[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 505]

 

                      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.