Authorization To Compromise, Suspend, or Terminate Collection of Overpaid Benefits

The Acting Solicitor of the Department of Labor requested a decision concerning the authority of the Secretary of Labor to compromise, suspend, or terminate the collection of overpayments made to the Redwood Employees Protection Program. The issue of overpayments to the program beneficiaries is not addressed in the act which established the program. Under the Claims Collection Act as implemented by the claims collection standards, administrative agencies are required to take aggressive collection action on claims of the United States arising out of their activities. This includes the authority to compromise, terminate, or suspend collection action. However, the scope of that authority is limited, so that a claim may not exceed $20,000. In order to justify the compromise, suspension, or termination of collection, the debtor must be unable to pay, or it must appear that the cost of further action will exceed any recovery. GAO held that the Secretary of Labor may compromise, suspend, or terminate collection action for overpayment of Redwood Employees Protection Program benefits under the limited authority of the Claims Collection Act.