[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR1650.32]

[Page 268-269]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
         CHAPTER VI--FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
 
PART 1650_METHODS OF WITHDRAWING FUNDS FROM THE THRIFT SAVINGS PLAN--Table of Contents
 
                    Subpart D_In-Service Withdrawals
 
Sec.  1650.32  Financial hardship withdrawals.

    (a) A participant who has not separated from Government employment 
and who can certify that he or she has a financial hardship is eligible 
to withdraw all or a portion of his or her own contributions to the TSP 
(and their attributable earnings) in a single payment to meet certain 
specified financial obligations. The amount of a financial hardship 
withdrawal request must be at least $1,000.
    (b) To be eligible for a financial hardship withdrawal, a 
participant must have a financial need that results from at least one of 
the following four conditions:
    (1) The participant's monthly cash flow is negative (i.e., the 
participant's income is less than his or her monthly expenses on a 
recurring basis);
    (2) The participant has incurred medical expenses as a result of a 
medical condition, illness, or injury to the participant, the 
participant's spouse, or the participant's dependents. Generally, 
eligible expenses are those that would be eligible for deduction as 
medical expenses for Federal income tax purposes. Eligible medical 
expenses include the cost of household improvements required as a result 
of a medical condition, illness or injury. Household improvements are 
structural improvements to the participant's living quarters or the 
installation of special equipment that is necessary to accommodate the 
circumstances of the incapacitated person.
    (3) The participant must have paid the cost of repair or replacement 
resulting from a personal casualty loss that would be eligible for 
deduction for Federal income tax purposes, but without regard to the IRS 
income limitations on deductibility, fair market value of the property, 
or number of events. Personal casualty loss includes damage, 
destruction, or loss of property resulting from a sudden, unexpected, or 
unusual event, such as an earthquake, hurricane, tornado, flood, storm, 
fire, or theft.

[[Page 269]]

    (4) The participant must have paid attorney fees and court costs 
associated with separation or divorce. Court-ordered payments to a 
spouse or former spouse and child support payments are not allowed, nor 
are costs of obtaining prepaid legal services or other coverage for 
legal services.
    (c) When determining financial hardship needs, a participant cannot 
use any expenses that are already paid or are reimbursable to the 
participant by insurance or otherwise.
    (d) The amount of a participant's financial hardship withdrawal 
cannot exceed the smallest of the following:
    (1) The amount requested; or
    (2) The amount in the participant's account that is equal to his or 
her own contributions and attributable earnings.
    (e) The participant must certify that he or he has a financial 
hardship as described on the hardship withdrawal form, and that the 
dollar amount of the withdrawal request does not exceed the actual 
amount of the financial hardship.
    (f) A participant is not eligible for an in-service hardship 
withdrawal based solely on monthly negative cash flow (as described in 
paragraph (b)(1) of this section) during the time he or she has pending 
a petition in bankruptcy under Chapter 13 of the Bankruptcy Code (11 
U.S.C. chapter 13).

[68 FR 35503, June 13, 2003, as amended at 68 FR 74451, Dec. 23, 2003]