Casarez v. Opm, 24-2125

Guadalupe Casarez, a former USPS employee, applied for FERS disability retirement in 2015 and was later awarded both FERS and retroactive SSA disability benefits.
OPM notified Casarez that her FERS annuity would be reduced by the amount of her Social Security benefits and instructed her to set aside retroactive SSA payments to repay the overpaid FERS benefits.
Casarez received a letter in 2018 disclosing an overpayment of $61,531 due to the retroactive SSA benefits and the need for repayment in 108 monthly installments.
Casarez requested reconsideration, challenging both the existence and amount of the overpayment, arguing for a waiver and, alternatively, for reduced installments due to financial hardship.
The Merit Systems Protection Board (MSPB) affirmed OPM's findings, and Casarez appealed to the Federal Circuit.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Calculation of Overpayment	Overpayment calculation was incorrect due to SSA benefits offset by workers’ comp (not received) and deduction for health insurance premiums.	OPM correctly calculated the overpayment based on SSA benefits entitled, and gross pay rates for FERS, excluding the claimed offsets and deductions.	OPM’s overpayment calculation was supported by substantial evidence and was correct.
Waiver of Overpayment	Recovery should be waived; not at fault, and recovery is against equity/good conscience.	Casarez was on notice and should have set aside retroactive SSA payment, so waiver is not warranted under equity/good conscience standard.	No waiver; Casarez was on notice, so recovery was not against equity and good conscience.
Financial Hardship & Repayment Terms	Sought reduced monthly repayment installments, claiming financial hardship.	Casarez did not provide sufficient financial information to establish hardship warranting modified payments.	No adjustment; insufficient evidence of financial hardship to justify lower payments.
Adequacy of Notice	Claimed OPM’s letters caused confusion and uncertainty about set-aside obligations.	OPM provided multiple clear notices about the need to set aside payments for repayment.	Substantial evidence showed Casarez received adequate notice of repayment obligations.

Boyd v. OPM, 851 F.3d 1309 (Fed. Cir. 2017) (explaining the "Set-Aside Rule" for waivers of FERS overpayments)
Leighton v. OPM, 529 F.3d 1071 (Fed. Cir. 2008) (overpayment calculation must use the SSA benefit amount before any adjustments for workers’ compensation)
McIntosh v. Dep’t of Def., 53 F.4th 630 (Fed. Cir. 2022) (standards for review of MSPB decisions)