UNITED STATES OF AMERICA

MERIT SYSTEMS PROTECTION BOARD 

SHIRLEY L. REYES,

Appellant,

v.

OFFICE OF PERSONNEL 

MANAGEMENT,

Agency.

DOCKET NUMBER

SF-0845-14-0686-I-1

DATE: June 25, 2015

THIS FINAL ORDER IS NONPRECEDENTIAL1

Shirley L. Reyes, Barstow, California, pro se.

Christopher H. Ziebarth, 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) denying her request to waive the collection of an overpayment amount. 

Generally, we grant petitions such as this one only when: the initial decision 

 1 A nonprecedential order is one that the Board has determined does not add 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 Parties may cite nonprecedential orders, 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

contains erroneous findings of material fact; the initial decision is based on an 

erroneous interpretation of statute or regulation or the erroneous application of 

the law to the facts of the case; the judge’s rulings during either the course of the 

appeal or the initial decision were not consistent with 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 record closed. See

Title 5 of the Code of Federal Regulations, section 1201.115 (5 C.F.R. 

§ 1201.115). After fully considering the filings in this appeal, and based on the 

following points and authorities, 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’s disability retirement under the Federal Employees’ 

Retirement System (FERS) was effective May 12, 2012. Initial Appeal File 

(IAF), Tab 5 at 6, 11-14. In her approval letter, OPM advised the appellant that 

she must apply for Social Security disability benefits and immediately notify 

OPM of the amount and effective date of her benefits if she received 

them. Id. at 11-12. OPM informed her that her FERS disability benefits would 

be reduced by 100 percent of any Social Security benefits payable for the first 12 

months she received those benefits. Id. at 12. OPM explained that she should not 

negotiate her Social Security checks until her FERS benefits had been reduced

because she would need the payments she received from the Social Security

Administration to repay OPM. Id. On December 18, 2012, the appellant was 

approved for Social Security Disability Income (SSDI), based on a disability date 

of May 11, 2012. Id. at 24. Her SSDI payment, effective November 2012, was 

$1,496 per month. Id.

¶3 On January 17, 2013, the appellant notified OPM of the SSDI award by 

mail. Id. at 26, 30-31. OPM apparently did not act upon that notice and sent her
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another letter, dated May 25, 2013, inquiring about the status of her application 

for SSDI benefits. Id. at 10. She returned the requested information to OPM by 

facsimile on June 11, 2013. Id. at 40-43. On September 14, 2013, OPM informed 

her that her annuity had been reduced based on the SSDI award. Id. at 32. 

OPM’s letter also informed her that she had received an overpayment of 

$11,455.00. Id. at 33-36. OPM explained that it would collect repayment in 36 

installments of $318.19 per month and a final installment of $0.16. Id. at 33. In 

September 2013, the appellant requested that OPM waive collection of the 

overpayment. Id. at 21-23.

¶4 On reconsideration, OPM affirmed its initial decision. Id. at 5-9. OPM

denied the appellant’s waiver request, but lowered her monthly installment to 

$125.00 for a period of 91 months with a final installment of $80.00. Id. at 8. 

OPM also refunded her $1,908.18, representing six installment payments of 

$138.03 that had been withheld from her annuity payments between December 

2013 and May 2014, after she asked the agency to reconsider its decision to 

collect the overpayment. Id. at 20. This appeal followed. IAF, Tab 1.

¶5 While the appeal was pending, the appellant submitted a Financial 

Resources Questionnaire (FRQ) dated September 19, 2014, in support of her 

assertion that recovery of the overpayment would cause her financial hardship. 

IAF, Tab 10. After a telephonic hearing, the administrative judge issued an 

initial decision finding that OPM met its burden of proving the existence and 

amount of the overpayment. IAF, Tab 17, Initial Decision (ID) at 4-5. Regarding

her request for a waiver, the administrative judge found that the appellant was 

without fault in the overpayment, but that none of the circumstances that would 

support waiver were evident, and that collection of the debt would not be against 

equity and good conscience. ID at 6-8. The administrative judge likewise found 

that adjustment of the repayment schedule was unwarranted because the 

appellant’s expenses did not exceed her monthly income; instead, she was left 

with a $248.79 surplus each month. ID at 9-12.
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¶6 To be entitled to a waiver, an appellant must meet a two-fold part test. She 

must show by substantial evidence that (1) she was 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); Zucker v. Office of Personnel 

Management, 114 M.S.P.R. 288, ¶ 7 (2010). The appellant met her obligation to 

inform OPM of the overpayment, and the administrative judge correctly found 

that she was without fault. See ID at 7.

