(a) Waivers of indebtedness may be granted only as provided for certain types of debt by specific statutes and according to the standards set out under those statutes.
(b) Authorities—(1) Debts arising out of erroneous payments of pay and allowances. 5 U.S.C. 5584 provides authority for waiving in whole or in part debts arising out of erroneous payments of pay and allowances, and travel, transportation and relocation expenses and allowances, if collection would be against equity and good conscience and not in the best interests of the United States.
(i) Waiver may not be granted if there exists in connection with the claim an indication of fraud, misrepresentation, fault, or lack of good faith on the part of the employee or any other person having an interest in obtaining a waiver.
(ii) Fault is considered to exist if in light of the circumstances the employee knew or should have known through the exercise of due diligence that an error existed but failed to take corrective action. What an employee should have known is evaluated under a reasonable person standard. Employees are, however, expected to have a general understanding of the Federal pay system applicable to them.
(iii) An employee with notice that a payment may be erroneous is expected to make provisions for eventual repayment. Financial hardship is not a basis for granting a waiver for an employee who was on notice of an erroneous payment.
(iv) If the deciding official finds no indication of fraud, misrepresentation, fault, or lack of good faith on the part of the employee or any other person having an interest in obtaining a waiver of the claim, the employee is not automatically entitled to a waiver. Before a waiver can be granted, the deciding official must also determine that collection of the claim against an employee would be against equity and good conscience and not in the best interests of the United States. Factors to consider when determining if collection of a claim against an employee would be against equity and good conscience and not in the best interests of the United States include, but are not limited to:
(A) Whether collection of the claim would cause serious financial hardship to the employee from whom collection is sought.
(B) Whether, because of the erroneous payment, the employee either has relinquished a valuable right or changed positions for the worse, regardless of the employee's financial circumstances.
(C) The time elapsed between the erroneous payment and discovery of the error and notification of the employee;
(D) Whether failure to make restitution would result in unfair gain to the employee;
(E) Whether recovery of the claim would be unconscionable under the circumstances.
(2) Debts arising out of advances in pay. 5 U.S.C. 5524a provides authority for waiving in whole or in part a debt arising out of an advance in pay if it is shown that recovery would be against equity and good conscience or against the public interest.
(i) Factors to be considered when determining if recovery of an advance payment would be against equity and good conscience or against the public interest include, but are not limited to:
(A) Death of the employee;
(B) Retirement of the employee for disability;
(C) Inability of the employee to return to duty because of disability (supported by an acceptable medical certificate); and
(D) Whether failure to repay would result in unfair gain to the employee.
(ii) [Reserved]
(3) Debts arising out of advances in situations of authorized or ordered departures. 5 U.S.C. 5522 provides authority for waiving in whole or in part a debt arising out of an advance payment of pay, allowances, and differentials provided under this section if it is shown that recovery would be against equity and good conscience or against the public interest.
(i) Factors to be considered when determining if recovery of an advance payment would be against equity and good conscience or against the public interest include, but are not limited to:
(A) Death of the employee;
(B) Retirement of the employee for disability;
(C) Inability of the employee to return to duty because of disability (supported by an acceptable medical certificate); and
(D) Whether failure to repay would result in unfair gain to the employee.
(ii) [Reserved]
(4) Debts arising out of advances of allowances and differentials for employees stationed abroad. 5 U.S.C. 5922 provides authority for waiving in whole or in part a debt arising out of an advance of allowances and differentials provided under this subchapter if it is shown that recovery would be against equity and good conscience or against the public interest.
(i) Factors to be considered when determining if recovery of an advance payment would be against equity and good conscience or against the public interest include, but are not limited to:
(A) Death of the employee;
(B) Retirement of the employee for disability;
(C) Inability of the employee to return to duty because of disability (supported by an acceptable medical certificate); and
(D) Whether failure to repay would result in unfair gain to the employee.
(ii) [Reserved]
(5) Debts arising out of employee training expenses. 5 U.S.C. 4108 provides authority for waiving in whole or in part a debt arising out of employee training expenses if it is shown that recovery would be against equity and good conscience or against the public interest.
(i) Factors to be considered when determining if recovery of a debt arising out of employee training expenses would be against equity and good conscience or against the public interest include, but are not limited to:
(A) Death of the employee;
(B) Retirement of the employee for disability;
(C) Inability of the employee to return to duty because of disability (supported by an acceptable medical certificate); and
(D) Whether failure to repay would result in unfair gain to the employee.
(ii) [Reserved]
(6) Under-withholding of life insurance premiums. 5 U.S.C. 8707(d) provides authority for waiving the collection of unpaid deductions resulting from under-withholding of Federal Employees' Group Life Insurance Program premiums if the individual is without fault and recovery would be against equity and good conscience.
(i) Fault is considered to exist if in light of the circumstances the employee knew or should have known through the exercise of due diligence that an error existed but failed to take corrective action.
(ii) Factors to be considered when determining whether recovery of unpaid deduction resulting from under-withholding would be against equity and good conscience include, but are not limited to:
(A) Whether collection of the claim would cause serious financial hardship to the individual from whom collection is sought.
(B) The time elapsed between the failure to properly withhold and discovery of the failure and notification of the individual;
(C) Whether failure to make restitution would result in unfair gain to the individual;
(D) Whether recovery of the claim would be unconscionable under the circumstances.
(7) Overpayments of Foreign Service annuities. For waiver of debts arising from overpayments from the Foreign Service Retirement and Disability Fund under the Foreign Service Retirement and Disability System or the Foreign Service Pension System see 22 CFR part 17.
(8) As otherwise provided by law.
(c) Waiver of indebtedness is an equitable remedy and as such must be based on an assessment of the facts involved in the individual case under consideration.
(d) The burden is on the employee to demonstrate that the applicable waiver standard has been met.
(e) Requests. A debtor requesting a waiver shall do so in writing to the contact office by the payment due date stated within the initial notice sent under § 34.8(b) or other applicable provision. The debtor's written response shall state the basis for the dispute and include any relevant documentation in support.
(f) While a waiver request is pending, STATE may suspend collection, including the accrual of interest and penalties, on the debt if STATE determines that suspension is in the Department's best interest or would serve equity and good conscience.