The opinion
UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
SHARON E. BROWN, DOCKET NUMBER
Appellant, PH-0845-19-0412-I-1
v.
OFFICE OF PERSONNEL DATE: December 4, 2024
MANAGEMENT,
Agency.
THIS ORDER IS NONPRECEDENTIAL 1
Sharon E. Brown , Towson, Maryland, pro se.
Michael Shipley , Washington, D.C., for the agency.
BEFORE
Cathy A. Harris, Chairman
Raymond A. Limon, Vice Chairman
Henry J. Kerner, Member
REMAND ORDER
The appellant has filed a petition for review of the initial decision, which
affirmed the final decision of the Office of Personnel Management (OPM) finding
that she had been overpaid $21,834.88 in Federal Employees’ Retirement System
(FERS) disability retirement annuity benefits and denying her request for a
1
A nonprecedential order is one that the Board has determined does not add
significantly to the body of MSPB case law. Parties may cite nonprecedential orders,
but such orders have no precedential value; the Board and administrative judges are not
required to follow or distinguish them in any future decisions. In contrast, a
precedential decision issued as an Opinion and Order has been identified by the Board
as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
2
waiver of the overpayment, but modified the repayment schedule. For the reasons
discussed below, we GRANT the appellant’s petition for review, VACATE the
initial decision, and REMAND the case to the Northeastern Regional Office for
further adjudication in accordance with this Remand Order.
BACKGROUND
The appellant was a FERS-covered employee for the Social Security
Administration (SSA), with a service computation date of April 1, 2002. Initial
Appeal File (IAF), Tab 8 at 228. She last reported to duty on May 15, 2015, and
in October 2015, she applied for disability retirement benefits. IAF, Tab 1
at 122, Tab 8 at 220-22, 156, 175.
By letter dated February 23, 2017, OPM approved the appellant’s
application for disability retirement. IAF, Tab 8 at 76-79. OPM notified the
appellant that, once she separated from service and SSA notified it of her last day
in pay status, OPM would begin authorizing interim payments. Id. at 76. On
February 27, 2017, SSA informed OPM that the appellant’s last day in pay status
was the same as her last day in duty status—May 15, 2015. Id. at 156-57. On
March 2, 2017, the appellant separated from service, and on March 3, 2017, she
began receiving interim disability annuity payments, including a retroactive
lump-sum payment. IAF, Tab 1 at 116, Tab 8 at 26, 146, 233.
Subsequently, OPM learned that May 15, 2015, was not actually the
appellant’s last day of pay. IAF, Tab 8 at 152-53, 233. Rather, the appellant’s
Individual Retirement Record (IRR) showed that her last day in pay status was
October 5, 2016, and SSA later confirmed that it had paid the appellant for 8
hours of annual leave on that date. IAF, Tab 8 at 147, 233, Tab 14 at 5-10.
Because the appellant had turned 62 years old in September 2016, prior to her
actual last day in pay status, OPM determined that she was not entitled to a
disability retirement annuity, but rather a basic (or “earned”) annuity,
commencing October 6, 2016. IAF, Tab 8 at 24-25.
3
Eventually, OPM issued a final decision finding that it had overpaid the
appellant $21,834.88 in annuity benefits, which it proposed to collect through
229 monthly installments of $95, and a final installment of $79.88. Id. at 21-25.
Specifically, OPM determined that $21,834.88 was the difference between the
basic annuity payments to which the appellant was entitled and the interim
disability retirement annuity payments that she had actually received. Id. at 24,
26-27. This difference was owing both to the later start date for the basic annuity
(October 2016 instead of March 2016) and the lower monthly amount of the basic
annuity (approximately $680 per month instead of approximately $1,853 per
month). Id.
This appeal followed. IAF, Tab 1. The appellant contested the change of
her disability retirement annuity to a regular annuity and the resulting
overpayment, and she argued that she could not afford to repay the overpayment.
IAF, Tab 1 at 19-20, Tab 12 at 2-3, 9, Tab 17, Hearing Compact Disc (HCD)
(testimony of the appellant). After a hearing, the administrative judge affirmed
OPM’s final decision as to the existence and the amount of the overpayment.