¶7 Generally, recovery is against equity and good conscience when it would 

cause financial hardship; the annuitant can show that, because of the 

overpayment, she relinquished a valuable right or changed positions for the worst; 

or recovery could be unconscionable under the circumstances. 

Zucker, 114 M.S.P.R. 288, ¶ 7. OPM’s Policy Guidelines provide, however, that 

individuals who know or suspect that they are receiving overpayments must set 

aside the amount overpaid pending recoupment; that absent exceptional 

circumstances, recovery in these cases is not against equity and good conscience;

and exceptional circumstances do not include financial hardship. Id.; see Policy 

Guidelines on the Disposition of Overpayments under the Civil Service 

Retirement System and Federal Employees’ Retirement System § I.C.4 (1995)

(hereinafter Policy Guidelines), located in IAF, Tab 5 at 81-119; see also Boone 

v. Office of Personnel Management, 119 M.S.P.R. 53, ¶ 8 (2012). The appellant 

was undoubtedly aware that she was receiving overpayments. See, e.g., IAF, Tab 

5 at 11-12. The set-aside rule thus applies. When the set-aside rule applies, 

recovery by OPM is not against equity and good conscience and cannot be waived 

absent exceptional circumstances. Exceptional circumstances may include, but 

are not limited to, cases in which: (1) there has been an exceptionally lengthy 

delay by OPM in adjusting an annuity; (2) OPM failed to respond within a 

reasonable length of time to an annuitant’s inquiries regarding an overpayment; 

(3) OPM failed to act expeditiously to adjust an annuity in the face of specific 

notice; or (4) OPM was otherwise grossly negligent in handling the case. King v. 
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Office of Personnel Management, 114 M.S.P.R. 181, ¶ 20 (2010). “Granting a 

waiver based on egregious errors or delays requires a determination that OPM’s 

handling of a case was so offensive—so monstrously harsh and shocking to the 

conscience—that one’s sense of equity forbids recovery.” Policy Guidelines

§ I.F.1.

¶8 On review, the appellant asserts that exceptional circumstances exist here. 

Petition for Review (PFR) File, Tab 1 at 1. Her assertion is unavailing. Although 

OPM did not explain why it failed to process her original notification that she 

was receiving SSDI benefits, see IAF, Tab 5 at 26, 30, it adjusted her annuity 

within 9 months of that notification, cf., e.g., Kellet v. Office of Personnel 

Management, 62 M.S.P.R. 1, 5 (1993) (waiver of overpayment was warranted 

where the appellant’s annuity was not adjusted for more than 10 years, despite 

OPM’s receipt of notice of his election to provide a survivor annuity for his new 

spouse). The administrative judge thus properly found that exceptional 

circumstances do not exist here. ID at 8.

¶9 Even if an appellant is ineligible to receive a waiver, she may still be 

entitled to an adjustment in the recovery schedule if she shows that it would cause 

her financial hardship to make payments at the rate scheduled by the 

agency.

2

 5 C.F.R. § 845.301; see, e.g., Boone, 119 M.S.P.R. 53, ¶¶ 11-12. 

Financial hardship may be deemed to exist if the appellant needs substantially all 

of her current income and liquid assets to meet current ordinary and necessary 

living expenses and liabilities. 5 C.F.R. § 845.304. Pertinent considerations 

include her financial ability to pay when the collection is scheduled to be 

made. 5 C.F.R. § 845.304(a)(1). The appellant bears the burden of proving 

financial hardship by substantial evidence. 5 C.F.R. § 845.307(b). The Board 

 2 A showing of financial hardship warranting an adjustment in the recovery schedule is 

a lesser showing than the showing that would justify a waiver of the recovery of the 

overpayment. See Conway v. Office of Personnel Management, 56 M.S.P.R. 82, 86 

(1992).
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applies a “reasonable person” test in determining whether an appellant’s asserted 

living expenses are ordinary or necessary. Fearon v. Office of Personnel 

Management, 107 M.S.P.R. 122, ¶ 11 (2007). The Board will give an appellant

the benefit of the doubt unless an expense clearly constitutes an extravagance or a 

luxury. Gott v. Office of Personnel Management, 97 M.S.P.R. 538, ¶ 11 (2004). 

