Does the first year of FERS Supplement need to be repaid?

To quote the CSRS FERS Handbook, Chapter 51, here is what it says regarding when the reduction is assessed: A reduction in the retiree annuity supplement in a given year is based on excess earnings in the previous year. The reduction is assessed beginning with the year immediately after the first year during which a retiree became entitled to the annuity supplement (or reached the MRA if already receiving the annuity supplement before the MRA). If you would like to read more about this, page 15 of the following link will provide regulation and examples on this topic: https://www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c051.pdf

Since it is hypothetical, none, but the date of birth and when the supplement ends are tied together. Since OPM pays you the supplement and earnings while collecting the supplement is what determines if the supplement remains or is reduced or terminated, it is your responsibility to prove you are no longer working so the supplement can be reinstated. With OPM, there is no typical. I have heard, although the supplement is paid retroactive, if needed, should earning drop below the earnings test limit, it can take 6 months of more.

steel: Hypothetical questions are not something I usually respond to however, since these could be very realistic, I will provide you the answers with the understanding that not all the information needed was provided and OPM has final authority and I cannot be responsible if your particular situation varies from this information.
#1 – In this situation, your supplement should end July 1, 2019, because you have exceeded the earnings limit.
#2 – Yes, you should assume the supplement to be zero. You lose $1 for every $2 you earn in earned income over the 2019 $17,640 earnings limit. In order to determine if your supplement will be phased out, double your supplement and add it to the earnings limit. If you make more than that amount, you have totally zeroed out your supplement.
#3 – Since the supplement is for the previous year’s earnings, no, they do not claw back what has already been paid.
#4/5 – If you stop working before age 62, you will be eligible to receive your supplement again after notifying OPM. Unfortunately, it is not an easy process and just as OPM stopped your supplement payments after you earned those monies, it will delay in re-staring your payments again. You will need to send copies of your most recent tax returns along with all related W-2s or 1099s. This information along with a letter requesting reinstatement of your supplement should be sent to Office of Personnel Management, Retired Surveys and Students Branch, 1900 E Street, NW, Washington, DC 20415-3562. In your example, your supplement should be eligible to commence again in January 2021. Do not assume OPM will just reinstate your supplement without you possibly having to follow-up, even more than once. It will be paid retroactive to when eligible, but stay on top of it!