[Code of Federal Regulations]
[Title 20, Volume 1]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR255.13]

[Page 486]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
                  CHAPTER II--RAILROAD RETIREMENT BOARD
 
PART 255_RECOVERY OF OVERPAYMENTS--Table of Contents
 
Sec. 255.13  When recovery is against equity or good conscience.

    (a) Recovery is considered to be against equity or good conscience 
if a person, in reliance on payments made to him or her or on notice 
that payment would be made, relinquished a significant and valuable 
right (Example 1 of this section) or changed his or her position to his 
or her substantial detriment (Example 2 of this section).
    (b) An individual's ability to repay an overpayment is not material 
to a finding that recovery would be against equity or good conscience 
but is relevant with respect to the credibility of a claim of 
detrimental reliance under paragraph (a) of this section.
    (c) This section may be illustrated by the following examples:

    Example (1). After being informed by the Board that he had been 
credited with sufficient years of railroad service to retire at age 60, 
an employee quit his railroad job and applied for benefits under the 
Railroad Retirement Act. He receives benefits for six months when it is 
discovered that he had insufficient railroad service to retire at age 60 
and was not entitled to the benefits he received. His annuity was 
terminated. Because the employee gave up his seniority rights when he 
quit his railroad job, he cannot get his job back. It is determined that 
the employee was not at fault in causing the overpayments. In this 
situation recovery of the overpayment would be against equity or good 
conscience because the overpaid individual gave up a valuable right.
    Example (2). A widow, having been awarded annuities for herself and 
her daughter, entered her daughter in a private school. The widow did 
not have substantial assets and her income, apart from the annuities she 
received in the amounts payable, would not have been sufficient for her 
to have undertaken the obligation to send her daughter to private 
school. In order to pay for the schooling she took out a loan and used 
the monthly annuities to pay interest and principal on the loan. After 
the widow and her daughter had received payments for almost a year, the 
deceased employee was found not to have been insured under the Railroad 
Retirement Act. Therefore, all payments to the widow and child were 
erroneous and the annuities were terminated. It is determined that the 
widow was not at fault in causing the overpayment. Having incurred a 
financial obligation (the school loan) toward which the benefits had 
been applied, the widow was in a worse position financially than if she 
and her daughter had never been entitled to benefits. In this situation, 
the recovery of the overpayment would be against equity or good 
conscience.