GUADALUPE CASAREZ, Petitioner v. OFFICE OF PERSONNEL MANAGEMENT, Respondent
2024-2125
United States Court of Appeals for the Federal Circuit
April 14, 2025
NOTE: This disposition is nonprecedential. Petition for review of the Merit Systems Protection Board in No. SF-0845-19-0563-I-1.
BRENDAN DAVID JORDAN, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, for respondent. Also represented by BRIAN M. BOYΝΤΟΝ, TARA K. HOGAN, PATRICIA M. MCCARTHY.
PER CURIAM.
Guadalupe Casarez petitions for review of a final decision of the Merit Systems Protection Board (“the Board“), which denied Casarez‘s petition and upheld the United States Office of Personnel Management‘s (“OPM“) findings regarding its entitlement to collect an overpayment of Casarez‘s Federal Employees’ Retirement System (“FERS“) disability retirement annuity benefits. Casarez v. OPM, No. SF-0845-19-0563-I-1, 2024 WL 2815347 (M.S.P.B. May 31, 2024) (“Final Decision“); Casarez v. Off. of Pers. Mgmt., No. SF-0845-19-0563-I-1, 2019 WL 4923761 (M.S.P.B. Oct. 1, 2019) (“Initial Decision“), R.A. 15-32.1 For the following reasons, we affirm.
BACKGROUND
Casarez was an employee of the United States Postal Service (“USPS“). She applied for disability retirement under FERS on May 29, 2015. R.A. 49-51. Just over a year later, on June 13, 2016, OPM notified Casarez that her application had been approved. R.A. 133-35. OPM‘s approval letter explained that “[b]ecause the FERS disability benefit must be reduced by 100 percent of any Social Security benefit payable for 12 months, Social Security checks should not be negotiated until the FERS benefit has been reduced” and that the “social security checks will be needed to pay OPM for the reduction which should have been made in the FERS annuity.” R.A. 134 (emphasis omitted).
OPM sent Casarez a similar letter on November 7, 2016. This letter explained that “[i]f you are overpaid FERS disability benefits because of receipt of Social Security disability benefits, OPM will send you a notice of the
On March 12, 2018, almost two years after Casarez‘s FERS application was approved, Casarez received a letter from SSA informing her that she was entitled to monthly SSA disability benefits retroactive to August 2014. R.A. 56. About two weeks later, on March 28th, OPM, as it explained would happen in its earlier letters, notified Casarez regarding her overpayment in FERS annuity benefits in light of her incoming, retroactive Social Security benefits. R.A. 124. The letter acknowledged that Casarez was entitled to Social Security benefits effective August 1, 2014, and that such benefits would result in a FERS overpayment by OPM. Id. Consistent with earlier letters, it also informed Casarez that OPM was “required to reduce your FERS disability benefit by the amount of the benefit you are entitled to from the [SSA].” Id. The letter‘s accompanying enclosures provided more details, specifying the total overpayment amount to be collected ($61,531), the first installment date (June 1, 2018), the number of installments (108), and the amount per installment ($570.12 for the first 107 installments and $528.16 for the final installment). R.A. 125.
Casarez filed a timely request for reconsideration on April 4, 2018, which challenged the existence and amount of the overpayment, argued for waiver of overpayment recollection, and, as an alternative to waiver, requested lower monthly repayment installments. R.A. 122. The record contains no evidence that Casarez provided additional details or arguments to substantiate or support her reconsideration request. R.A. 123. OPM then issued a series of
Casarez timely petitioned for review in this court, and we have jurisdiction under
DISCUSSION
Casarez argues that the Board‘s determinations were not supported by substantial evidence. Specifically, Casarez challenges the Board‘s findings regarding OPM‘s overpayment calculation as well as the Board‘s findings regarding OPM‘s waiver decision, including that OPM‘s collection of its overpayment is not against equity and good conscience. If the Board‘s waiver determination is upheld, Casarez alternatively challenges the Board‘s findings regarding OPM‘s determination that she had not shown sufficient evidence of financial hardship to justify a reduction of her monthly repayment installment amounts.
Under
The computation of a FERS disability annuity is governed by
Casarez first argues that OPM‘s calculated overpayment amount is incorrect and should be reduced because (1) the SSA benefit was reduced by workers’ compensation benefits that she never received, and (2) OPM improperly withheld the cost of her health insurance premiums from her FERS annuity. Casarez Br. 2-4. The Board, in view of SSA‘s retroactive Social Security benefits, found that OPM correctly determined that it had overpaid Casarez by $61,531. Final Decision, at *1-3; R.A. 129 (overpayment calculations).
