[Request for Waiver of Erroneous Payments]

A former employee of the Community Services Administration (CSA) and the Department of Health and Human Services (HHS) requested a waiver of his indebtedness which resulted from the reduction of his backpay award by deductions of refunded retirement contributions, payments of severance pay, a lump-sum payment for annual leave, and retirement contributions covering the period of his improper separation from government service. The Claims Group forwarded the request and asked whether refunded retirement contributions were properly deducted from his backpay. The employee had been separated from his position with CSA as a result of a reduction in force and was reinstated with HSS by court order because his function was transferred to HHS. His appointment with HHS was retroactive to the date of his dismissal. However, retirement contributions, severance pay, lump-sum leave pay, and unpaid retirement contributions were deducted from his backpay contribution, leaving the employee indebted to the government. GAO stated that, when an unjustified or unwarranted personnel action is corrected, the employee's pay and allowances must be computed as if the personnel action had not occurred. Since the employee was regarded as never having been separated and refunded retirement contributions are not subject to waiver by GAO, the employee's refunded retirement contributions must be deducted from his backpay award but his net indebtedness could be considered for waiver by the Office of Personnel Management. GAO found that the employee's indebtedness for payments of severance pay and the lump-sum leave payment were erroneous payments which could be waived because the employee was not at fault in the matter. Since an employee who is restored to duty following an erroneous separation is deemed to have performed government service during the period of separation and such service is creditable for retirement purposes, the employee must remit these contributions to the agency to receive full credit for the period of separation. Collection of that amount may not be waived since no erroneous payment was made.