United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

S.C., Appellant 

and 

U.S. POSTAL SERVICE, UNIVERSITY 

STATION, Dallas, TX, Employer 

__________________________________________ 

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Docket No. 14-1730 

Issued: April 13, 2015 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

PATRICIA H. FITZGERALD, Deputy Chief Judge 

ALEC J. KOROMILAS, Alternate Judge 

JURISDICTION 

On August 7, 2014 appellant filed a timely appeal from a June 19, 2014 merit decision of 

the Office of Workers’ Compensation Programs (OWCP). Pursuant to the Federal Employees’ 

Compensation Act1

 (FECA) and 20 C.F.R. §§ 501.2(c) and 501.3, the Board has jurisdiction over 

the merits of this case. 

ISSUES 

The issues are: (1) whether appellant received an overpayment of compensation in the 

amount of $13,319.36 because OWCP paid her compensation in error; (2) whether she is at fault 

in creating the overpayment; and (3) whether the overpayment should be recovered by deducting 

$200.00 from appellant’s continuing compensation benefits. 

 1

 5 U.S.C. § 8101 et seq. 
2

FACTUAL HISTORY 

On October 24, 2011 appellant, then a 50-year-old city carrier, filed a traumatic injury 

claim alleging that on September 13, 2011 she twisted her left ankle when going down stairs. 

OWCP accepted the claim for left ankle sprain and paid her compensation for total disability 

beginning October 29, 2011. 

On September 24, 2013 the office of Claims and Compensation with the Department of 

Labor’s (DOL) Office of the Solicitor, noted that on November 23, 2012 OWCP electronically 

transferred $13,319.36 owed to another claimant into appellant’s bank account. OWCP tried to 

reclaim the money, but it was no longer in the account. The office of Claims and Compensation 

recommended contacting appellant and asking for the money and, if that was not successful, 

initiating an overpayment action. 

By letter dated September 25, 2013, OWCP notified appellant that it had electronically 

deposited $13,319.36 into her account on November 23, 2012. It informed her that the 

Department of the Treasury confirmed the electronic fund transfer into her account. OWCP 

advised appellant that the funds were not meant for her and requested repayment of the funds. 

On October 29, 2013 OWCP notified appellant of its preliminary determination that she 

received an overpayment of compensation in the amount of $13,319.36 because it electronically 

transferred funds into her bank account in error. It further informed her of its initial finding that 

she was at fault in the creation of the overpayment. OWCP requested that appellant complete the 

enclosed overpayment recovery questionnaire and submit supporting financial documents. 

Additionally, it advised her that, within 30 days of the date of the letter, she could request a 

telephone conference, a final decision based on the written evidence, or a prerecoupment 

hearing. 

On November 26, 2013 appellant requested a prerecoupment hearing. She argued that 

she was not at fault in creating the overpayment. Appellant maintained that her husband told her 

that the payment was for work he had performed. She related that she received a text message 

on her telephone indicating that she had received the deposit but the message did not identify the 

depositor. In an overpayment recovery questionnaire, appellant provided monthly income of 

$2,944.76 and monthly expenses of $2,818.31. 

In a statement received by OWCP on December 9, 2013 appellant again argued that she 

was not at fault in creating the overpayment. She related that she had no reason to disbelieve her 

husband when he stated that it was his money. 

On April 17, 2014 OWCP requested that appellant more fully complete the overpayment 

recovery questionnaire and submit supporting financial documentation of income and expenses. 

At the prerecoupment hearing, held on April 17, 2014, appellant related that she 

understood how the overpayment occurred, but maintained that at the time she received the 

deposit she did not believe that it was from OWCP. She explained that her husband informed 

her that he was waiting for a payment in that amount for work that he had performed. Appellant 

only learned of the incorrect payment when she received the September 2013 overpayment letter. 
3

She asked her husband about it and he again stated that it was “payment for work he had done.” 