IAF, Tab 20, Initial Decision (ID) at 1, 3-4. She also found that the appellant did
not provide a sufficient basis to waive collection, but she nevertheless adjusted
the repayment schedule to 1,455 monthly installments of $15 and a final
installment of $9.88. ID at 5-7.
The appellant has filed a petition for review arguing that SSA made a
mistake in placing her on annual leave on October 5, 2016, she is entitled to a
disability retirement annuity, and collection of any overpayment should be
waived based on financial hardship. Petition for Review (PFR) File, Tab 1 at 2,
4, 10. OPM has filed a response. PFR File, Tab 4.
4
DISCUSSION OF ARGUMENTS ON REVIEW
Existence and Amount of the Overpayment.
OPM’s final decision, and hence this Board appeal, concerns both the
appellant’s eligibility for disability retirement and, contingent on that eligibility,
an overpayment of annuity benefits. In an appeal from an OPM decision on a
voluntary disability retirement application, the appellant bears the burden of
proof by preponderant evidence. Thorne v. Office of Personnel Management,
105 M.S.P.R. 171, ¶ 5 (2007); 5 C.F.R. § 1201.56(b)(2)(ii). However, OPM bears
the burden of proving by preponderant evidence the existence and amount of an
annuity overpayment. Vojas v. Office of Personnel Management, 115 M.S.P.R.
502, ¶ 10 (2011); 5 C.F.R. § 845.307(a). In the context of this case, these issues
are intertwined. For the reasons explained in the initial decision, we agree with
the administrative judge that the current record supports OPM’s determination
that the appellant was not entitled to disability retirement and, hence, was
overpaid $21,834.88 in annuity benefits. ID at 2-4. However, as set forth below,
we find it appropriate to remand the appeal for further evidence and argument on
the issue of the appellant’s eligibility.
Knowing that her last day in pay status was the key issue that needed to be
resolved in order to obtain disability retirement, the appellant requested that the
SSA correct her IRR. On January 29, 2019, an SSA Employee Assistance
Program Counselor emailed OPM, stating that the appellant’s last day in pay
status was May 15, 2015. IAF, Tab 8 at 70. However, OPM was not willing to
accept this email as an administratively sufficient basis to amend its records,
insisting that any correction to the appellant’s last day in pay be certified on a
Standard Form (SF) 3100 or SF 3101-101. Id. at 129, 137. OPM followed up
with SSA and requested a final answer on which date to use as the appellant’s last
day in pay status. Id. at 146, 150. After some inconclusive internal discussions,
SSA reported to OPM that the appellant’s time and attendance record for
October 5, 2016, reflected 8 hours of annual leave, so SSA was confirming that as
5
her last date in pay. Id. at 147-50. Both OPM and the administrative judge used
this date in their respective decisions. ID at 4; IAF, Tab 8 at 24-25.
It is undisputed that SSA paid the appellant for 8 hours of annual leave on
October 5, 2016. ID at 4; IAF, Tab 8 at 233, Tab 14 at 2-10, Tab 18 at 5; PFR
File, Tab 1 at 1-2, 4. It is also undisputed that this payment of annual leave,
which netted the appellant a total of $9.47, rendered her ineligible for FERS
disability retirement and caused her to incur a $21,834.88 overpayment.
However, the appellant has, at every point in these proceedings, argued that the
payment was an administrative error that should be reversed, but she has yet to
receive an independent review of the issue. IAF, Tab 1 at 5, Tab 8 at 65; PFR
File, Tab 1 at 1-2, 4. We find that she is entitled to one.
IRRs are important documents that form the basis for OPM benefits
determinations. See generally 5 C.F.R. § 841.504; OPM, Civil Service
Retirement System and FERS Handbook, Individual Retirement Records and
Registers of Separations and Transfers, ch. 81, part 81A2 (April 1998), https://
www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/
c020.pdf . An applicant for benefits has the right to contest the accuracy of the
information contained in her IRR. She may do so in the context of an OPM
benefits determination or a Board appeal of a final OPM decision affecting her
rights or interests under the retirement statutes. Lisanti v. Office of Personnel
Management, 573 F.3d 1334, 1340 (Fed. Cir. 2009); Billinger v. Office of
Personnel Management, 206 F.3d 1404, 1407 (Fed. Cir. 2000); Beal v. Office of
Personnel Management, 122 M.S.P.R. 210, ¶¶ 6-8 (2015); Conner v. Office of
Personnel Management, 120 M.S.P.R. 670, ¶¶ 4-7 (2014).
