Agencies can waive recovery of overpayments resulting from erroneous payment to an employee of pay or allowances or travel, transportation, or relocation expenses and allowances with an overpayment waiver. (See, 5 U.S.C. 5584)
The head of each agency is responsible for establishing waiver policies and standards and determining levels of approval. Use of the waiver authority is discretionary on the part of the authorized official. A waiver decision must be based on a finding that collection would be against equity and good conscience and not in the best interests of the United States. OPM does not have authority under Section 5584 to waive overpayment debts resulting from erroneous payments of pay and allowances, except for overpayment debts owed to OPM by its own employees.
An employee’s overpayment debt may be waived in whole or in part. If an agency collected some or all of an overpayment debt prior to the granting of a waiver, the agency must refund any amount covered by the waiver if an application for refund is made within two years of the date of the waiver.
An erroneous payment for which collection is waived is deemed to be a valid payment. However, waiver does not make the payment creditable basic pay in computing retirement contributions and benefits.
Other laws allowing for an overpayment waiver in particular circumstances are:
- The law governing federal student loan repayment benefits for federal employees provides discretionary authority to waive, in whole or in part, collection of a debt resulting from an employee’s failure to complete the required period of service, if it is shown that recovery would be against equity and good conscience or against the public interest. (See 5 U.S.C. 5379(c)(3) and 5 CFR 537.109(e).)
- The law governing recruitment and relocation incentives allows waiver of the requirement to repay all or part of a recruitment or relocation incentive for an employee who does not complete the agreed-upon service period when the agency determines collection would be against equity and good conscience and not in the best interest of the United States. (See 5 U.S.C. 5753(g) and 5 CFR 575.111 and 575.211.)
- The law governing physicians comparability allowances provides that a physician who fails to complete at least one year of service is liable to refund allowances received unless the head of the agency waives the liability based on a determination that such failure is necessitated by circumstances beyond the control of the physician. (See 5 U.S.C. 5948(e).)
- The law governing OPM-approved voluntary separation incentive payments (buyouts) provides that OPM may waive repayment of the gross amount of the buyout when reemployment with the government of the United States triggers the repayment requirement. (See 5 U.S.C. 3524(c) and 5 CFR 576.203.) If the reemployment is with an executive agency, the head of that agency must request approval from OPM, which will be granted only if the individual to be hired possesses unique abilities and is the only qualified applicant, or is working on a temporary basis to help resolve an emergency involving a direct threat to life or property and is using directly related skills. If the reemployment is with the legislative branch, the head of the organization or the appointing official may waive the requirement if the individual involved possesses unique abilities and is the only qualified applicant available for the position; if the reemployment is with the judicial branch, the director of the Administrative Office of the U.S. Courts may waive repayment on the same grounds.