Nathan R. James v. Office of Personnel Management ( 2015 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
NATHAN R. JAMES, DOCKET NUMBER
Appellant, PH-0845-15-0101-I-1
v.
OFFICE OF PERSONNEL DATE: August 13, 2015
MANAGEMENT,
Agency.
THIS ORDER IS NONPRECEDENTIAL *
Nathan R. James, Philadelphia, Pennsylvania, pro se.
Roxann Johnson, Washington, D.C., for the agency.
BEFORE
Susan Tsui Grundmann, Chairman
Mark A. Robbins, Member
REMAND ORDER
¶1 The appellant has filed a petition for review of the initial decision, which
affirmed as modified the reconsideration decision of the Office of Personnel
Management (OPM) finding that he was overpaid $26,064.00 in Federal
Employees’ Retirement System (FERS) disability benefits. For the reasons
*
A nonprecedential order is one that the Board has determined does not add
significantly to the body of MSPB case law. Parties may cite nonprecedential orders,
but such orders have no precedential value; the Board and administrative judges are not
required to follow or distinguish them in any future decisions. In contrast, a
precedential decision issued as an Opinion and Order has been identified by the Board
as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
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discussed below, we GRANT the petition for review and REMAND the case to
the regional office for further adjudication in accordance with this Order.
DISCUSSION OF ARGUMENTS ON REVIEW
¶2 The appellant filed an appeal of OPM’s reconsideration decision, which
found that he was overpaid $26,064.00 in annuity benefits under FERS and that
he was not entitled to a waiver of the overpayment. Initial Appeal File (IAF),
Tab 1. It is undisputed that the appellant was separated for disability retirement
on March 17, 1995, by his employing agency, the Department of the Navy. In a
letter dated September 15, 2005, OPM granted the appellant’s disability
retirement application and advised him that he was required to apply for social
security benefits. IAF, Tab 5, Subtab 5 at 38-40. OPM’s letter also explicitly
notified the appellant that his social security checks should be set aside until the
FERS annuity had been properly reduced, and that those checks would be needed
to pay OPM for the reduction which should have been made in the FERS annuity.
Id. In a letter dated April 16, 2013, OPM notified the appellant that it had
received information that he became entitled to social security benefits effective
August 1, 2009. IAF, Tab 5, Subtab 4 at 21-23. OPM advised the appellant that
his annuity had been adjusted because of his social security benefits, and that, as
a result, he had been overpaid $26,064.00; it notified him that his repayment
schedule would consist of 121 monthly payments of $214.00, with a final
payment of $170.00. Id.
¶3 The appellant requested reconsideration of OPM’s decision, and he
requested a waiver of the overpayment. IAF, Tab 5, Subtab 3 at 16-19. He
submitted a Financial Resources Questionnaire (FRQ) showing that his average
monthly expenses exceeded his average monthly income by $31.10. Id. OPM’s
reconsideration decision affirmed the existence of the overpayment and found that
the appellant was not entitled to a waiver of the overpayment. IAF, Tab 5,
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Subtab 2 at 10-14. However, OPM adjusted the repayment schedule to
208 monthly payments of $125 and one final payment of $64.00. Id. at 13.
¶4 On appeal, the appellant asked the Board to waive recovery of the
overpayment because of financial hardship. IAF, Tab 1. Because the appellant
did not request a hearing, the administrative judge decided the case on the written
record. Initial Decision (ID) at 1; IAF, Tab 1. The administrative judge found
that OPM established the existence and amount of the overpayment, $26,064.00,
and that the appellant was not entitled to a waiver of collection of the
overpayment under the set-aside rule. ID at 5-6. While the appeal was pending,
OPM offered to further reduce the appellant’s monthly installment payments from
$125.00 to $100.00. IAF, Tab 5 at 4-5. The administrative judge found that the
repayment schedule was properly adjusted to a monthly payment of $100.00 due
to financial hardship and he affirmed OPM’s reconsideration decision as
modified. ID at 6-7.
¶5 On review, the appellant has not challenged the administrative judge’s
findings regarding the overpayment amount or that he was not entitled to a waiver
because of the set-aside rule. ID at 3-6. Thus, we affirm the administrative
judge’s findings on these issues. Nevertheless, an annuitant who is ineligible for
a waiver may be entitled to a recovery schedule adjustment if he shows that it
would cause him financial hardship to make payments at the scheduled rate.
