What is an example of a discretionary allotment?

Discretionary Allotments: An Overview

Discretionary allotments are a type of recurring deduction that is authorized by both the employee and the agency. They are commonly used for paying monthly bills to a designated payee, such as a utility company, credit card issuer, or mortgage lender. The amount of the allotment and the payee information are specified by the employee.

Discretionary allotments are typically deducted from the employee’s pay on the first payday of the month. If the allotment is established or changed in the middle of the month, it will not take effect until the beginning of the following month. For the months in which there are three pay periods, deductions are not withheld for the third payday.

Purpose of Discretionary Allotments

Discretionary allotments serve various purposes, including:

• Making regular payments towards bills or debts
• Saving money for future expenses
• Contributing to retirement accounts
• Supporting family members or dependents

Limitations and Restrictions

There are certain limitations and restrictions associated with discretionary allotments:

• Employees may have a maximum of six discretionary allotments per month.
• The total amount of all discretionary allotments cannot exceed a specified percentage of the employee’s pay.
• Discretionary allotments cannot be used to purchase personal property, such as vehicles or electronics.
• If an employee is on extended non-pay status, deductions cannot be made.

Changes and Cancellations

Employees may request changes or cancellations to their discretionary allotments at any time. Changes should be communicated to the agency’s personnel office. Discretionary allotments are automatically canceled when an employee separates from the agency.

Sources

• Military Pay Allotments | Military.com
• Allotments of pay | U.S. Department of Commerce
• Discretionary Allotments

FAQs

What is a discretionary allotment?

A discretionary allotment is a type of recurring deduction that is authorized by both the employee and the agency. It is used to make regular payments to a designated payee, such as a utility company, credit card issuer, or mortgage lender.

What are some examples of discretionary allotments?

Common examples of discretionary allotments include:

• Payments towards rent or mortgage
• Utility bills (electricity, gas, water)
• Car payments
• Credit card payments
• Student loan payments
• Contributions to retirement accounts
• Child support payments

How do I set up a discretionary allotment?

To set up a discretionary allotment, you will need to complete an allotment authorization form and submit it to your agency’s personnel office. The form will typically require you to provide the following information:

• The amount of the allotment
• The payee’s name and address
• The date the allotment should begin
• The frequency of the allotment (e.g., monthly, semi-monthly)

Can I change or cancel a discretionary allotment?

Yes, you can change or cancel a discretionary allotment at any time. To do so, you will need to submit a new allotment authorization form to your agency’s personnel office.

What happens to my discretionary allotments if I leave my job?

Discretionary allotments are automatically canceled when an employee separates from the agency. Any outstanding balances will be refunded to the employee.

Are there any limits on the number or amount of discretionary allotments I can have?

Yes, there are typically limits on the number and amount of discretionary allotments that an employee can have. These limits vary by agency, so you should check with your personnel office for more information.

Can I use a discretionary allotment to purchase personal property?

No, discretionary allotments cannot be used to purchase personal property, such as vehicles or electronics.