UNITED STATES OF AME RICA MERIT SYSTEMS PROTEC TION BOARD

MARK S. HUNTER, Appellant,

v.
OFFICE OF PERSONNEL MANAGEMENT, Agency. DOCKET NUMBER SF

- 0845

- 15

- 0711

- I

- 1

DATE: August 19, 2016



### THIS FINAL ORDER IS NONPRECEDENTIAL *

Mark S. Hunter , Atwater, California, pro se.
Karla W. Yeakle , Washington, D.C., for the agency.

BEFORE Susan Tsui Grundmann, Chairman Mark A. Robbins, Member

FINAL ORDER ¶1 The appellant has filed a petition for review of the initial decision, which affirmed the reconsideration decision of the Office of Personnel Management (OPM) . Generally, we grant petitions such as this one only when: the initial decision contains erroneous findings of material fact; the initial dec ision is based

* A nonprecedential order is one that the Board has determined does not add significantly to the body of MSPB case law. Parties may cite nonprecedential orders, but such orders have no precedential value; the Board and administrative judges are not required to follow or dis tinguish them in any future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
on an erroneous interpretation of statute or regulation or the erroneous application of the law to the facts of the case; the administrative judge ’ s rulings during either the course of the appeal or the initial decision were not consistent w ith required procedures or involved an abuse of discretion, and the resulting error affected the outcome of the case; or new and material evidence or legal argument is available that, despite the petitioner ’ s due diligence, was not available when the recor d closed. See t itle 5 of the Code of Federal Regulations, section 1201.115 ( 5 C.F.R. § 1201.115 ). After fully considering the filings in this appeal, we conclude that the petitioner has not established any basis under section 1201.115 for granting the petition for review. Therefore, we DENY the petition for review and AFFIRM the initial decision, which is now the Board ’ s final decision. 5 C.F.R. § 1201.113 (b). ¶2 The appellant sustained a work

- related injury while employed with th e U.S. Postal Service, making him eligible for benefits from the Office of Workers ’ Compensation Programs (OWCP) . Initial Appeal File (IAF), Tab 11 at 48. The appellant took his OWCP benefit in a lump

- sum payment of $100,153.62 , i.e. , a schedule award

. Id . at 54. The appellant also became eligible for Social S ecurity disability benefits commencing on November 1, 2009 ; however, he received a reduced benefi t because of his OWCP payment. Id . at 24. Additionally, he became eligib le for a disability retire ment annuity under the Federal Employees ’ Retirement Sy stem (FERS) commencing on June 10 , 2009. Id . at 34. He received both a FERS disability annuity and reduced Social Security disability benefits until June 1, 2012

. ¶3 In a reconsideration decision, OPM found that the appellant had been overpaid $34,246 in disability retirement annuity benefits because OPM had not reduced his FERS annuity to account for his Social Security benefits during the period of time from June 9, 2009, to June 1, 2012

. Id

. at 6. In calculating the overpayment, OPM deemed the appellant to have received the full amount of the Social Security benefit to which he would have been entitled but for the OWCP3
payment, not the reduced Social Security benefit that he actually had rec eived during the period of time that he was overpaid. Id

. at 34. ¶4 In his petition for appeal, the appellant contended that OPM should have calculated the overpayment using only the amount of the Social S ecurity disability benefit that he actually receive d; that is , the benefit as reduce d by his receipt of the OWCP schedule award . IAF, Tab 3

. He did not request a hearing. Based on the written record , the administrative judge found that OPM properly calculated the appellant ’ s overpayment as though he had received 100% of the Social Security benefit to which he would have been entitled had he not received the OWCP award. IAF, Tab 17, Initial Decision (ID) at 5

- 8. He also found that the appellant failed to show that he was entitled to waiver of the overpa yment. ID at 8

- 10. He fou nd that the appellant did not show that he had surrendered a valuable right because of the overpayment or that collection would be patently unfair because of OPM ’ s delay in adjusting h is annuity. ID at 8

- 9. He found further tha t the appellant presented no evidence that collection of the overpayment in the amount of $398 per month for 86 months with a final payment of $18 would cause him financial hardship. ID at 10; IAF, Tab 11 at 9.

