Selecting the deduction category determines the use of the deduction once it has been subtracted from the benefit payment. The user has the option to create an applied, un-applied or third party deduction.
Un-applied deductions are refunds to the agency and therefore directed towards the agency's account. During the un-applied deduction creation process, general information is recorded which can be used at a later time. Applied deductions are applied toward a liability. During the applied deduction creation process, the user selects the participant whose liability the deduction is to be applied toward, as well as the name of the liability (relevant only when the participant has more than one outstanding liability).
Third party deductions are issued to third parties. During the third party deduction process, the user specifies the third party participant who is to receive the deduction amount. Third party account information must also be recorded: this includes the third party account number and a reference number which provides a record of the relationship between the third party and the deduction.