OPM says you were overpaid
Three separate remedies, one deadline, and most people ask for the wrong one.
You can ask for more than one. The third is available even after a waiver is denied, and a timely appeal from a waiver denial or reconsideration decision stops collection while it is pending.
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1. Why this happens
Overpayments are routine, and most have nothing to do with anything you did. The common causes:
- Interim payments ran high. OPM pays an estimated 60–80% while finalizing your case; if the final computation comes out below the estimate, the difference is an overpayment. See surviving the OPM wait.
- A survivor election was processed late, so the reduction was not applied for months.
- A court-ordered apportionment arrived after payments began and applies retroactively. See court-ordered apportionment.
- A service credit or deposit issue changed the computation after the fact.
- The FERS supplement was reduced by the earnings test after you reported earnings. See the three earnings tests.
- Reemployment as an annuitant triggered an offset that was applied late.
- A death was reported late, so payments continued after entitlement ended.
Amounts are frequently large, because they accumulate silently over months or years before anyone notices. Five-figure notices are common.
2. The notice, and the clock
OPM sends Form RI 34-3. It states the amount, the period the overpayment covers, the reason, and a proposed schedule for recovering it by offset from your monthly annuity. It also carries a deadline, printed near the top, by which you must respond to preserve your options.
Do not treat it as a bill to argue about later. If the deadline passes without a response, collection begins on OPM's schedule.
Reconsideration argues that the debt does not exist or the amount is wrong. Waiver concedes the debt and asks to be excused from repaying it. They are different boxes on the form, they are decided under different standards, and asking for the wrong one wastes the deadline. If you believe both — the figure is wrong and you should be excused from whatever is left — say so explicitly and check both.
3. Reconsideration: disputing the debt
Here OPM carries the burden of proving the existence and the amount of the overpayment. That is the opposite of a waiver request, and it is why reconsideration is underused: if the arithmetic is wrong, you do not have to prove anything about hardship or fault.
Things worth checking before you concede the number:
- The period. Does it start when the error actually began, or earlier?
- The rate. Is the "correct" annuity OPM now claims consistent with your service, high-3, and elections?
- Amounts already recovered. Interim-pay true-ups sometimes recover part of a difference that is then counted again.
- Deductions. Were FEHB, FEGLI and tax withholding taken from the overpaid amounts? You received less than the gross figure, and that matters to the computation.
- The reason itself. If a survivor election or apportionment is cited, is it the one actually on file?
Ask OPM in writing for the computation behind the figure, not just the total.
4. Waiver: the two-part test
Under 5 U.S.C. 8470(b) and 5 CFR part 845 subpart C for FERS annuitants — part 831 subparts M and N for CSRS — OPM may waive recovery when both of these are true:
AND
(b) recovery would be against equity and good conscience
Without fault means you did not make an incorrect statement, did not fail to disclose material information, and did not accept a payment you knew or should have known was wrong.
Against equity and good conscience is met in any one of three ways:
| Ground | What it means | What proves it |
|---|---|---|
| Financial hardship | Repayment at the scheduled rate would leave you unable to meet ordinary living expenses | A complete income and expense statement, with documentation |
| Detrimental reliance | You relinquished a valuable right or changed position for the worse because of the payments or a notice that they would be made | Evidence of the specific decision and its timing |
| Unconscionable | Recovery would be unconscionable in the circumstances | Fact-specific; the narrowest ground |
The second row is the one people underuse and the one that wins cases. It is not about being short of money — it is about having made an irreversible decision because of the payments. Retiring on the strength of an estimate, declining other employment, or giving up a benefit elsewhere can all qualify, if you can show the decision and that it followed the payments rather than preceding them.
Note the asymmetry: the burden is on you, by substantial evidence. Assertions do not carry it. Attach the documents.
5. The set-aside rule
This is what defeats most waiver requests, and almost nobody knows about it before they read a denial letter.
Under Merit Systems Protection Board case law, an annuitant who knows or suspects they are being overpaid is expected to set the money aside pending recovery. Where the rule applies, recovery is not against equity and good conscience and cannot be waived — and this operates independently of fault. You can be found entirely without fault and still lose on the second element for this reason.
Two features make it harsh. Financial hardship does not create an exception once the rule applies. And the recognized exceptional circumstances are about OPM's conduct rather than yours — egregious error or delay, such as failing to issue a written decision on a waiver request for years.
If your annuity jumps unexpectedly, or you receive a payment you cannot account for, do not spend it. Ask OPM in writing what it is, keep the reply, and hold the money until you have an answer. That single habit preserves a waiver argument that the set-aside rule would otherwise extinguish.