¶10 Here, the administrative judge calculated the appellant’s monthly income 

and obligations based on the information she supplied in her September 2014 

FRQ. See IAF, Tab 10. The administrative judge found her gross monthly 

income to be $2,562.00.3

 ID at 10; IAF, Tab 10 at 2. Her approved expenses

totaled $2,313.21, leaving a monthly surplus of $248.79. ID at 10-12; IAF, 

Tab 10 at 2. The administrative judge found her only asset was her car, a nonliquid asset unavailable for recovery of the overpayment. ID at 12; see Spinella

v. Office of Personnel Management, 109 M.S.P.R. 185, ¶ 11 (2008). The initial 

decision thus is correctly decided given the evidence submitted to the 

administrative judge, and we AFFIRM it.

¶11 On review, the appellant argues that she has incurred additional expenses 

resulting from her diabetes, newly-diagnosed kidney disease, and possible heart 

disease. PFR File, Tab 1 at 1. She asserts she has “required several stays in the 

hospital[,] ambulance trips, [a] change of medication and now am required to 

have heart studies and the need for[ ]kidney physician service.” Id. She asserts 

that she has incurred $49,226.00 in unpaid medical bills, 4 and she must now cover 

additional copayments for ongoing medical treatment as well as the purchase of 

new medications, special socks and underwear for diabetes, an orthopedic boot to 

 3 The appellant’s gross monthly income was calculated by adding her FERS monthly 

gross annuity of $1,044.00 and her monthly SSDI payment of $1,518.00. IAF, Tabs 

10-11.

4 It is unclear how much money the appellant owes to health care providers. She 

submitted medical bills for which the unique charges total $49,027.77. PFR File, Tab 1 

at 7-18. Insurance claims were denied for two of these bills. See id. at 7, 9. For other

bills, the appellant received an insurance payment and now owes the providers. See id.

at 8, 10. Additional bills are for copayments. See id. at 11, 13-18.
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support her foot, and specific foodstuffs and bottled water for a special renal 

diet. Id. The appellant avers that her food costs have increased from $205.70, 

see ID at 12, to $500 per month, PFR File, Tab 1 at 2. She also avers that she has 

incurred additional monthly expenses of $240 for debts in collection and $481 for 

medical and dental costs (an increase over $329.65, the amount submitted in her 

September 2014 FRQ). Id.; see IAF, Tab 10 at 2. She additionally asserts that 

she has been threatened with eviction because she is behind on her rent, and that 

her vehicle was repossessed. PFR File, Tab 1 at 1. She included supporting 

documentation postdating the close of the record. Id. at 3-6.

¶12 Although the appellant’s expenses were correctly calculated based on 

information she submitted to the administrative judge, her petition for review 

indicates that she may have considerable new expenses. Some of these expenses 

are partially documented in the petition for review, but others—for example, 

added food costs for her renal diet—require further explanation. Moreover, her

day-to-day living expenses may have changed when her vehicle was repossessed 

or if she was forced to find other housing. Thus, the appellant may submit a 

mid-collection request to OPM where her living expenses may be reexamined. 

See Policy Guidelines § V.F.5; see also Martin v. Office of Personnel 

Management, 49 M.S.P.R. 134, 138-39 (1991) (finding that, should the 

appellant’s financial condition change and her expenses prove overwhelming due 

to unanticipated medical expenses, she could make a mid-collection request to 

OPM for lower payments, compromise, suspension, or write-off, as provided for 

by OPM’s Policy Guidelines). When appropriate, OPM may grant lower 

payments, compromise part or all of the debt, or suspend or terminate collection.

See Policy Guidelines § V.F.5.
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NOTICE TO THE APPELLANT REGARDING

YOUR FURTHER REVIEW RIGHTS

You have the right to request review of this final decision by the United 

States Court of Appeals for the Federal Circuit. You must submit your request to 

the court at the following address:

United States 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 statutory 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 

Title 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 within the 

court’s Rules of Practice, and Forms 5, 6, and 11.

If you are interested in securing pro bono representation for your appeal to 

the Court of Appeals for the Federal Circuit, you may visit our website 

at http://www.mspb.gov/probono for information regarding pro bono 

representation for Merit Systems Protection Board appellants before the Federal 

Circuit. The
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Merit Systems Protection Board neither endorses the services provided by any 

attorney nor warrants that any attorney will accept representation in a given case.

FOR THE BOARD:

Washington, D.C.

______________________________

William D. Spencer

Clerk of the Board