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Under 5 U.S.C. 5584, an authorized official may waive recovery of overpayments resulting from erroneous payment to an employee of (1) pay or allowances or (2) travel, transportation, or relocation expenses and allowances. Use of the waiver authority is discretionary on the part of the authorized official. An employee's overpayment debt may be waived in whole or in part. A waiver decision must be based on a finding that collection would be against equity and good conscience and not in the best interests of the United States. An erroneous payment for which collection is waived is deemed to be a valid payment.
While § 5584 applies to certain legislative and judicial branch agencies, this fact sheet focuses on application of § 5584 to executive branch agencies.
The heads of Executive agencies have full authority to waive the overpayment debts owed to their respective agency regardless of the amount of the debt. The head of each Executive agency is responsible for establishing waiver policies and standards and determining levels of approval. Agency policies must be consistent with statutory requirements. All § 5584 waiver requests must be directed to the agency that made the erroneous payment resulting in an overpayment debt.
Under 5 U.S.C. 5584(a)(2), the head of an Executive agency is authorized to waive an amount not more than $1,500 (per individual claim), while higher amounts must be waived by an "authorized official," which under § 5584(g)(2) is the Director of the Office of Management and Budget (OMB). (This higher-level waiver authority was previously held by the Comptroller General of the former General Accounting Office, now the Government Accountability Office (GAO). OMB was given this authority by section 103(d) of Public Law 104-316, October 19, 1996.)
The Director of OMB has delegated OMB's waiver authority (including the § 5584(a)(2)(B) authority to prescribe standards) to the Executive agency that made the erroneous payment in question. (See OMB determination memorandum, Determination with Respect to Transfer of Functions Pursuant to Public Law 104-316, December 17, 1996.)
OPM is responsible for regulating various types of pay and allowances and also issues claims settlement decisions regarding compensation and leave matters both within and outside OPM-regulated programs (5 CFR part 178, subpart A). However, OPM does not have authority under § 5584 to waive overpayment debts resulting from erroneous payments of pay and allowances, except for such overpayment debts owed to OPM by its own employees. OPM claims decisions may be involved in determining whether erroneous payments have been made-i.e., whether an overpayment debt actually exists. OPM generally would become involved in such determinations in individual claims only after the affected employee has received a final agency-level decision (additional information). Any request to waive an overpayment debt involving pay and allowances must be directed to the agency that made the erroneous payment, and any agency waiver decision is not subject to review by OPM.
While GSA has authority to settle claims involving expenses incurred by Federal civilian employees for official travel, transportation, and relocation, the GSA Civilian Board of Contract appeals has acknowledged that GSA does not have authority under § 5584 to waive overpayment debts resulting from erroneous payments of travel, transportation and relocation expenses and allowances. Any waiver request involving such matters must be directed to the agency that made the erroneous payment, and any agency waiver decision is not subject to review by GSA.
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The waiver authority applies to employees of an Executive agency. The term "employee" has the meaning given it in 5 U.S.C. 2105. (See 5 U.S.C. 5581, 5584(a), and 5584(g).) While the erroneous payment must be directed to a current employee (i.e., compensation for service as an employee) in order for § 5584 to apply, a former employee may pursue waiver of collection of a covered erroneous payment. Also, an employee's surviving beneficiary or estate that is liable for repayment of an erroneous payment directed to the employee (based on service performed before death) may also seek a waiver.
Section 5584 establishes the following conditions for exercise of the waiver authority:
If an agency collected some or all of an overpayment debt prior to the granting of a waiver, the agency must refund any amount covered by the waiver if an application for refund is made within 2 years of the date of the waiver. (See 5 U.S.C. 5584(c).)
Overpayment debts not waived by the head of an agency may be recovered by offsetting a current Federal employee's salary payment to collect the overpayment debt (i.e., "salary offset"), subject to applicable statutory and regulatory requirements. See 5 U.S.C. 5514; OPM regulations at 5 CFR part 550, subpart K; and applicable agency regulations. See also the Federal Claims Collection Standards at 31 CFR parts 900-904, which are regulations promulgated jointly by the Department of the Treasury and the Department of Justice. Those standards provide rules governing Federal debt collections, including rules addressing (1) the collection of debt from other Federal payments and (2) the possibilities of compromising a claim or suspending or terminating collection activity.
"Pay and allowances" - Although not defined in law, this term has been broadly interpreted to encompass all types of employee compensation for services, including paid leave. (See former GAO regulations in effect before Public Law 104-316, 4 CFR parts 91 and 92.)
"Waiver" means the cancellation, forgiveness, or non-recovery of a debt owed by an employee to an agency.
Other laws may establish an independent authority to waive collection of certain other compensation-related debts owed to employing agencies by Federal employees. For example:
Some agencies have their own VSIP laws that do not require OPM approval to offer buyouts (e.g., the Department of Defense) or other buyouts under authority of their enabling legislation (FDIC). The provisions of the applicable VSIP law cover (1) whether repayment is required before re-employment with the Government of the United States and, if so, (2) the agency-specific buyout repayment waiver procedures.