5 C.F.R. Subpart C—Standards for Waiver of Overpayments
Title 5 - Administrative Personnel
Recovery of an overpayment from the Fund may be waived pursuant to section 8470(b), of title 5, United States Code, when (a) the annuitant is without fault and (b) recovery would be against equity and good conscience. When 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 or she shows that it would cause him or her financial hardship to make payment at the rate scheduled. A recipient of an overpayment is without fault if he or she performed no act of commission or omission that resulted in the overpayment. The fact that the Office of Personnel Management (OPM) or another agency 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 or she should have known to be incorrect; (2) Whether payment resulted from the individual's failure to disclose material facts in his or her possession, which he or she should have known to be material; or (3) Whether he or she accepted a payment that he or 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 or her by OPM or a Federal agency may mitigate against finding fault if one or more of these factors contributed to his or her submission of an incorrect statement, a statement that did not disclose material facts in his or her possession, or his or her acceptance of an erroneous overpayment. Recovery is against equity and good conscience when— (a) It would cause financial hardship to the person from whom it is sought; (b) 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 he or she either has relinquished a valuable right or has changed positions for the worse; or (c) Recovery would be unconscionable under the circumstances. Financial hardship may be deemed to exist in, but not limited to, those situations when the annuitant from whom collection is sought needs substantially all of his or 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 will 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, transportation, food, clothing, insurance (life, health, and accident), taxes, installment payments, medical expenses, support expenses for which the annuitant is legally responsible, and other miscellaneous expenses that the individual can establish as being ordinary and necessary. Waiver of an overpayment cannot be granted when— (a) The overpayment was obtained by fraud; or (b) The overpayment was made to an estate. (a) Burden of OPM. The Associate Director 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 or she is eligible for waiver or an adjustment.
Title 5: Administrative Personnel
PART 845—FEDERAL EMPLOYEES RETIREMENT SYSTEM—DEBT COLLECTION
Subpart C—Standards for Waiver of Overpayments
§ 845.301 Conditions for waiver.
§ 845.302 Fault.
§ 845.303 Equity and good conscience.
§ 845.304 Financial hardship.
§ 845.305 Ordinary and necessary living expenses.
§ 845.306 Waiver precluded.
§ 845.307 Burdens of proof.
