An individual who received a voluntary separation incentive (buyout) payment and who comes back to work for the government of the United States within five years must repay the entire payment, including any taxes withheld. This includes employment with any part of the federal government including the U.S. Postal Service.

If you retire with a buyout payment, before returning to work with any part of the federal government ask the agency where you want to work about the effect of reemployment on the payment you received.
Waivers of the obligation to repay the buyout may be granted in limited circumstances. If the proposed reemployment is with an agency other than the Government Accountability Office, the Postal Service, or the Postal Rate Commission, the Director of the Office of Personnel Management may, at the request of the head of the agency, waive the repayment if:

  • the individual involved possesses unique abilities and is the only qualified applicant available for the position; or
  • in case of an emergency involving a direct threat to life or property, the individual has skills directly related to resolving the emergency and will serve on a temporary basis only so long as that individual’s services are made necessary by the emergency.

If the proposed reemployment is with an entity in the legislative branch, the head of the entity or the appointing official may waive the repayment if the individual involved possesses unique abilities and is the only qualified applicant available for the position.

If the proposed reemployment is with the judicial branch, the Director of the Administrative Office of the United States Courts may waive the repayment if the individual involved possesses unique abilities and is the only qualified applicant available for the position.

The repayment waiver provisions do not extend to a repayment obligation resulting from employment under a personal services contract or other direct contract, which covers most consulting-type arrangements.