Appellant indicated that she got a text message on her telephone indicating that she had received 

a direct deposit, and that if she had made further inquiries she could have found out who it was 

from, but did not do so as she believed her husband. She advised the hearing representative that 

she and her husband were no longer living together. 

On May 29, 2014 appellant submitted supporting financial information and a completed 

overpayment recovery questionnaire. She related that her income was $2,944.76 and her 

expenses were $2,975.00. Appellant indicated that her OWCP benefits might be reduced soon to 

the rate for a claimant without dependents. 

In response to OWCP’s request for information about her dependency status, appellant 

related that her husband was self-employed and installed electrical equipment. She submitted 

detailed information regarding her income and expenses.2

 

On June 4, 2014 OWCP adjusted appellant’s compensation to the applicable rate for a 

claimant without dependents. 

By decision dated June 19, 2014, an OWCP hearing representative found that appellant 

received an overpayment of compensation in the amount of $13,319.36 on November 23, 2012 

because OWCP electronically deposited money in her account in error. She found that appellant 

was at fault in the creation of the overpayment because she accepted a payment that she knew or 

should have known was incorrect. The hearing representative noted that appellant maintained 

that her husband told her that the money was for work that he had performed over the past few 

months but did not submit any statement from her husband in support of her contention. She 

considered appellant’s assets, income, and expenses and found that the overpayment should be 

recovered by deducting $200.00 from appellant’s continuing compensation. 

On appeal, appellant contends that she was not aware of the overpayment, that she did 

not know that the funds came from OWCP, and that she did not check her bank statement. She 

also raises arguments regarding the hearing representative’s analysis of her financial information. 

LEGAL PRECEDENT -- ISSUE 1 

Section 8102(a) provides that the United States shall pay compensation for the disability 

or death of an employee resulting from personal injury sustained while in the performance of 

duty.3

 When an overpayment has been made to an individual because of an error of fact or law, 

adjustment shall be made under regulations prescribed by the Secretary of Labor by decreasing 

later payments to which the individual is entitled.4

 2

 In a hardship affidavit form, appellant requested mortgage modification because of short-term hardship. She 

indicated that her husband’s social security benefits had “been temporarily suspended” and that she had home 

repairs including replacing a furnace and the main sewer lines. 

3

 5 U.S.C. § 8102(a). 

4 Id. at § 8129(a). 
4

ANALYSIS -- ISSUE 1 

OWCP paid appellant compensation for total disability beginning October 29, 2011. In a 

statement dated September 24, 2013, an attorney with DOL’s Office of the Solicitor indicated 

that on November 23, 2012 she received an electronic transfer in the amount of $13,319.36 that 

was meant for another claimant. As appellant was not entitled to this payment, she received an 

overpayment of compensation. OWCP explained how the overpayment occurred and provided 

this information to her with the preliminary notice of overpayment. Appellant did not dispute 

fact or amount of overpayment. The Board therefore finds that OWCP properly determined that 

she received an overpayment of $13,319.36 on November 23, 2012. 

LEGAL PRECEDENT -- ISSUE 2 

Under OWCP regulations, waiver of the recovery of an overpayment may be considered 

only if the individual to whom it was made was not at fault in accepting or creating the 

overpayment.5

 The fact that the overpayment was the result of error by OWCP or another 

government agency does not by itself relieve the individual who received the overpayment of 

liability for repayment if the individual also was at fault for receiving the overpayment.6 Each 

recipient of compensation benefits is responsible for taking all reasonable measures to ensure 

that payments he or she received from OWCP are proper. The recipient must show good faith 

and exercise a high degree of care in reporting events that may affect entitlement to or the 

amount of benefits. A recipient who has done any of the following will be found to be at fault 

with respect to creating an overpayment: (1) made an incorrect statement as to a material fact 

which he or she knew or should have known to be incorrect; (2) failed to provide information 

which he or she knew or should have known to be material; or (3) accepted a payment which he 

or she knew or should have known to be incorrect (this provision applies only to the overpaid 

individual).7

 