We have carefully reviewed the record in this appeal, and we find that there
is no evidence, such as a documented leave request, that would support SSA’s
decision to charge the appellant annual leave on October 5, 2016. In fact, the
appellant specifically denies requesting leave on that date. PFR File, Tab 1 at 1.
Nor is there a coherent explanation of how this happened. After a great deal of
6
internal correspondence, the most that the SSA human resources officials could
tell OPM was that SSA could not correct the last date of pay because the
appellant had “received 400 hours pay from [Family and Medical Leave Act
(FMLA)] and another 158 hours from a leave share program.” IAF, Tab 8
at 147-52, 175-76. However, it is not clear to us what the appellant availing
herself of FMLA and shared leave has to do with the matter at hand. We are not
talking about 558 hours of (possibly unpaid) leave on unspecified dates; we are
talking about 8 hours of paid annual leave on a very specific date—October 5,
2016. Moreover, the very same Employee Assistance Program Counselor who
gave this explanation also stated consistently that the appellant’s last date of pay
should have been May 15, 2015. Id. at 121, 175-76. He elsewhere gave a
somewhat different explanation for SSA’s inability to amend its records: “I
understand that there may be a discrepancy about that date which I believe was
caused by donated leave but, unfortunately, her pay card cannot be amended due
to her being separated from this agency.” Id. at 154. This explanation likewise
does not give us any confidence that the October 5, 2016 payment was proper. In
fact, it suggests that the only thing standing in the way of a correction was some
sort of technical limitation in SSA’s recordkeeping system.
We appreciate that the appellant’s IRR is accurate in the sense that it
reflects that she was, in fact, paid for 8 hours of annual leave on October 5, 2016.
However, this begs the real question of whether the appellant should have been
paid on that date in the first place. To hold that the appellant is without a judicial
remedy for an action by her employing agency that majorly affected her rights
and interests under FERS is an “absurd result[] . . . to be avoided.” Lisanti,
573 F.3d at 1339 (quoting Wassenaar v. Office of Personnel Management,
21 F.3d 1090, 1092 (Fed. Cir. 1994)). We find instead that the Board’s
jurisdiction extends to this underlying issue and that the parties should have a full
and fair opportunity to develop the record on it.
7
In her petition for review, the appellant stated that she was still seeking
help from the SSA Employee Assistance Program Counselor but that he was on
leave for medical reasons at the time. PFR File, Tab 1 at 2, 4. Bearing in mind
that the appellant has the burden of proving her entitlement to benefits, on
remand, the parties will have an opportunity to call this individual or another
appropriate SSA official as a witness at a supplemental hearing to explain why
SSA has inconsistent representations about the appellant’s last day of duty status
and pay, and to obtain other relevant evidence from SSA according to the Board’s
procedures. In particular, it would be helpful to have the appellant’s time and
attendance records for the 2015 to 2017 time period, documentary evidence of
any annual leave request that the appellant may have made for October 5, 2016, 2
and any other documentary evidence of the appellant’s leave usage, leave status,
and leave balances (if any) from May 2015 onward. This pay action has
numerous indicia of being some kind of administrative error, including its
seemingly isolated nature, the apparent absence of a leave request, its deposit into
an unused bank account, and the lack of any clear explanation for it. However,
with the current state of the record, we cannot decide the issue one way or the
other.
Waiver
If, after receiving additional evidence and argument on remand as
described above, the administrative judge still finds that OPM has proven the
existence and the amount of the overpayment, then the administrative judge must
revisit the issue of waiver.
An appellant bears the burden of establishing her entitlement to a waiver of
recovery of an overpayment by substantial evidence. Boone v. Office of
2
On petition for review, the appellant specifically denies making any such request.
PFR File, Tab 1 at 1. If the appellant did not, in fact, request annual leave for
October 5, 2016, the Board would like to know whether there are any circumstances in
which SSA is authorized to place an employee in paid annual leave status against her
wishes or if SSA concedes that this was administrative error.
8
Personnel Management, 119 M.S.P.R. 53, ¶ 5 (2012); 5 C.F.R. § 845.307(b).