DISCUSSION OF ARGUME NTS ON REVIEW ¶5 In his petition for review, the appellant repeats the arguments that he made below, asserting that re covery would be patently unfair and that the administrative judge erred in finding that he was not entitled to waiver

. Petition for Review File, Tab 1. ¶6 A FERS di sability annuity must be reduced by the Social S ecurity disability amount to which the annuitant is entitled, as determined by the Social Security Administration (SSA)

. 5 U.S.C. § 8452 (a)(2) ; M axwell v. Office of Personnel Management , 78 M.S.P.R. 350 , 355 (1998) , overruled on other grounds by Conner v. Office of Personnel Management , 120 M.S.P.R. 670 (2014) ; Johnston v. Office of Personnel Management , 70 M.S.P.R. 109 , 112

– 17, aff ’ d , 99 F.3d4

1160 (Fed. Cir. 1996) (Table) ; 5 C.F.R. § 844.302 (b)(2)

. During the first 12 months after a FERS annuity commences, the FERS ann uity is reduced by 100% of the Social S ecurity disability benefit to which the annuitant is entitled during that period; thereafter, the FERS annuity is reduced by 60% of the S ocial S ecurity disability benefit to which the annuitant is entitled during that period. 5 U.S.C. § 8452 (a)(2)(A); Maxwell , 78 M.S.P.R. at 355 ; 5 C.F.R. § 844.302 (b)(2), (c)(2)

. The Board has found that OPM i s correct in determining t hat it i s required to reduce the appellant ’ s FERS annuity based on the annuitant ’ s entitlement, rather than actual receipt, of Social Security benefits. See Maxwell , 78 M.S.P.R. at 355; cf. H icks v. Office of P ersonnel Management , 44 M.S.P.R. 340 , 343 (1990) ( observing that there is no requirement that the appellant actually receive S ocial S ecurity benefits befor e his annuity will be o ffset under 5 U. S.C. § 8332 (j))

. ¶7 The Board reviewed the relevant statutory and regulatory provisions and conclude d that , notwithstanding that a disability retirement annui tant is in receipt of a schedule award from the OWCP, OPM is correct in its determination that it is required to reduce the appellant ’ s FER S annuity by the full, unreduced Social S ecurity disability insurance amount to which he is entitled , as determined by the SSA , because such amount represents the assumed Social S ecurity disability insurance amount used in computing the appellant ’ s FERS annuity. See Johnston , 70 M.S.P.R. 109 , 111

. The Board found that nowhere in the relevant legislation as proposed or enacted is there any expression of Congress that a FERS annuitant ’ s annuity should not be reduced by all of the Social Security benefits to which he is entitl ed. Id . at 11 6. ¶8 The Board noted that the Social Security component is the largest component of FERS and found that it is reasonable that any deductions required would be from the p rimary component and would be taken by the S SA from the full amount of th e Social S ecurity disability insurance benefit. The FERS disability annuity is offset by the unreduced Social S ecurity disability insurance amount to avoid any duplicate payments. For example, if the SSA already offset5

the appellant ’ s Social S ecurity di sability insurance benefit by an OWCP schedule award and the entire amount of such disability benefit is offset from FERS, the appellant receives no duplicate payments

— the payments from OWCP , the payment from the SSA, and the FERS annuity contain no duplic ate benefits. Id

. ¶9 The U.S. Court of Appeals for the Federal Circuit affirmed the Board ’ s reasoning . The court held that OPM ’ s interpretation of the controlling statute , as manifested in the regulat ion designed to implement the statute , is not

unreasona bl e

. See Johnston v. Office of Personnel Management , 99 F.3d 1160 , 1163 (Fed. Cir. 1996) ( Table )

. The court found that OPM ’ s interpretation

ess entially leaves to the SSA the task of adjusting the SSA benefits in light of, e.g., OWCP awards and schedule payments

. Id

. Applying the Board ’ s and the

court ’ s Johnston decisions in the overpayment context, O PM also properly uses the full amount that the SSA calculates as an employee ’ s benefit entitlement in both the adjustment of the FERS annuity and the calculation of any overpayment caused by temporary dual payment by the SSA and FERS. ¶10 Regarding waiver, t he appellant asserts that he is entitled to waiver because OPM failed to notify him of the correct amount of the overpayment for 3 years and only told him to set aside the amount that he was receiving from SSA, an amount that is insufficient to pay the overpayment . The appel lant contends that OPM should have informed him of its method to calculate the overpayment as OPM was aware that the SSA disability payment had been reduced because of his OWCP s chedule a ward