The Board has held that an employee who receives payments from OWCP in the form of 

a direct deposit may not be at fault the first time incorrect funds are deposited into his or her 

account, as the acceptance of the resulting overpayment lacks the requisite knowledge.8

 

ANALYSIS -- ISSUE 2 

OWCP determined that appellant was at fault in the creation of the overpayment because 

she accepted a payment that she knew or reasonably should have known was incorrect. In cases 

where a claimant receives compensation through direct deposit, however, OWCP must establish 

that at the time the claimant received the direct deposit in question she knew or should have 

known that a payment was incorrect.9

 The Board has held that an employee who receives 

 5

 20 C.F.R. § 10.433(a). 

6 Id. at § 10.435(a). 

7 Supra note 5; see Kenneth E. Rush, 51 ECAB 116 (1999). 

8 W.P., 59 ECAB 514 (2008). 

9 J.H., Docket No. 11-114 (issued July 18, 2011); R.C., Docket No. 10-2113 (issued July 6, 2011). 
5

payments from OWCP in the form of a direct deposit may not be at fault the first time an 

incorrect payment is deposited into his or her account since the acceptance of the overpayment, 

at the time of receipt of the direct deposit, lacks the requisite knowledge.10 According to 

OWCP’s regulations (effective August 29, 2011), good faith and exercise of a high degree of 

care in regard to receipt of benefits requires review of electronic bank statements. This 

regulation is in accordance with the Board’s previous decisions that a claimant gains control of 

the funds from the U.S. Treasury at the moment compensation is deposited into his or her bank 

account and, thereby, creates an overpayment.11 As explained in Craven, because fault is 

defined by what the claimant knew or should have known at the time of acceptance, one of the 

consequences of electronic fund transfers is that a claimant may not be at fault for accepting the 

first incorrect payment because the requisite knowledge is lacking at the time of deposit. 

Appellant received one electronic deposit on November 23, 2012 in the amount of 

$13,319.36. Although she accepted the overpayment at the time it was deposited into her 

account, OWCP has not shown that she knew or should have known at the time of the deposit on 

November 23, 2012 that the payment was incorrect. It has not presented evidence to establish 

that appellant accepted a payment at the time of deposit which she knew or should have known 

to be incorrect.12 Appellant had no reason to suspect at the time of the November 23, 2012 

deposit that OWCP had issued an incorrect payment since this was the first and only incorrect 

payment made. Thus, the Board finds that she was not at fault in creating the overpayment 

received November 23, 2012. A finding of no fault, however, does not mean that the claimant 

may keep the money, only that OWCP must consider eligibility for waiver for this period.13 The 

Board will remand the case for OWCP to obtain current financial information regarding income 

and expenses and consider waiver of recovery of the overpayment based on appellant’s updated 

financial information.14 

CONCLUSION 

The Board finds that appellant received an overpayment of compensation in the amount 

of $13,319.36 because OWCP paid her compensation in error on November 23, 2012. The 

Board further finds that OWCP improperly found that she was at fault in creating the 

overpayment and will remand the case for consideration of waiver of the recovery of the 

overpayment.15

 10 Tammy Craven, 57 ECAB 689 (2006); see also George A. Hirsch, 47 ECAB 520 (1996). 

11 See Tammy Craven, id. 

12 V.A., Docket No. 12-637 (issued August 27, 2012). 

13 D.B., Docket No. 14-397 (issued June 3, 2014); M.F., Docket No. 12-456 (issued November 13, 2012). 

14 Appellant submitted additional evidence on appeal. The Board has no jurisdiction to review new evidence on 

appeal; see 20 C.F.R. § 501.2(c). 

15 In view of the Board’s finding regarding fault, it is premature to consider the issue of recovery of the 

overpayment. 
6

ORDER 

IT IS HEREBY ORDERED THAT the June 19, 2014 decision of the Office of 

Workers’ Compensation Programs is affirmed in part and set aside in part and the case is 

remanded for further proceedings consistent with this decision of the Board. 

Issued: April 13, 2015 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board