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COVID-19 Out of Service Debt Information


FAS DEBT COLLECTION ACTIONS DURING THE PANDEMIC:

In March of 2020, the DFAS Debt and Claims Management Office put a temporary hold on notifying and collecting all new Out-of-Service debts in order to provide financial relief to debtors. 
 
Old-Age, Survivors, and Disability Insurance:
 
DFAS continues to issue notifications and pursue collections on any out-of-service 2020 Old-Age, Survivors, and Disability Insurance (OASDI) deferral debts per the Consolidated Appropriations Act, 2021. 
  • If you separated or retired in 2020:
    Given your separation or retirement in 2020, the Social Security taxes deferred in 2020 cannot be collected directly from your 2021 wages. The government will pay the deferred Social Security taxes to the IRS on your behalf, and you will owe DFAS for this repayment. Collection will occur through the debt management process. You will receive a debt letter via US mail which will provide instructions for repayment. Payments can be made online via Pay.gov.
  • If you are planning to or have separated in 2021:
    If you separate or retire in 2021, before the deferred Social Security tax is collected in full, the unpaid balance will be collected from your final pay. If there are insufficient funds to collect the full amount, you may receive a debt letter with instructions for repayment. Collection will occur through the debt management process. You will receive a debt letter via US mail which will provide instructions for repayment. Payments can be made online via Pay.gov.
For debts less than $25: Members who receive a debt letter with a total debt balance less than $25 will be given a total of 60 days to pay in full. If not paid within the 60 days, a 2020 W-2C will be issued to the member, reporting the unpaid debt amount as additional wages earned, which may require the member to file an amended 2020 tax return.  
 
Additionally, DFAS also put a temporary pause on referring existing debts in a delinquent status to Treasury, Private Collection Agencies, and Credit Bureaus.

No interest, penalties, or administrative fees were assessed on new or existing debts during this period.

On October 1, this hold lifted and the DFAS Debt and Claims Office began mailing out Debt Notifications to affected individuals.

IF YOU HAVE A DEBT THAT HAS BEEN ON HOLD:

If you have a new or existing debt that has been on a temporary hold, you have or will soon be receiving a separately mailed debt letter from DFAS.  Please refer to your debt letter for information about your debt, payment options, and other important information.

STEPS YOU SHOULD TAKE IF YOU HAVE A DEBT THAT HAS BEEN ON HOLD AND RECEIVE A LETTER:
  • Read through the debt letter and make a plan.
  • If you agree you owe the debt, follow the instructions in the letter to pay the debt in full or set up a repayment plan.
  • If you disagree you owe the debt, review the options available to you as directed in the letter. 
  • If you are currently experiencing financial hardship, or begin experiencing a hardship after starting to repay your debt, please use one of the repayment options below. REPAYMENT OPTIONS: 
    If you are experiencing financial hardship, we can help you with repayment options.  For repayment options, Click here

    To apply for repayment options, select:
  • Lump Sum Payment
  • Repayment  Plan Options 
    Follow the instructions titled:  How to Apply for a Reduced Installment Payment Request

IF YOU NEED HELP OR HAVE QUESTIONS:

Check out our Frequently Asked Questions page

Or visit our AskDFAS page
We are here to support you during this difficult time.
Please follow national and local guidelines to stay healthy and safe
 
Page Updated October 5, 2021