5 C.F.R. Subpart N—Standards for Waiver of Overpayments
Title 5 - Administrative Personnel
Source: 45 FR 23635, Apr. 8, 1980, unless otherwise noted.
Recovery of an overpayment from the Civil Service Retirement and Disability Fund may be waived pursuant to section 8346(b), of title 5, United States Code, when the annuitant (a) is without fault and (b) recovery would be against equity and good conscience. Where it has been determined that the recipient of an overpayment is ineligible for waiver, the individual is nevertheless entitled to an adjustment in the recovery schedule if he/she shows that it would cause him/her financial hardship to make payment at the rate scheduled. A recipient of an overpayment is without fault if he/she performed no act of commission or omission which resulted in the overpayment. The fact that the Office of Personnel Management may have been at fault in initiating an overpayment will not necessarily relieve the individual from liability. (a) Considerations. Pertinent considerations in finding fault are— (1) Whether payment resulted from the individual's incorrect but not necessarily fraudulent statement, which he/she should have known to be incorrect; (2) Whether payment resulted from the individual's failure to disclose material facts in his/her possession which he/she should have known to be material; or (3) Whether he/she accepted a payment which he/she knew or should have known to be erroneous. (b) Mitigation factors. The individual's age, physical and mental condition or the nature of the information supplied to him/her by OPM or a Federal agency may mitigate against finding fault if one or more contributed to his/her submission of an incorrect statement, a statement which did not disclose material facts in his/her possession, or his/her acceptance of an erroneous overpayment. (a) Defined. Recovery is against equity and good conscience when— (1) It would cause financial hardship to the person from whom it is sought; (2) The recipient of the overpayment can show (regardless of his or her financial circumstances) that due to the notice that such payment would be made or because of the incorrect payment either he/she has relinquished a valuable right or changed positions for the worse; or (3) Recovery could be unconscionable under the circumstances. Financial hardship may be deemed to exist in—but not limited to—those situations where the annuitant from whom collection is sought needs substantially all of his/her current income and liquid assets to meet current ordinary and necessary living expenses and liabilities. (a) Considerations. Some pertinent considerations in determining whether recovery would cause financial hardship are as follows: (1) The individual's financial ability to pay at the time collection is scheduled to be made. (2) Income to other family member(s), if such member's ordinary and necessary living expenses are included in expenses reported by the annuitant. (b) Exemptions. Assets exempt from execution under State law should not be considered in determining an individual's ability to repay the indebtedness, rather primary emphasis shall be placed upon the annuitant's liquid assets and current income in making such determinations. An individual's ordinary and necessary living expenses include rent, mortgage payments, utilities, maintenance, food, clothing, insurance (life, health and accident), taxes, installment payments, medical expenses, support expenses when the annuitant is legally responsible, and other miscellaneous expenses which the individual can establish as being ordinary and necessary. (a) When not granted. Waiver of an overpayment cannot be granted when— (1) The overpayment was obtained by fraud; or (2) The overpayment was made to an estate. (a) Burden of OPM. The Associate Director for Compensation must establish by the preponderance of the evidence that an overpayment occurred. (b) Burden of annuitant. The recipient of an overpayment must establish by substantial evidence that he/she is eligible for waiver or an adjustment.
Title 5: Administrative Personnel
PART 831—RETIREMENT
Subpart N—Standards for Waiver of Overpayments
§ 831.1401 Conditions for waiver.
§ 831.1402 Fault.
§ 831.1403 Equity and good conscience.
§ 831.1404 Financial hardship.
§ 831.1405 Ordinary and necessary living expenses.
§ 831.1406 Waiver precluded.
§ 831.1407 Burdens of proof.
