United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

R.T., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Delhi, LA, Employer 

__________________________________________ 

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Docket No. 14-831 

Issued: September 19, 2014 

Appearances: Case Submitted on the Record

Alan J. Shapiro, Esq., for the appellant 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

PATRICIA HOWARD FITZGERALD, Judge 

MICHAEL E. GROOM, Alternate Judge 

JAMES A. HAYNES, Alternate Judge 

JURISDICTION 

On March 4, 2014 appellant, through her attorney, filed a timely appeal from the 

February 7, 2014 merit decision of the Office of Workers’ Compensation Programs (OWCP), 

which found that she forfeited compensation and was at fault in the resulting overpayment. 

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 forfeited her right to compensation from July 28, 

2012 to February 13, 2013; (2) whether appellant was at fault in creating the resulting 

overpayment in the amount of $10,848.63; and (3) whether OWCP properly directed recovery of 

the overpayment. 

 1

 5 U.S.C. § 8101 et seq.
2

FACTUAL HISTORY 

On May 12, 2012 appellant, a 35-year-old rural carrier associate, sustained a traumatic 

injury in the performance of duty when her vehicle was struck from behind. OWCP accepted her 

claim for neck sprain and cervical spondylosis with myelopathy. 

At the time of acceptance, OWCP notified appellant that any claim for lost wages must 

be submitted on Form CA-7 and that she must report any employment or employment activities 

on that form. 

Appellant submitted Forms CA-7 to claim lost wages. The forms advised her that failure 

to report income may result in forfeiture of compensation benefits. Appellant attested that she 

had no earnings outside her federal job. 

Appellant received compensation for wage loss beginning July 28, 2012. She would later 

receive compensation on the periodic rolls. 

On February 13, 2013 appellant completed a Form EN1032, which notified her that the 

information requested was required in connection with her benefits: “This information will be 

used to decide whether you are entitled to continue receiving these benefits or whether your 

benefits should be adjusted.” The form warned her that a false answer may be grounds for 

forfeiting her compensation benefits. The form further warned that severe penalties may be 

applied for failure to report all work activities thoroughly and completely over the past 15 

months. Appellant responded that, apart from her federal employment, she was not selfemployed or involved in any business enterprise. She certified: “I know that fraudulently 

concealing or failing to report income or other information in claiming payment or benefits under 

FECA may result in the forfeiture of compensation for the period covered by this form....” 

When appellant completed another Form EN1032 on April 1, 2013, she attached a 

supplemental statement. As the instructions advised her to include any information if she had a 

question whether it was material or relevant, she informed OWCP that she obtained a one-time 

license in 2012 to hunt alligators. In September 2012, appellant caught and killed three 

alligators. She sold the first for approximately $300.00 and sold the other two for approximately 

$500.00. Appellant explained: “I hunted alligators strictly for fun and for entertainment for me, 

my family and friends. I did not hunt the alligators in order to start a business enterprise of any 

sort. Although I never considered this activity to be entrepreneurial in nature, I felt like I should 

include it in this form since I did sell the alligators.” 

In a decision dated June 21, 2013, OWCP found that appellant forfeited her right to 

compensation from July 28, 2012 to February 13, 2013. It was clear from the evidence that she 

had earnings from hunting activity but knowingly failed to report those earnings on her 

February 13, 2013 EN1032 form. OWCP explained that appellant therefore forfeited her right to 

compensation for the period covered by that form. 

On June 21, 2013 OWCP also issued a preliminary determination that appellant was at 

fault in creating an overpayment of $10,848.63 because she failed to provide information which 

she knew or should have known was material. It showed how it calculated the amount of the 
3

overpayment: OWCP added all the payments issued from July 28, 2012 to February 9, 2013, 

then added four days of compensation at the prorated rate. 

In a decision dated February 7, 2014, an OWCP hearing representative affirmed the 

finding of forfeiture, as appellant knowingly omitted her employment activity or earnings. The 

hearing representative also finalized OWCP’s finding that appellant was at fault in creating an 

overpayment of $10,848.63, as she failed to furnish information which she knew or should have 

known to be material. 