The Board‘s findings regarding the amount of overpayment were supported by substantial evidence. As the Board found, Casarez was entitled to $2,132 in full monthly SSA benefits, and OPM‘s calculations show that her monthly FERS benefits were reduced by that amount during the relevant time period. See R.A. 129 (the difference between the FERS “Old Rate” ($3,990) and the FERS “New Rate” ($1,858) is equal to her full SSA monthly benefit ($2,132)). While Casarez was entitled to workers’ compensation during part of the relevant period, any offset of Casarez‘s Social Security benefits by SSA for her workers’ compensation benefits is not relevant to the FERS overpayment calculation under
OPM was also not required to consider any deductions for health insurance premiums for purposes of determining Casarez‘s FERS annuity overpayment amount. FERS disability annuity amounts are based on a person‘s “average pay,”
Casarez next challenges the Board‘s no-waiver determination. Repayment of FERS overpayments may be waived when, in OPM‘s judgment, the individual “is without fault and recovery would be against equity and good conscience.”
While it is undisputed that Casarez was without fault, the Board found that recovery was not against equity and good conscience, applying the Policy Guidelines’ “Set-Aside Rule.” Final Decision, at *4 (affirming Initial Decision at R.A. 22-23). Under the Set-Aside Rule, “if [the] individual suspected or knew that he or she had received an overpayment (and therefore had an obligation to set aside the overpaid funds), the individual is not eligible for a waiver under the ‘equity and good conscience’ standard and would be entitled to relief only under the more exacting ‘exceptional circumstances’ standard.” Boyd v. OPM, 851 F.3d 1309, 1313-14 (Fed. Cir. 2017). Notably, “[w]hat matters is not what [Casarez] was ‘instructed’ to do, but whether she adverted to and understood that instruction.” Id. at 1315 n.3. That is because “[t]hose individuals [that] do not know that the money does not belong to them . . . may act in good faith when they fail to set aside the overpayments.” Id. at 1315; see Policy Guidelines, § I.C.4.
The Board found that “[Casarez] was certainly aware when she received the [SSA] retroactive payment [that] she was required to set that payment aside to repay the agency” based on OPM‘s November 2016 and March 2018 letters, which Casarez had received before she received her retroactive payment from SSA in June 2018. Initial Decision, R.A. 23 (affirmed by Final Decision, at *4). The Board also found that Casarez‘s alleged financial hardships did “not describe exceptional circumstances.” Final Decision, at *4.
Casarez does not argue that she did not receive those letters or that she misunderstood any specific aspects of the letters. She does however argue more generally that the timing and nature of SSA‘s retroactive payment paired with OPM‘s various letters spanning several years led to uncertainty regarding her set aside obligation. Specifically, she asserts that OPM‘s March 2018 letter stated that her FERS benefits would be reduced but she had yet to
We sympathize with Casarez‘s situation. But the scope of our review is limited. As explained above, the Board‘s finding that Casarez should have known to set aside any Social Security payment that she received—whether in the past or in the future—was supported by substantial evidence. Accordingly, the Board‘s determination that OPM‘s collection of its overpayment was not against equity and good conscience was reasonable.
Finally, we turn to Casarez‘s argument that she is entitled to an adjustment in the recovery schedule prescribed by OPM. Even where an individual is ineligible for waiver of overpayment, she may still be entitled to an adjustment in the recovery schedule if she shows that it would cause financial hardship to make payments at the rate scheduled by the agency.
The Board‘s finding concerning Casarez‘s request for an adjusted monthly repayment amount is supported by substantial evidence. Casarez requested lower installments, R.A. 122, but did not provide a responsive Financial Resources Questionnaire or any statement indicating her financial circumstances, R.A. 123. Casarez therefore failed to show that she needs substantially all of her current income to meet her current ordinary and necessary living expenses and liabilities. Without such information, OPM was not obligated to adjust her FERS repayment amount accordingly.
CONCLUSION
We have considered Casarez‘s remaining arguments but find them unpersuasive. For the foregoing reasons, the Board‘s final decision is affirmed.
AFFIRMED
COSTS
No costs.