Denial of Application for Waiver of Debt

A former Air Force member requested reconsideration of the Claims Division denial of his application for waiver of his debt to the United States. When the member was discharged he received a separation payment in the amount of $650 which exceeded his entitlement by $320.36. Further, after discharge he received a regular midmonth payment and a regular end of the month payment resulting in a total erroneous payment of $709.07. In his initial request for waiver, the member contended that he was hospitalized overseas and subsequently air evacuated to Texas where he continued to receive treatment for 6 weeks or more before his discharge and did not receive payroll information during that period. He believed that the additional pay was due to an erroneous absence without leave, that his pay was being deposited in a Utah bank, and that he did not receive an itemized statement of his final pay or a leave and earnings statement with the pay. Legislation provides that waiver can be granted for certain debts when collection would be against equity and good conscience and not in the best interests of the United States. However, waiver is precluded if an indication of fraud, misrepresentation, fault or lack of good faith exists on the part of the individual concerned. Fault exists if in the light of all the facts it is determined that the individual should have known that an error existed and should have taken action to have it corrected. In this case, it appeared that the member was not furnished sufficient information to determine that he was overpaid in the final discharge payment or that he was aware of an error which he might have corrected until he was notified of that error by the Air Force. GAO held that the excess payment of $320.36 should be waived. However, when the member received the midmonth and the end of the month payments, he should have known that he was receiving monies to which he was not entitled. Therfore, he had an obligation to take action to have the error corrected. Since he did not do so, he was not free from fault. Collection action was not against equity or good conscience, nor contrary to the best interests of the United States. Accordingly, waiver was granted for the excess payment of $320.36, but denied for the $388.71 the individual received after discharge.