Generally, the recovery of a FERS overpayment should be waived if the recipient
is without fault and recovery would be against equity and good conscience.
5 U.S.C. § 8470(b); Boone, 119 M.S.P.R. 53, ¶ 5; 5 C.F.R. § 845.301. As
relevant here, recovery is against equity and good conscience when it would
cause financial hardship. 3 Boone, 119 M.S.P.R. 53, ¶ 5; 5 C.F.R. § 845.303(a).
OPM determined that the appellant was without fault in creating the overpayment,
a position with which the administrative judge implicitly agreed. IAF, Tab 8
at 24; ID at 5. Because the parties do not dispute that finding here, we decline to
disturb it. On review, the appellant disputes the administrative judge’s
determination that she failed to prove financial hardship entitling her to a waiver
of the overpayment. ID at 5-6; PFR File, Tab 1 at 2.
Financial hardship may exist when the annuitant needs substantially all of
her income and liquid assets to meet current ordinary and necessary living
expenses and liabilities. Malone v. Office of Personnel Management, 113
M.S.P.R. 104, ¶ 4 (2010); 5 C.F.R. § 845.304. OPM’s regulations specify that
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 are ordinary and necessary. Stewart v. Office of
Personnel Management, 102 M.S.P.R. 272, ¶ 7 (2006); 5 C.F.R. § 845.305.
In determining whether living expenses are “ordinary and necessary,” the
Board applies a reasonable person test regardless of the annuitant’s accustomed
standard of living, taking into account the discrete circumstances particular to
3
OPM policy further provides that individuals who know or suspect that they are
receiving overpayments are expected to set aside the amount overpaid pending
recoupment and that in the absence of exceptional circumstances—which do not include
financial hardship—recovery in these cases is not against equity and good conscience.
Knox v. Office of Personnel Management, 107 M.S.P.R. 353, ¶ 8 (2007). Here, there is
no indication that the appellant knew or suspected that she was receiving overpayments.
9
individual situations. Stewart, 102 M.S.P.R. 272, ¶ 7. Although ordinary and
necessary expenses should be reasonable under the circumstances, the Board
gives the appellant the benefit of the doubt unless the expense clearly constitutes
an extravagance or a luxury. Malone, 113 M.S.P.R. 104, ¶ 7.
For purposes of determining whether an annuitant is entitled to waiver of
the overpayment on the ground of financial hardship, the annuitant’s monthly
expenses are calculated by adding the following figures: (1) the annuitant’s
ordinary and necessary monthly expenses; and (2) $50 for emergency expenses,
as allowed by OPM. Spinella v. Office of Personnel Management , 109 M.S.P.R.
185, ¶ 11 (2008). The total monthly expense figure is then subtracted from total
monthly income to ascertain the annuitant’s income/expense margin. Id. Once an
annuitant’s income/expense margin is determined, the Board will consider the
annuitant’s total financial condition, and determine whether the annuitant needs
substantially all her current income and liquid assets to meet current and ordinary
living expenses and liabilities. Id.
The appellant did not provide OPM with a Financial Resources
Questionnaire (FRQ), but she submitted one during the proceedings below, which
the administrative judge considered. IAF, Tab 8 at 25, Tab 16. According to this
FRQ, the appellant had $213.74 in liquid assets. IAF, Tab 16 at 3. She listed
$2,515.43 as her average monthly income and $3,659.02 as her average monthly
expenses. 4 Id. at 2. As the administrative judge noted, the appellant included
both a monthly mortgage amount and $729.30 per month in taxes. IAF, Tab 16
4
In her FRQ, apparently completed in November 2019, the appellant noted that the
$1,442.09 she listed in monthly mortgage payments was the amount her mortgage would
be increased to beginning on December 1, 2019. IAF, Tab 16 at 2. Accordingly, the
appellant’s assertion on review that her mortgage payments have now increased to this
amount has already been taken into account. PFR File, Tab 1 at 2. The credit report
she provides on review in support of her mortgage payments is therefore not material to
our decision. See Russo v. Veterans Administration, 3 M.S.P.R. 345, 349 (1980)
(explaining that the Board will not grant a petition for review based on new evidence
absent a showing that it is of sufficient weight to warrant an outcome different from
that of the initial decision).