Because appellant did not submit an overpayment recovery questionnaire and the 

financial documentation required to support her income, expenses and assets, the hearing 

representative found that OWCP did not have the necessary financial information to develop an 

equitable repayment plan. The hearing representative therefore directed OWCP to collect the 

overpayment in its entirety. Appellant was notified that OWCP could ask her employing 

establishment to recover the overpayment from current salary or ask the Office of Personnel 

Management (OPM) to recover the overpayment from money otherwise payable from the Civil 

Service Retirement Fund. “If you are employed by the Federal [G]overnment or are eligible for 

or receiving Civil Service annuity and if we do not receive a check or otherwise hear from you in 

regard to repaying this debt within 30 days, we will pursue course of action.” 

LEGAL PRECEDENT -- ISSUE 1 

An employee who fails to make an affidavit or report when required or who knowingly 

omits or understates any part of his or her earnings, forfeits his or her right to compensation with 

respect to any period for which the affidavit or report was required. Compensation forfeited 

under this subsection, if already paid, shall be recovered by a deduction from the compensation 

payable to the employee or otherwise recovered under section 8129, unless recovery is waived 

under that section.2

The employee must report even those earnings which do not seem likely to affect his or 

her level of benefits. Many kinds of income, though not all, will result in a reduction of 

compensation benefits. While earning income will not necessarily result in a reduction of 

compensation, failure to report income may result in forfeiture of all benefits paid during the 

reporting period.3

An employee who is receiving compensation for partial or total disability is periodically 

required to report volunteer activity or any other kind of activity which shows that the employee 

is no longer totally disabled for work. The fact that the employee did not receive any salary for 

this work is not a basis for failing to report this activity. Instead, the employee must report the 

cost, if any, to have someone else do the work or activity.4

 2

 5 U.S.C. § 8106(b). 

3

 20 C.F.R. § 10.525(b). 

4 Id. at § 10.526. 
4

ANALYSIS -- ISSUE 1 

Appellant advised on her CA-7 forms that she had no earnings outside of her federal job. 

On the EN1032 form she completed on February 13, 2013; she stated that she was not selfemployed during the previous 15 months. The record establishes, however, that appellant did 

earn income during that period from selling alligators. She caught and killed three alligators and 

sold them for approximately $800.00. 

This was the kind of information appellant should have disclosed. She was receiving 

compensation for wage loss on the grounds that the May 12, 2012 employment injury had caused 

and was continuing to cause, a complete loss of wage-earning capacity.5 To monitor appellant’s 

entitlement to such benefits, OWCP needed to know whether she was able to perform any kind 

of activity that might show a partial capacity to earn wages. It also needed to know whether she 

had earned any income. It did not matter whether the income seemed likely to affect her level of 

benefits. Appellant was obligated to disclose the information so that OWCP could make that 

determination. 

When she completed her EN1032 form on February 13, 2013, appellant failed to disclose 

the income she had earned from selling alligators. She certified her understanding that failing to 

report income might result in the forfeiture of compensation for the period covered by the form. 

Nonetheless, appellant failed to report the income. 

Appellant knowingly omitted this income from her February 13, 2013 EN1032 form, but 

she offered a reason for doing so. She hunted the alligators strictly for fun and entertainment. It 

was not a business enterprise of any sort and she did not consider the activity to be 

entrepreneurial in nature. Nonetheless, appellant did generate earning directly from customers 

and she was therefore obligated to disclose any such self-employment. 

In the case of S.R.,

6

 the claimant sold merchandise on eBay while receiving compensation 

for temporary total disability on the periodic rolls. She characterized the activity as a hobby and 

did not disclose her earnings on Forms EN1032s. The Board found that S.R., had undisclosed 

earnings from self-employment and affirmed OWCP’s finding that she forfeited her entitlement 

to compensation for the periods covered by the forms. 

In the case of Barbara L. Kanter,

7

 the claimant participated in dog shows and advertised 

her dogs. She sold seven puppies during a four-year period from $250.00 to $350.00 a piece. 

