Nancy C. Warrender v. Office of Personnel Management
Background
- OPM approved Warrender's FERS disability retirement in January 2006 and twice notified her she must apply for SSA disability benefits and, if approved, notify OPM and set aside any SSA retroactive payment to cover duplicate payments.
- SSA awarded disability benefits effective August 1, 2009; OPM determined Warrender had been overpaid $51,348 for Aug. 1, 2009–Feb. 2015 and proposed recovery by monthly installments.
- OPM denied Warrender's reconsideration request, finding the overpayment amount correct, that she was not eligible for waiver because she should have set aside SSA retroactive funds, and that recovery would not be against equity and good conscience.
- Warrender appealed to the MSPB, withdrew her hearing request, and the administrative judge (AJ) found OPM established the overpayment and that she was at fault, denying waiver but reducing the repayment schedule to 342 payments of $150 and a final $48 installment due to demonstrated financial hardship.
- On petition for review, the Board affirmed the AJ: (1) OPM proved existence/amount of the overpayment; (2) Warrender was at fault because she was notified and should have known payments were erroneous; (3) waiver denied because the set-aside rule bars waiver absent exceptional circumstances; (4) the AJ’s reduction of the repayment schedule for financial hardship was appropriate and left intact.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence/amount of overpayment | No overpayment; needed funds for basic needs and direct deposit was beyond her control | OPM calculated overpayment after SSA award and notified appellant; amount correct | OPM established existence and amount; affirmed |
| Fault for creating overpayment | She was not at fault; did not control direct deposits and needed the money | OPM notified her twice about SSA approval consequences and to set aside retroactive payments | Appellant was at fault (knew or should have known payments were erroneous); affirmed |
| Entitlement to waiver (equity & good conscience) | Waiver should be granted due to financial condition | Set-aside rule applies; waiver unavailable absent exceptional circumstances (financial hardship alone insufficient) | Waiver denied; no exceptional circumstances shown; affirmed |
| Repayment schedule adjustment | Argued current schedule causes inability to pay rent/food; sought relief | OPM proposed 150-month schedule; will consider mid-collection adjustments on changed circumstances | AJ reduced schedule to 342 payments of $150 + final $48 for hardship; Board upheld reduction and noted further adjustments must be requested from OPM |
Key Cases Cited
- James v. Office of Personnel Management, 72 M.S.P.R. 211 (MSPB 1996) (set-aside rule and fault analysis)
- Zucker v. Office of Personnel Management, 114 M.S.P.R. 288 (MSPB 2010) (waiver statutory standards)
- Martin v. Office of Personnel Management, 49 M.S.P.R. 134 (MSPB 1991) (procedure for repayment-schedule adjustments)
- Pinat v. Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991) (failure to meet court filing deadlines cannot ordinarily be excused)