Malone v. Office of Personnel Management, 113 M.S.P.R. 104, ¶ 4 (2010);
Dorrello v. Office of Personnel Management, 91 M.S.P.R. 535, ¶ 7 (2002);
5 C.F.R. § 845.301. Pursuant to OPM’s regulations, financial hardship may exist
where the annuitant needs substantially all of his income and liquid assets to meet
current ordinary and necessary living expenses and liabilities. Malone,
113 M.S.P.R. 104, ¶ 4; 5 C.F.R. § 845.304. Ordinary and necessary expenses
include those for rent, mortgage payments, utilities, maintenance, food, clothing,
insurance, taxes, installment payments, and medical expenses. 5 C.F.R.
§ 831.1405. The Board has the authority, based on the appellant’s financial
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situation, to order OPM to adjust the monthly repayment schedule. Malone,
113 M.S.P.R. 104, ¶ 4; Gott v. Office of Personnel Management, 97 M.S.P.R.
538, ¶ 10 (2004).
¶6 Here, although the appellant does not specifically request an adjustment in
the repayment schedule on review, he claims that he is currently behind on all of
his bills and he asserts that he submitted an FRQ which shows that he is unable to
pay his bills and living expenses. Petition for Review File, Tab 1. We find that,
while he has not met his burden of proving that he is entitled to a waiver of
recovery of the overpayment, the FRQ indicates that further adjustment of the
repayment schedule may be warranted. IAF, Tab 5, Subtab 3 at 18-19.
¶7 The administrative judge discussed Board law regarding adjustment of the
repayment schedule due to financial hardship and he stated that he reviewed the
appellant’s FRQ in affirming OPM’s subsequent adjustments of his monthly
installment payments from the original $214 to $100. The administrative judge
explicitly found that the adjusted monthly payment of $100.00 “does not
substantially exceed the appellant’s demonstrated monthly income/expense
margin and would not therefore cause the appellant financial hardship.” ID at 7.
However, there is no indication in the initial decision that the administrative
judge fully reviewed the FRQ regarding the appellant’s income/expense margin.
ID at 6-7; see Gott, 97 M.S.P.R. 538, ¶ 11 (finding that the administrative judge
is required to consider whether the type of each claimed expense is ordinary and
necessary). Further, the FRQ reflects that the appellant’s monthly income is
$1,457.90, expenses are $1,489.00, and expenses exceed income by $31.10. IAF,
Tab 5, Subtab 3 at 18. However, there is an error in the computation of the
appellant’s expenses; his monthly expenses actually exceed his income by $41.10.
Id. Additionally, when considering OPM’s offer to adjust the repayment schedule
and the appellant’s assertion that the scheduled rate would cause him financial
hardship, the record shows that the administrative judge did not take into account
that the appellant is entitled to $50.00 per month in emergency expenses. See
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Maseuli v. Office of Personnel Management, 111 M.S.P.R. 439, ¶ 12 (2009) (the
Board has long recognized that OPM allows $50.00 in emergency expenses per
month in calculating repayment scheduled for overpayment of annuity benefits).
Adjusting the figures in the appellant’s FRQ accordingly, we find that his
reported monthly expenses would exceed his monthly income of $1,457.90 by
$91.90. Thus, it appears that he may be entitled to an adjustment of the
repayment schedule.
¶8 Nonetheless, in light of the administrative judge’s errors in considering the
FRQ, the time lapse since the FRQ was completed, the appellant’s assertions on
review that his financial situation has since deteriorated, and because it appears
that at least one of his installment debts may now be paid in full, it is appropriate
to provide him with an opportunity to submit updated financial information. See
Spinella v. Office of Personnel Management, 109 M.S.P.R. 185, ¶ 12 (2008).
Accordingly, remand is appropriate here to allow the appellant to submit an
updated FRQ and supporting documentation to reflect any change in
circumstances since his last FRQ was prepared. On remand, the administrative
judge must allow the parties an opportunity to supplement the record on the issue
of the appellant’s finances. Afterwards, the administrative judge must
specifically consider the appellant’s income and his current ordinary and
necessary living expenses and liabilities and adjust the repayment schedule, if
appropriate, based on his current financial situation. Otherwise, the
administrative judge should let his previous decision stand, depending on the
evidence supplied.
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ORDER
For the reasons discussed above, we REMAND this case to the regional
office for further adjudication in accordance with this Remand Order.
FOR THE BOARD: ______________________________
William D. Spencer
Clerk of the Board
Washington, D.C.