10
at 2; ID at 6. The administrative judge found it likely that the appellant’s taxes
are included in her mortgage. ID at 6. Regarding the $254.15 that the appellant
listed in monthly payments on existing installment contracts and other debts, she
only explained where $165 of that amount went. IAF, Tab 16 at 2-3. Moreover,
the administrative judge noted that the debt she paid $165 per month on was
scheduled to be paid off in 2 years. ID at 6. The appellant does not challenge
these findings on review, and we see no reason to disturb them. Accordingly, we
subtract the $729.30 and $254.15 figures listed in the appellant’s expense column,
add $50 in emergency expenses, and calculate her average monthly expenses to
be $2,725.57. This is $210.14 more than the appellant’s average monthly income.
When an appellant is without fault regarding an overpayment and needs all
of her income and liquid assets to meet current ordinary and necessary living
expenses and liabilities, the Board has found financial hardship warranting a
waiver. See, e.g., Stewart, 102 M.S.P.R. 272, ¶ 10; Hudson v. Office of Personnel
Management, 87 M.S.P.R. 385, ¶ 12 (2000); Tatum v. Office of Personnel
Management, 82 M.S.P.R. 96, ¶ 21 (1999). 5 Here, however, we do not find that
the record establishes by substantial evidence that the appellant currently has a
negative income/expense margin. For one, the appellant’s FRQ was apparently
completed in November 2019, and it seems probable that by now her financial
condition has changed. See Spinella, 109 M.S.P.R. 185, ¶ 12 (finding that a
negative income/expense margin of $480 suggested that the appellant might be
entitled to a waiver based on financial hardship and remanding to the
administrative judge because the appellant’s FRQ was nearly 2 years old and he
claimed on review that his financial condition had deteriorated).
5
The administrative judge found that the appellant failed to establish financial hardship
entitling her to a waiver but did establish financial hardship entitling her to an
adjustment. ID at 6-7. Because, as represented below, the appellant’s expenses and
liquid assets exceeded her income, we find it unnecessary to determine whether it is
appropriate to make a distinction between financial hardship for waiver and financial
hardship for an adjustment.
11
Additionally, the appellant failed to explain or substantiate a number of
items listed in her FRQ. For instance, she listed $1,828 in monthly disability
benefits, but because she did not specify the source, it is unclear whether she
included in that amount her FERS basic annuity payments. IAF, Tab 16 at 2. The
appellant failed to state whether she paid any taxes other than her mortgage taxes;
questioned her own listed clothing and transportation expenses; and indicated that
she has no medical or dental expenses, which appears unreasonable absent an
explanation. Id. As indicated above, she accounted for only $165 of her claimed
$254.15 monthly installment payments on other debts. Id. at 2-3. Accordingly,
we do not find that the appellant’s claimed income and expenses are complete and
reasonable on their face. See Spinella, 109 M.S.P.R. 185, ¶ 11 (finding that in the
absence of a specific challenge by OPM, an appellant seeking waiver of an
annuity overpayment should not be required to substantiate his expenses and
income unless the information submitted appears incomplete or unreasonable on
its face). For the reasons above and because the administrative judge did not
inform the appellant of what evidence she needed to provide in support of her
financial hardship claim, we find it appropriate to remand this appeal for further
adjudication of this issue. See Malone, 113 M.S.P.R. 104, ¶ 9 (remanding to
allow the appellant an opportunity to present evidence on whether a new expense
was reasonable and to submit an updated FRQ with supporting documentation);
Starr v. Office of Personnel Management, 81 M.S.P.R. 633, ¶ 7 (1999)
(remanding to afford the appellant an opportunity to present evidence to establish
his monthly income and expenses, and cautioning that—if he failed to cooperate
by providing requested information—his repayment schedule would not be
adjusted); Harless v. Office of Personnel Management, 71 M.S.P.R. 110, 113
(1996) (finding that an administrative judge should give an appellant a chance to
submit current financial information if the evidence initially submitted is
incomplete, confusing, or out of date).
12
ORDER
For the reasons discussed above, we remand this case to the Northeastern
Regional Office for further adjudication in accordance with this Remand Order.
FOR THE BOARD: ______________________________
Gina K. Grippando
Clerk of the Board
Washington, D.C.