. ¶11 The appellant bear s the burden of establishing his entitlemen t to a waiver of recovery of the overpayment by substantial evidence. See Knox v. Office of Personnel Management , 107 M.S.P.R. 353 , ¶ 5 (2007). To be entitled to a waiver, the appellant must meet a two

- part test. He must show by substantial evidence that: (1) he is without fault in creating the overpayment; and (2) recovery of the overpayment would be against equity and good conscience. 5 U.S.C. § 8470 (b); 5 C.F.R. § 845.301 ; see, e.g. , Parker v. Office of6

Personnel Management , 75 M.S.P.R. 688 , 692 (1997); Sawyer v. Office of Personnel Management , 74 M.S.P.R. 527 , 530 (1 997) Here, the administrative judge determined that it was undisputed that the appellant was without fault. ID at 8. Recovery is against equity and good conscience when it would cause financial hardship, the annuitant can show that he relinquished a val uable right or changed positions for the worse, or recovery would be unconscionable under the circumstances. Knox , 107 M.S.P.R. 353 , ¶ 8; 5 C.F.R. § 845.303

. ¶12 We agree wit h the administrative judge that , even if the appellant is without fault, because he failed to submit evidence to show that repaying the overpayment would cause him financial hardship, he failed to show that he is entitled to waiver on that basis. We also agree that the appellant failed to show that the fact that he used the overpayment in part to pay ex isting debts, service his roof, and pay needed living expenses does not rise to the level necessary to show that he changed position for the worse or surrendered a valuable right . We further agree that, contrary to the appellant ’ s assertion on petition fo r review, OPM informed him that it would reduce his FERS disability a nnuity by the amount to which SSA determin ed that h e was entitled as disability payments. IAF, Tab 11 at 17 , 34

. I t is unfortunate that the appellant did not read OPM ’ s notifi cation as leading to the calculation of his overpayment using the amount to which the SSA determined he was entitled , prior to the reduction to a ccount for his schedule a ward from the OWCP. N onetheless, we agree with the administrative judge that OPM ’ s communicatio ns with the appellant did not render recovery unconscionable under the circumstances. Accordingly, we affirm OPM ’ s decision that the appellant must repay OPM the overpayment amount of $34,246 in monthly installments of $398 plus one installment of $18

.7

NO TICE TO THE APPELLAN T REGARDING YOUR FURTHER REVIEW RIGHTS You have the right to request review of this final decision by the U .S. Court of Appeals for the Federal Circuit. You must submit your request to the court at the following address: United Stat es Court of Appeals for the Federal Circuit 717 Madison Place, N.W.

Washington, DC 20439 The court must receive your request for review no later than 60 calendar days after the date of this order. See 5 U.S.C. § 7703 (b)(1)(A) (as rev. eff. Dec. 27, 2012). If you choose to file, be very careful to file on time. The court has held that normally it does not have the authority to waive this sta tutory deadline and that filings that do not comply with the deadline must be dismissed. See Pinat v. Office of Personnel Management , 931 F.2d 1544 (Fed. Cir. 1991). If you need further information about your right to appeal this decision to court, you should refer to the Federal law that gives you this right. It is found in

t itle 5 of the United States Code, section 7703 ( 5 U.S.C. § 7703 ) (as rev. eff.
Dec. 27, 2012). You may read this law as well as other sections of the United States Code, at our website, http://www.mspb.gov/ appeals/uscode.htm

. Additional information is available at the court ’ s website, www.cafc.uscourts.gov . Of particular relevance is the court ’ s “Guide for Pro Se Petitioners and Appellants,” which is contained w ithin the

court ’ s Rules of Practice , and Forms 5, 6, and 11. If you are interested in securing pro bono representation for an appeal to the U .S. Court of Appeals for the Federal Circuit, you may visit our website

at http://www.mspb.gov/probono for informatio n regarding pro bono representation for Merit Systems Protection Board appellants before the Federal Circuit. The8
Merit Systems Protection Board neither endorses the services provided by any attorney nor warrants that any attorney will accept represent ation in a given case.

FOR THE BOARD:

Washington, D.C. ______________________________ Jennifer Everling Acting Clerk of the Board