By Frank Ferreri, Jan. 17, 2024
For a variety of reasons, some benign and others more sinister, Federal employees may wind up on the receiving end of a workers’ compensation overpayment. What happens when the Employees’ Compensation Appeals Board decides that a Federal worker received a workers’ compensation overpayment?
Under the Federal Employees’ Compensation Act, and particularly Section 8129, when an overpayment has been made to a Federal employee receiving workers’ compensation benefits, an adjustment is made by decreasing later payments to which the employee is entitled. If the worker dies before the adjustment is completed, an adjustment will be made by decreasing death benefits.
Recovery isn’t always required. Section 8129 also provides that adjustment or recovery may not be made when both of the following are true:
- Incorrect payment has been made to a worker “who is without fault”; and
- Adjustment or recovery would defeat the purpose of FECA or would be against “equity and good conscience.”
The following cases show the remedial steps ECAB takes in cases of overpayment.
J.B. and Department of the Army, Combat Developments Experimentation Center, No. 22-1027 ECAB (Nov. 16, 2023)
Alleged overpayment amount: $169,429.15
How it happened: An operations research analyst received wage-loss compensation for permanent aggravation of major depression and prolonged depressive reaction. For roughly 22 years after being divorced, the worker claimed that he was married, that his spouse did not live with him, and that he made regular payments for her support, and thus, he received an augmented rate of compensation. The worker claimed that he was unaware that his marriage had been dissolved and that his signature on the document associated with the dissolution was a forgery.
ECAB decision: The worker received the overpayment because:
- Under FECA, a former spouse does not come within the meaning of the term “wife.”
- There was no evidence of any dependent children at the time of the divorce.
- The worker was not required to pay spousal support.
Thus, from Nov. 20, 1998, through April 25, 2020, the worker received $1,390,519.32 in FECA compensation benefits at the augmented rate but was entitled to only $1,221,090.17 at the basic rate.
Watkins and U.S. Postal Service, 28 ECAB 632 (1977)
Alleged overpayment amount: $16,150.08
How it happened: A letter carrier who sustained an injury to his right knee received compensation for temporary total disability benefits and concurrently received retirement benefits from the Civil Service Commission. The worker didn’t take steps to stop his receipt of dual benefits.
ECAB decision: The worker was given the chance to elect between workers’ compensation and civil service retirement benefits for the period from Mar. 1, 1975, through Jan. 5, 1977. Were he to elect retirement benefits, the overpayment amount would be the amount that was paid in workers’ compensation, which was $16,150.08. If he decided on workers’ compensation benefits, the overpayment would be the difference between the amount the worker was paid ($16,150.08) and the amount to which he would be determined to be entitled. In that scenario, the worker would also have received an overpayment under the retirement system that he would have to repay.
Smith and Department of Transportation, Federal Railroad Administration, 48 ECAB 132 (1996)
Alleged overpayment amount: $216,105.25
How it happened: A Federal railroad worker received workers’ compensation benefits for a right knee injury he later admitted did not occur as he described in his claim. Instead, the worker “just wanted to get a couple months off to work on [his] home.” Following that admission, the worker argued that when he made the statement about just wanting some time off to fix up the house he was “mentally incompetent.”
ECAB decision: The incompetence argument fell flat, and ECAB found that the worker knowingly made an incorrect statement that he had injured his knee at work, and accepted payments he knew were incorrect.
C.H. and Department of The Navy, Mare Island Naval Shipyard, No. 08-2426 (ECAB Aug. 14, 2009)
Alleged overpayment amount: $8,882.61
How it happened: An employee sustained a right knee injury from getting in and out of tanks and walking up and down steps on a deck. In addition to FECA benefits, the carrier also received Social Security benefits as part of his Federal Employee Retirement System retirement package.
ECAB decision: Per FECA Bulletin No. 97-9, the portion of the Social Security benefit the worker earned as a Federal employee was part of the FERS retirement package, and the receipt of FECA benefits and Federal retirement concurrently was a prohibited dual benefit. ECAB ruled that repayment of the overpayment could be accomplished by withholding $550 per month from his continuing compensation.
Borquez and Department of the Air Force, Davis-Monthan Air Force Base, No. 03-1989 (June 10, 2004)
Alleged overpayment amount: $85,950.76
How it happened: An Air Force employee pleaded guilty to mail fraud to obtain workers’ compensation benefits. On that basis, ECAB determined that the worker received an overpayment.
ECAB decision: The overpayment amount was initially calculated at $104,367.25 before deductions of $9,181.07 for the amount of compensation the worker was owed but did not receive for a six-month period and $5,600, which was the amount the worker paid in court-ordered restitution. ECAB upheld the $85,950.76 calculation of the worker’s overpayment of FECA benefits.
The lesson: Honesty is the best policy. If you received too much in workers’ compensation benefits, report the overpayment. Anyone who tries to secure additional benefits by wrongdoing will eventually face the wrath of OWCP, ECAB, and, possibly, criminal law. [email protected]
