offset Debt Module Screen 3 PRO releasing the debt to collect against Retro 5/18/2018 Integrity - Service - Innovation 40

41 Current Year Debt Retroactive Adjustment QA Debt collection of ($ ) on Pay Detail 5/18/2018 Integrity - Service - Innovation 41

42 Current Year Debt Module after Pay Closed 5/18/2018 Integrity - Service - Innovation 42

43 Prior Year Debt General Information Prior Year Debts are created with No Offset for Taxes Can have Offset for TSP & FEGLI IRS Publication 15 regulations (Wage Repayments) Employee Reporting of Repayment. The wages paid in error in the prior year remain taxable to the employee for that year. This is because the employee received and had use of those funds during that year... the employee is entitled to a deduction (or credit in some cases) for the repaid wages on his or her income tax return for the year of repayment. Tax Certificate 5/18/2018 Integrity - Service - Innovation 43

44 Prior Year Debt General Information Employee is entitled to a Tax Certificate from DFAS for all monies collected by DFAS for payroll debts that are taxable income This does not include: Non Payroll Debts Lost property Travel Debts Non Taxable Income Separate Maintenance Allowance (YH) COLA (YC) Living Quarters Allowance (YE) Temporary Quarters Subsistence Allowance (YJ) Prior Year Debt will automatically offset with any Lump Sum Leave Payment when an employee separates 5/18/2018 Integrity - Service - Innovation 44

45 Prior year Debt - Example 1 Created Current with Offset Prior year Debt Offset can consist of any Retro Action Occurring the same PPE 5/18/2018 Integrity - Service - Innovation 45

46 Prior Year Debt Pay History Offset = $47.17 RA & $3.54 ZG 5/18/2018 Integrity - Service - Innovation 46

47 Prior Year Debt Pay History 5/18/2018 Integrity - Service - Innovation 47

48 Prior Year Debt Pay History 5/18/2018 Integrity - Service - Innovation 48

49 Recap of Example 1 Prior Year Debt 5/18/2018 Integrity - Service - Innovation 49

50 Prior Year Debt Example 2 No Offset 5/18/2018 Integrity - Service - Innovation 50

51 Prior Year Debt Example 2 Created Current year 5/18/2018 Integrity - Service - Innovation 51

52 Example Debt Module with Receipt of VRA 5/18/2018 Integrity - Service - Innovation 52

53 Debt Module (F9) VRA screen & (F5) Remarks Screen 5/18/2018 Integrity - Service - Innovation 53

54 Mixed and Reduced Debts Defense Civilian Payroll System (DCPS) logic currently cannot identify and process two types of debts These Debts are identified as either Mixed or Reduced and require manual adjustments by the Payroll Office (PRO) Manual adjustments ensure that the Debt Module accurately reflects the correct amount of offset and correct principle remaining balance Manual adjustments certify that the employee receives an accurate Wage and Tax Statement (W-2) 5/18/2018 Integrity - Service - Innovation 54

55 Mixed Debt What is a Mixed Debt? The overpayment includes multiple pay periods crossing calendar years DCPS creates a single debt for the full timeframe Manual adjustments are required by the PRO Properly reflect the correct amount of offset with the correct debt Taxable income is accurately reflected Debt is split based on the following criteria o Prior Year o Current Year PY/CY indicator in Debt Module will reflect an M 5/18/2018 Integrity - Service - Innovation 55

56 Mixed Debt Module Example - Invalidated Debt Seq#06 created PPE 3/8/14 shows overpayment crossed 3 calendar years - PPE February 25, 2012 through PPE February 22, 2014 This debt was invalidated (Stop IDC I ) and then correctly split by PRO 5/18/2018 Integrity - Service - Innovation 56

57 PRO Remarks for Invalid Debt 5/18/2018 Integrity - Service - Innovation 57

58 Mixed Debt Module Example-Corrected 2012 Seq #7 Debt is manually created on PPE 5/17/14 Shows only calendar year 2012 overpayments Offset Amount is determined based on Master Pay Histories 5/18/2018 Integrity - Service - Innovation 58

59 PRO Remarks on Manual Debt Created by PRO 5/18/2018 Integrity - Service - Innovation 59

60 Mixed Debt Module Example- Corrected 2013 Seq #8 Debt is manually created on PPE 5/17/14 Shows only calendar year 2013 overpayments Offset Amount is determined based on Master Pay Histories 5/18/2018 Integrity - Service - Innovation 60