The Board affirmed a finding of forfeiture, as the employee knowingly failed to report earnings 

from her self-employment sales activities. 

In the case of C.R.,

8

 the claimant sold several drawings from his home for $600.00. He 

telephoned OWCP to report the sale and was told that it would not affect his benefits. When 

 5 Id. at § 10.5(f) (definition of disability). 

6

 Docket No. 07-618 (issued July 10, 2007). 

7

 46 ECAB 165 (1994). 

8

 Docket No. 09-720 (issued October 15, 2009). 
5

C.R., then failed to disclose the sale on a Form EN1032, OWCP found that he forfeited his 

entitlement to compensation. The Board reversed, finding that the telephone memorandum was 

sufficient to establish that he had notified OWCP. 

In the present case, appellant omitted her income from the sale of several alligators. As 

she did so knowingly, for reasons that, were insufficient, the Board finds that she forfeited her 

right to compensation with respect to the 15-month period for which the Form EN1032 was 

required or from July 28, 2012, when she first received compensation for wage loss, to 

February 13, 2013, when she signed the form. The Board will therefore affirm OWCP’s 

February 7, 2014 decision on the issue of forfeiture. 

LEGAL PRECEDENT -- ISSUE 2 

When an overpayment of compensation has been made 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 an individual is entitled.9

 Section 8129(b) of FECA describes the only 

exception: 

“Adjustment or recovery by the United States may not be made when incorrect 

payment had been made to an individual who is without fault and when 

adjustment or recovery would defeat the purpose of [FECA] or would be against 

equity and good conscience.”10

OWCP may consider waiving an overpayment only if the individual to whom it was 

made was not at fault in accepting or creating the overpayment. Each recipient of compensation 

benefits is responsible for taking all reasonable measures to ensure that payments she receives 

from OWCP are proper. The recipient must show good faith and exercise a high degree of care 

in reporting events which 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.11

Whether or not an individual was at fault with respect to the creation of an overpayment 

depends on the circumstances. The degree of care expected may vary with the complexity of 

those circumstances and the individual’s capacity to realize that she is being overpaid.12

 9

 5 U.S.C. § 8129(a). 

10 Id. at § 8129(b). 

11 20 C.F.R. § 10.433(a). 

12 Id. at § 10.433(b). 
6

ANALYSIS -- ISSUE 2 

The fact and amount of overpayment in this case are well established. The forfeiture of 

compensation from July 28, 2012 to February 13, 2013 created an overpayment of $10,848.63, 

representing all the compensation paid during the period. 

OWCP found appellant at fault in creating this overpayment on the grounds that she 

failed to provide information which she knew or should have known to be material. It is already 

established that she failed to provide information concerning her sale of several alligators. The 

question for determination is whether she knew or should have known that this information was 

material. 

The EN1032 form that appellant signed on February 13, 2013 advised that the 

information requested therein was required in connection with her benefits and would be used to 

decide whether she was entitled to continue receiving those benefits or whether her benefits 

should be adjusted. This was sufficient to put her on notice that the requested information was 

material to her receipt of benefits. Further, when OWCP accepted appellant’s claim, it notified 

her that she must report any employment or employment activities on CA-7 forms. The CA-7 

forms that appellant completed warned her that failure to report income may result in forfeiture 

of compensation benefits. The EN1032 form described her responsibilities and warned that 

severe penalties may be applied for failure to report all work activities thoroughly and 

completely over the past 15 months. Indeed, if appellant had any question whether the 

information was material, the form advised her to include it. 

Under the circumstances, the Board finds that appellant should have known that the 

disclosure of income earned from the sale of alligators to customers was material. OWCP made 

clear the reason for the information and the notifications and warnings were extensive and 

sufficiently broad to have put her on notice that any kind of sales work was material to her 

receipt of benefits and should have been disclosed. Accordingly, as appellant failed to provide 

information which she should have known to be material, the Board finds that she was at fault in 

creating the overpayment resulting from her forfeiture of compensation. The Board will 

therefore affirm OWCP’s February 7, 2014 decision on the issue of fault. 

