A federal appeals court has upheld a ruling requiring a former federal employee to repay $40,749 after she allegedly failed to properly notify the Office of Personnel Management (OPM) that she had been approved for Social Security disability benefits.
According to court records, the case, Navarro v. Office of Personnel Management (CAFC No. 2025-1612), centers on a dispute involving disability retirement payments under the Federal Employees Retirement System (FERS). The nonprecedential decision was issued on December 8, 2025.
Court documents state that the retiree, identified as Ms. Navarro, reportedly applied for FERS retirement benefits in June 2019. OPM later approved the application and converted it to a disability retirement. As part of that approval, OPM allegedly instructed Navarro to apply for Social Security disability insurance benefits and to immediately notify the agency once the Social Security Administration (SSA) issued a decision, including the benefit amount and effective date.
More than two years later, in April 2022, SSA reportedly notified Navarro that her disability benefits had been approved retroactively. According to the record, the SSA determination made the benefits effective as of November 1, 2019, several months after her initial FERS application.
Navarro allegedly did not immediately forward the SSA approval notice to OPM. During subsequent proceedings, she reportedly testified that she contacted OPM about a week after receiving the SSA notice and spoke with an individual she identified as “Anna S.” She claimed that she informed the OPM representative of the SSA decision and asked what steps she needed to take to avoid being overpaid.
According to OPM, the agency did not receive formal notice of the SSA approval at that time. Court filings indicate that OPM later learned independently, approximately four months afterward, that Navarro had been approved for Social Security disability benefits. At that point, OPM reportedly notified Navarro that her FERS disability annuity would be reduced and that she had been overpaid $40,749, which the agency said would be recovered through monthly deductions from her annuity.
Navarro challenged the repayment decision, reportedly arguing that OPM had mismanaged the situation and pointing to her alleged phone call with the OPM representative. OPM reaffirmed its determination, and Navarro appealed the matter to the Merit Systems Protection Board (MSPB).
According to the MSPB’s findings, an administrative judge concluded that OPM had established both the existence and the amount of the overpayment. The judge reportedly found that Navarro knew or should have known she was receiving excess payments and that she was required to set aside the overpaid funds. On that basis, the judge determined she was not eligible for a waiver of repayment. The full MSPB later affirmed that decision, according to the record.
Navarro then appealed to the U.S. Court of Appeals for the Federal Circuit, seeking to overturn the MSPB’s ruling. The court reportedly rejected her arguments and upheld the repayment requirement.
In its decision, the court stated that federal law requires a FERS disability annuity to be reduced by the amount of Social Security disability benefits a retiree receives. The court further explained that OPM is required only to prove that an overpayment occurred and to establish the amount.
The judges also addressed the standard for waiving repayment, noting that a waiver is permitted only if the retiree is found to be without fault and if recovery would be against equity and good conscience. According to the court, both OPM and the MSPB concluded that Navarro did not meet that standard.
The decision reportedly cited Navarro’s failure to promptly submit the SSA notice and her obligation to set aside the excess funds. The court also pointed to her testimony regarding the phone call with OPM as evidence that she, at a minimum, suspected she may have been receiving overpayments.
Ultimately, the court affirmed that Navarro remains obligated to repay the $40,749, upholding OPM’s recovery action in full.