61 Mixed Module Debt Example-Corrected 2014 Seq #9 Debt is manually created on PPE 5/17/14 Shows only calendar year 2014 overpayments Offset Amount is determined based on Master Pay Histories 5/18/2018 Integrity - Service - Innovation 61

62 Master Pay History - M&R Debt Creation PRO researches Master Pay Histories and calculates total deductions for 2012, 2013 & 2014 to obtain the offset for each year s manual debt 5/18/2018 Integrity - Service - Innovation 62

63 Mixed Debt Audit PRO creates an Audit for the PPE that the Debt Created and calculates total deductions for each year (2012, 2013 & 2014) to obtain the offset amount for each year s manual debt 5/18/2018 Integrity - Service - Innovation 63

64 Reduced Debt Overpayment is received in the current calendar year for a prior year pay period. PY/CY indicator within the debt module shows as R DCPS cannot identify when the original monies associated with the debt were originally paid and reports the issue for PRO review PRO must: Identify when the monies associated with the debt were originally paid in order to calculate the proper offset Determine if debt should be prior year OR current year 5/18/2018 Integrity - Service - Innovation 64

Reduced Debt Module Example - Invalidated Debt Seq#01 created PPE 6/2/12 shows overpayment for monies paid for PPE December 17, 2011.

65 Reduced Debt Module Example - Invalidated Debt Seq#01 created PPE 6/2/12 shows overpayment for monies paid for PPE December 17, DCPS did not calculate an Offset Amount.PRO invalidates Debt ( I ) & must determine when monies actually paid 5/18/2018 Integrity - Service - Innovation 65

66 Pay History Debt was created Master Pay History for PPE June 2, 2012 shows a debt created for Lump Sum Leave (PA) monies that were previously paid FOR pay period ending December 17, /18/2018 Integrity - Service - Innovation 66

67 PRO Creates Reduced Debt in Module with the Offset Debt Seq#02 manually created PPE June 16, 2012 shows: PRO calculation of correct $ Offset based on Master Pay History for PPE 2/25/12 5/18/2018 Integrity - Service - Innovation 67

68 PRO Calculates Offset using PPE when PA was Paid Lump Sum Leave (PA) was paid in current year 2012 as a retro payment. Since NO other monies were paid PPE 2/25/12 ALL of the deductions become the offset for the manual debt 5/18/2018 Integrity - Service - Innovation 68

69 Master Pay History of PPE that was corrected Master Pay History for PPE December 17, 2011 shows: Lump Sum Leave (PA) money is scheduled to be paid on PPE 2/25/12 & Debt will create for the Lump Sum Leave on PPE 6/2/2012 5/18/2018 Integrity - Service - Innovation 69

70 PRO Processes Offset for Reduced Debt Master Pay History for PPE February 25, 2012 shows: Lump Sum Leave (PA) FOR PPE 12/17/11 paid ON PPE 2/25/12. Debt is Current Year. PRO must correct Year to Date Information and Debt Module 5/18/2018 Integrity - Service - Innovation 70.

71 Summary for M/R debts Adjustments are required by PRO on all M/R debts M/R debt notifications may have erroneous offset amounts Due to debt volume PRO cannot stop notifications Multiple HRO and/or Timekeeper changes processed in the same pay period result in the possibility of Mixed Debts Crosses calendar years Positive and negative changes in the same pay period Prior year monies erroneously paid in the current year results in the possibility of Reduced Debts Ensure dates are correct and actions are proper before interfaced to DCPS 5/18/2018 Integrity - Service - Innovation 71

72 Miscellaneous Tips Pay.gov payment If payment is not received timely (prior to suspense date), the deduction from payroll will also occur. This causes: Employee to have paid the debt twice PRO to create a remedy ticket to refund the pay.gov payment When PRO refunds the pay.gov payment and employee stops pay.gov payment the employee is indebted for the erroneous refund Accelerated Pay DCPS gives notice when pay is accelerated Important for entering pay related items if needed to occur for the current pay period 5/18/2018 Integrity - Service - Innovation 72

73 QUESTIONS? 5/18/2018 Integrity - Service - Innovation 73

DD2481 s, VRA s, Out of Service Debts, Hearings and Waivers

DD2481 s, VRA s, Out of Service Debts, Hearings and Waivers Defense Finance and Accounting Service INDIANAPOLIS PAYROLL OFFICE November 14, 2014 Integrity - Service - Innovation Integrity - Service - Innovation