20 C.F.R. § 255.12

When recovery is contrary to the purpose of the Railroad Retirement Act

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(a) The purpose of the Railroad Retirement Act is to pay retirement and survivor annuities and other benefits to eligible beneficiaries. It is contrary to the purpose of the Act for an overpayment to be recovered from income and resources which the individual requires to meet ordinary and necessary living expenses. If either income or resources, or a combination thereof, are sufficient to meet such expenses, recovery of an overpayment is not contrary to the purpose of the Act.

(b) For purposes of this section, income includes any funds which may reasonably be considered available for the individual's use, regardless of source, including inheritance prospects. Income to the individual's spouse or dependents is available to the individual if the spouse or dependent lived with the individual at the time waiver is considered. Types of income include but are not limited to:

(1) Government benefits, such as Black Lung, Social Security, Workers' Compensation, and Unemployment Compensation benefits;

(2) Wages and self-employment income;

(3) Regular incoming payments, such as rent or pensions; and

(4) Investment income.

(1) Liquid assets, such as cash on hand, the value of stocks, bonds, savings accounts, mutual funds and the like;

(2) Non-liquid assets (except an individual's primary residence) at their fair market value; and

(3) Accumulated, unpaid Federal benefits.

(4) For purposes of paragraphs (c)(1) and (2) of this section, assets concealed or improperly transferred on and after the date of notification of the overpayment, other than cash expended to meet ordinary and necessary living expenses, shall be included.

(d) Whether an individual has sufficient income and resources to meet ordinary and necessary living expenses depends not only on the amount of his or her income and resources, but also on whether the expenses are ordinary and necessary. While the level of expenses which is ordinary and necessary may vary among individuals, it must be held at a level reasonable for an individual who is living on a fixed income. The Board will consider the discretionary nature of an expense in determining whether it is reasonable. Ordinary and necessary living expenses include:

(1) Fixed living expenses such as food and clothing, rent, mortgage payments, utilities, maintenance, insurance (e.g., life, accident, and health insurance), taxes, installment payments, etc.;

(2) Medical, hospital, and other similar expenses;

(3) Expenses for the support of others for whom the individual is legally responsible; and

(4) Miscellaneous expenses (e.g., newspapers, haircuts).

(e) Where recovery of the full amount of an overpayment would be made from income and resources required to meet ordinary and necessary living expenses, but recovery of a lesser amount would leave income or resources sufficient to meet such expenses, recovery of the lesser amount is not contrary to the purpose of the Act.

(f) This section may be illustrated by the following examples:

Example (1).A remarried widow, W, is overpaid $6000 due to receipt of benefits on the wage records of both her late husbands. It has been determined that she is without fault. Her financial disclosure statement reveals monthly income greater than monthly expenses, and assets of $12,000, $10,000 of which is in cash. She claims to be saving these funds for future medical expenses, because she has a progressive disease. While it is not necessarily contrary to the purposes of the Act to recover the overpayment in these circumstances, the legitimate medical expenses associated with the disease must be considered.Example (2).A disability annuitant, D, is overpaid $33,000 because of simultaneous entitlement to workers' compensation payments. He is determined to be without fault. He claims he has assumed financial responsibility for his adult child and her children. A claimed expense for which the annuitant has no legal obligation to pay does not make recovery contrary to the purposes of the Act.

Notes of Decisions

Cited in 10 cases (1 in the last 5 years), 1983–2024 · leading case: Curtis R. Peterson v. United States R.R. Ret. Bd., 780 F.2d 1361 (8th Cir. 1985).

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Curtis R. Peterson v. United States R.R. Ret. Bd., 780 F.2d 1361 (8th Cir. 1985). · cites it 3× “An individual who receives an overpayment is “at fault” for this purpose if the overpayment was caused by the recipient’s incorrect statement or failure to disclose material facts, or if the recipient knew when he or she received the payment that the amount was incorrect but…”

Alberta E. Burns, on Behalf of Herself & All Others Similarly Situated v. United States R.R. Ret. Bd., 701 F.2d 193 (D.C. Cir. 1983). “As to those standards, Board regulations, 20 C.F.R. § 255.12 , list among factors meriting *203 consideration at the time of a proposed recoupment: 26 (d) The extent to which the individual is dependent upon the current payment of his annuity or pension for the necessities of…”

John C. King v. R.R. Ret. Bd., 981 F.2d 365 (8th Cir. 1992). “20 C.F.R. § 255.12 (a)-(c); see Peterson, 780 F.”

Denver S. Cooper v. United States R.R. Ret. Bd., 977 F.2d 647 (D.C. Cir. 1992). “Among these is “[w]hether, at the time or times of receipt of payments the individual knew or should have known the amount thereof to be incorrect and failed to inquire or advise the Board of the incorrectness of the amount of the payment or payments.” 25 C.F.”

Musquiz v. United States R.R. Ret. Bd., 106 F.4th 881 (9th Cir. 2024). “” 20 C.F.R. § 255.12 (a). However, the factual record of Musquiz’s financial situation is not current, and the RRB never considered this second element.”

Clingenpeel v. United States R.R. Ret. Bd., 117 F. App'x 987 (5th Cir. 2005). “” 20 C.F.R. § 255.12 (a). After reviewing Clingenpeel’s financial records, the hearings officer determined that his combined income exceeded expenses by more than $2,000.”

Scott v. United States R.R. Ret. Bd., 631 F.3d 359 (6th Cir. 2011). “20 C.F.R. § 255.12 (a). As the dissenting member of the Board pointed out, Scott declined to present evidence suggesting otherwise.”

Agnes R. Krey v. United States of Am., R.R. Ret. Bd., 738 F.2d 107 (3rd Cir. 1984). “Thus, 20 C.F.R. § 255.12 (1983) provides, in pertinent part, that a waiver is not a matter of right and that the following factors, while neither controlling nor fully measuring the discretion of the Board, indicate the character of reasons which will be considered: (d) The…”

Jeanette E. Oye v. RRRB (8th Cir. 2000). “1987) (recovery of social security benefits is “against equity and good conscience” if, inter alia, beneficiary relinquishes a valuable right); 20 C.F.R. § 255.12 (c) (1997) (beneficiary has no entitlement to waiver of recovery of overpaid RRB benefits; factors considered in…”

Scott A. Dahl v. RRRB (8th Cir. 2000). “See 20 C.F.R. §§ 255.12 (a) (2000) (recovery is against purpose of act if recovered from income and resources which individual requires to meet ordinary and necessary living expenses), 255.”

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