Request for Waiver of Debt

A former civil service employee appealed a Claims Group decision which denied his request for waiver of his debt to the United States. The debt arose as a result of an erroneous payment for compensatory time, which was a portion of a lump-sum payment the claimant received upon retirement. The overpayment occurred because the agency failed to consider that the amount the employee could be paid for compensatory leave was limited by law. The record showed that the employee was notified of the error the month after it occurred and was asked to refund the money. The claimant asserted that: 1) he was without fault in the matter; and (2) the money had been invested and was unavailable and, therefore, he should be granted a waiver of the debt. GAO and the courts have held that an individual who receives an erroneous payment from the United States acquires no right to retain the money. Whether the employee recognized the overpayment, when he received it, was not the issue in the case. In this case, GAO did not find it to be against equity or good conscience to require the former employee to return the amount which was erroneously included in his payment. If it is acceptable to the agency, the employee could arrange to repay the debt in installments rather than liquidate his investment. Accordingly, the request for waiver was denied.