6. Adjusting the repayment schedule
The quietest of the three remedies, and the one most likely to actually help.
Even when a waiver is denied, you remain entitled to an adjustment of the recovery schedule if you show that repayment at the scheduled rate would cause financial hardship. It does not reduce what you owe; it stretches the recovery over a longer period at a smaller monthly offset.
For someone facing a large offset against a modest annuity, this is often the difference between a manageable situation and a crisis — and it is available on a showing far less demanding than a waiver. Ask for it in the alternative in the same response: waiver first, and failing that, an adjusted schedule, with the income and expense statement attached either way.
7. Appealing to the MSPB
After OPM issues a reconsideration decision, or denies a waiver, the decision letter must tell you about your right to appeal to the Merit Systems Protection Board.
Two things matter here. First, a timely appeal stops collection of the debt while it is pending — which is itself a reason to file rather than accept a decision you think is wrong. Second, the deadline is short and runs from the decision, so take the filing date from the letter rather than assuming.
Note that disability retirement and overpayment appeals remain with the MSPB. The September 2026 transfer of RIF appeals to OPM did not cover them.
At the Board, OPM must prove the existence and amount of the overpayment; you must prove entitlement to waiver. Those burdens are worth keeping straight when deciding which argument to lead with.
8. What to do in the first week
- Find the response deadline on the notice and calendar it. Everything else depends on meeting it.
- Request the computation in writing — how OPM arrived at the figure, for which period, and on what basis.
- Decide which remedy you are actually asking for, and say so plainly. Check more than one box if more than one applies.
- If you are claiming hardship, complete the income and expense statement fully. Blanks are read against you.
- If you relied on the payments, document the decision you made and when. This is the strongest waiver ground and the least used.
- Stop spending any amount you suspect is erroneous, and put it aside.
- Keep copies of everything, including the envelope. Dates matter later.
- Ask for an adjusted schedule in the alternative, so a waiver denial does not leave you with the original offset.
If the amount is large or the facts are complicated, this is a reasonable point to consult an attorney who handles federal retirement matters. The deadlines are short and the record you build at the reconsideration stage is largely the record the Board will review.
9. Frequently asked questions
What happens if OPM overpays my annuity?
OPM sends a written notice, Form RI 34-3, stating the amount, the period the overpayment covers, the reason, and a proposed collection schedule. It then recovers the money by offsetting your monthly annuity unless you respond by the deadline on the notice. You have three possible responses, and they are different things: reconsideration if you dispute the debt, waiver if you concede it but ask to be excused, and an adjustment of the repayment schedule if you cannot afford the proposed rate.
What does it take to get an overpayment waived?
Two things, both required. You must be without fault in causing the overpayment, and recovery must be against equity and good conscience. Recovery is against equity and good conscience when it would cause financial hardship, when you relinquished a valuable right or changed your position for the worse in reliance on the payments, or when recovery would be unconscionable. The burden is on you, and the standard is substantial evidence.
Does it help that the mistake was OPM’s fault?
It is necessary but not sufficient. Being without fault only satisfies the first half of the test. Many waiver requests are denied even after OPM concedes the annuitant did nothing wrong, because the second half — that recovery would be against equity and good conscience — is not established. Those are separate findings, and a denial letter will often grant the first while refusing the second.
What is the set-aside rule?
A rule from Merit Systems Protection Board case law that defeats most waiver requests. If you knew or suspected you were being overpaid, you are expected to set the money aside pending recovery. When that applies, recovery is not against equity and good conscience and cannot be waived, regardless of whether you were at fault. Financial hardship does not create an exception. The recognized exceptions involve egregious error or delay by OPM, such as failing to decide a waiver request for years.
Can I stop the collection while I dispute it?
Yes, in a specific circumstance. A timely appeal to the Merit Systems Protection Board from a denial of waiver or from a reconsideration decision stops collection of the debt while the appeal is pending. The deadline is short and it runs from the decision, so read the decision letter for the filing date rather than assuming. Separately, you may request an adjusted repayment schedule at any point on financial hardship grounds, even if a waiver has been denied.
- 5 CFR part 845, FERS debt collection — waiver standards and recovery
- 5 CFR part 831 subparts M and N, CSRS collection and waiver of overpayments
- 5 U.S.C. 8470(b), waiver of recovery of FERS overpayments
- OPM forms, including RI 34-3, notice of annuity overpayment
- MSPB decisions on overpayment waivers, including the set-aside rule
- MSPB, how to file an appeal
- OPM Retirement Services
General information about the overpayment process, not legal advice. Deadlines are short and outcomes are fact-specific; consider consulting an attorney experienced in federal retirement matters if the amount is significant.