LEGAL PRECEDENT -- ISSUE 3 

When an overpayment has been made to an individual who is entitled to further 

payments, the individual shall refund to OWCP the amount of the overpayment as soon as the 

error is discovered or her attention is called to same. If no refund is made, OWCP shall decrease 

later payments of compensation, taking into account the probable extent of future payments, the 

rate of compensation, the financial circumstances of the individual and any other relevant 

factors, so as to minimize any hardship.13

 13 20 C.F.R. § 10.441(a). 
7

ANALYSIS -- ISSUE 3 

As appellant was at fault in creating the overpayment, OWCP must, by law, recover the 

debt by decreasing later payments to which she is entitled. The hearing representative, however, 

was unaware that appellant was still receiving compensation for temporary total disability on the 

periodic rolls. Appellant was asked to send a check and was advised that the employing 

establishment could recover the overpayment from current salary or OPM could recover the 

overpayment from money otherwise payable from the Civil Service Retirement Fund. 

In the case of Gail M. Roe,

14 when an individual failed to provide the requested 

information on income, expenses and assets, the Board found that OWCP did not abuse its 

discretion in following minimum collection guidelines, which stated in general that government 

claims should be collected in full and that, if an installment plan is accepted, the installments 

should be large enough to collect the debt promptly.15

In the case of Ralph P. Beachum, Sr.,

16 the claimant failed to submit an overpayment 

recovery questionnaire or other financial information. Citing OWCP regulations,17 the Board 

noted that the individual who received the overpayment is responsible for providing information 

about income, expenses and assets as specified by OWCP. When an individual fails to provide 

that information, the Board held that OWCP should follow minimum collection guidelines. 

When the claimant in the case of R.C.,18 failed to respond to OWCP’s request for 

financial information within 30 days, the Board found that OWCP properly set the rate of 

recovery by deducting $50.00 from each continuing compensation payment until the $1,563.46 

debt was collected. The Board found no evidence that the recovery rate was unreasonable. 

As appellant is entitled to continuing payments of compensation, the Board finds that the 

hearing representative improperly directed recovery.19 The Board will set aside OWCP’s 

February 7, 2014 decision on the issue of recovery and will remand the case for OWCP to follow 

minimum collection guidelines in decreasing later payments to which appellant is entitled. 

 14 47 ECAB 268 (1995). 

15 See Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 

6.200.4.d(1)(b) (June 2009). The Federal Claims Collection Standards, published jointly by the Department of the 

Treasury and the Department of Justice (31 C.F.R. Parts 900 through 904) state that government claims should be 

collected in full. If an installment plan is accepted, the installments should be large enough to collect the debt 

promptly. 

16 55 ECAB 442 (2004). 

17 20 C.F.R. § 10.438(a). 

18 Docket No. 06-615 (issued September 12, 2006). 

19 See L.L., Docket No. 12-1724 (issued March 26, 2013) (holding, under the same circumstances, that OWCP 

properly found the overpayment due in full). Because the claimant in L.L., was entitled to further payments of 

compensation, it was unclear how OWCP could recover the debt in full given sections 8106(b) and 8129(a) of 

FECA and section 10.441(a) of OWCP’s regulations. 
8

Appellant may at any time, of course, provide the financial information requested to ensure that 

any hardship is minimized. 

CONCLUSION 

The Board finds that appellant forfeited her right to compensation from July 28, 2012 to 

February 13, 2013. The Board finds that she was at fault in creating the resulting overpayment. 

The Board further finds that OWCP improperly found the overpayment due in full. Further 

action is warranted on the issue of recovery. 

ORDER 

IT IS HEREBY ORDERED THAT the February 7, 2014 decision of the Office of 

Workers’ Compensation Programs is affirmed on the issues of forfeiture, fact of overpayment, 

amount of overpayment and fault and is set aside on the issue of recovery. The case is remanded 

for further action. 

Issued: September 19, 2014 

Washington, DC 

 

 Patricia Howard Fitzgerald, Judge 

 Employees’ Compensation Appeals Board 

 

 Michael E. Groom, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 James A. Haynes, Alternate Judge 

 Employees’ Compensation Appeals Board