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Agencies are not required to make loan payments in one lump sum. In fact, making a loan payment in one lump sum to the loan holder on behalf of the employee accelerates the employee’s tax liability and may increase the resulting tax burden. (See Questions and Answers on Tax Liability.)
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Yes. Under 5 CFR 575.105(b), agencies may target groups of positions that have been difficult to fill in the past or that may be difficult to fill in the future and may make the required written determination to offer a recruitment incentive on a group basis (excluding positions covered by 5 CFR 575.103(a)(2), (a)(3), or (a)(5) or in similar categories approved by OPM). All requirements in the regulations and the agency's recruitment incentive plan must be met in order to pay a recruitment incentive to an individual employee in the covered group. For example, agencies may authorize a recruitment incentive of up to 25 percent of the annual rate of basic pay of the employee at the beginning of the service period multiplied by the number of years (including fractions of a year) in the service period (not to exceed 4 years), and the employee must be newly appointed in the Federal Government and must sign a service agreement of at least 6 months with the appointing agency.
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It is up to the agency to decide how long to set the service period for retention incentives. Since the reason for the incentive is to encourage an employee to remain with the agency, the agency should consider what service period length would best help achieve this objective, i.e., what the agency believes to be a reasonable period of service for the amount of incentive it is willing to pay. A service period under a service agreement for an employee likely to leave for a different Federal position may not extend past the date on which the employee’s position is actually affected by the relocation or closure of the employee’s office, facility, activity, or organization (e.g., the date the employee’s position moves to a new geographic location or the date the employee’s position is eliminated.)
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No. An agency has discretionary authority to repay certain types of Federally made, insured, or guaranteed student loans as a recruitment or retention incentive for highly qualified candidates or current employees.
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Yes. Agencies must report to the IRS the amount of student loan repayment benefits they have provided to an employee. (See Questions and Answers on Tax Liability.)
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A position is considered to be in a different geographic area if the worksite of the new position is 50 or more miles from the worksite of the position held immediately before the move. If the worksite of the new position is less than 50 miles from the worksite of the position held immediately before the move, but the employee must relocate (i.e., establish a new residence) to accept the position, an authorized agency official may waive the 50-mile requirement and pay the employee a relocation incentive. (See 5 CFR 575.205(b).)
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A retention incentive is an incentive an agency may pay to a current employee if--
- The agency determines that the unusually high or unique qualifications of the employee or a special need of the agency for the employee’s services makes it essential to retain the employee and the employee would be likely to leave the Federal service in the absence of a retention incentive, or
- The agency has a special need for the employee’s services that makes it essential to retain the employee in his or her current position during a period of time before the closure or relocation of the employee’s office, facility, activity, or organization and the employee would be likely to leave for a different position in the Federal service in the absence of a retention incentive.
(See 5 CFR 575.301, 575.315(a)(1), the
Retention Incentives (likely to leave the Federal service) fact sheet, and the
Retention Incentives (likely to leave for a different Federal position) fact sheet.)
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