Request for Waiver of Debt

B-197108: Oct 10, 1980

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A Navy member requested reconsideration of the denial of his request for waiver of his dependency debt which arose from erroneous payments of basic allowance for quarters (BAQ) at the with-dependent rate paid to him based on his wife's dependency; she was also a member of the Navy. The previous decision concluded that since the member did not claim his wife as a dependent when he completed the Dependency Application following his marriage, he was aware that he would not be entitled to BAQ on her behalf. The increase in his normal semimonthly pay should have put him on notice that an erroneous BAQ credit was being made. Therefore, his application for waiver was denied. In his request for reconsideration, the member questioned the correctness of the conclusions of the Claims Division. He stated that he obtained all the expertise anyone could reasonably ask for in trying to determine his eligibility for BAQ, and that collection of the overpayment would pose an extreme financial hardship. GAO found that although the erroneous payments appeared to have been made as the result of administrative error, it was clear that the member had reason to know, and did suspect, that erroneous payments were being made. Although he inquired about the correctness of his BAQ, GAO held that he was not without fault since the amount of the debt was substantial. He should have known that he was being overpaid, and he should have pursued his inquiries. Financial hardship alone is not a sufficient reason to retain the payments he should have known did not belong to him. GAO was unable to conclude that the member was free from fault. Accordingly, the action of the Claims Division denying the waiver was sustained.