United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

C.P., Appellant 

and 

U.S. POSTAL SRVICE, POST OFFICE, 

Tampa, FL, Employer 

__________________________________________ 

) 

) 

) 

) 

) 

) 

) 

) 

Docket No. 14-975 

Issued: September 11, 2014 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

ALEC J. KOROMILAS, Alternate Judge 

MICHAEL E. GROOM, Alternate Judge 

JURISDICTION 

On March 25, 2014 appellant filed a timely appeal from a March 11, 2014 merit decision 

of the Office of Workers’ Compensation Programs (OWCP) regarding an overpayment of 

compensation. Pursuant to the Federal Employees’ Compensation Act1

 (FECA) and 20 C.F.R. 

§§ 501.2(c) and 501.3, the Board has jurisdiction over merits of this case. 

ISSUES 

The issues are: (1) whether appellant received a $544.64 overpayment of compensation 

for the period September 21, 2013 through February 8, 2014; (2) whether the overpayment is 

subject to waiver of recovery; and (3) whether OWCP properly withheld $50.00 from appellant’s 

continuing compensation payments beginning March 9, 2014. 

FACTUAL HISTORY 

On February 25, 2011 appellant, then a 53-year-old letter carrier, sustained injury, when 

her right knee popped while in the performance of her regular duties. OWCP accepted a right 

 1

 5 U.S.C. § 8101 et seq. 
2

knee strain and right medial meniscus tear. It paid wage-loss benefits and for a December 13, 

2011 right knee arthroscopy. Appellant eventually retired. 

In a letter dated January 21, 2014, the Office of Personnel Management (OPM) advised 

OWCP that appellant had elected Federal Employees’ Group Life Insurance (FEGLI) and that 

there had been no reduction for postretirement life insurance election, which commenced 

September 21, 2013. Deduction was to be made using code WO, effective September 21, 2013, 

for basic life insurance and optional life insurance, option B, at five times salary full reduction. 

In a February 6, 2014 manual adjustment form, OWCP calculated the life insurance 

deductions for the period of September 21, 2013 to February 8, 2014: the gross sum of 

$14,592.69 was reduced by $89.13 for basic life insurance, $736.73 for optional life insurance 

and $0 for postretirement basic life insurance, which netted a payment of $13,766.84. It found 

that the gross entitlement for the same period, $14,592.69, should have been reduced by $89.13 

for basic life insurance, $660.18 for optional life insurance and $621.18 for postretirement basic 

life insurance, which equaled net entitlement amount of $13,222.20. OWCP found that net 

payment of $13,766.84 minus net entitlement of $13,222.20 resulted in total overpayment 

of $544.64. 

OWCP informed appellant in a preliminary determination dated February 6, 2014 that 

she had received an overpayment of compensation in the amount of $544.64 because optional 

life insurance and postretirement basic life insurance were not properly deducted from her 

compensation payments for the period September 21, 2013 to February 8, 2014. It provided a 

calculation of the overpayment, noting that optional life insurance was deducted in the amount of 

$736.73 but should only have been deducted $660.18 and that OWCP had failed to make any 

deduction for postretirement benefit life insurance when it should have deducted $621.18. The 

credit of $76.54 from the over deduction of optional life insurance, subtracted from the under 

deduction of postretirement life insurance in the amount of $621.18 resulted in an overpayment 

of $544.64. It found that appellant was not at fault in the creation of the overpayment and 

requested that she provide financial information within 30 days or if she contested that an 

overpayment occurred. 

Appellant requested that OWCP make a decision based on the written evidence. She 

completed an overpayment recovery questionnaire with supporting documentation on 

February 24, 2014 listing monthly income of $2,585.54 and total monthly expenses of $2,650.98. 

This was comprised of mortgage, $1,066.00; car payment $352.73; car insurance $103.25; food 

$500.00; clothing $100.00; utilities $200.00 for electricity; $60.00 for water; $60.00 for 

telephone; $139.00 for cable; and $270.00 as minimum payments on five credit cards. Total 

assets of $83,341.31 were also listed, which included $20.00 cash; $600.00 checking; $1,400.00 

savings; $14,521.00 in Edward Jones investment; and $66,800.00 thrift saving plan (TSP). 

By decision dated March 11, 2014, OWCP finalized that appellant had received an 

overpayment of compensation in the amount of $544.64 for the period September 21, 2013 

through February 8, 2014 as optional life insurance was over deducted but no postretirement 

basic life insurance was deducted from her compensation payments. It found that she was not at 

fault in the creation of the overpayment but that the overpayment was not subject to waiver as 

her assets exceeded the statutory amount of $4,800.00. OWCP directed recovery by deducting 

$50.00 every 28 days from her continuing compensation benefits. 
3

LEGAL PRECEDENT -- ISSUE 1 

FECA 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 his or her 

duty.2

 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.3

 

Under FEGLI, most civilian employees of the Federal Government are eligible to 

participate in basic life insurance and one or more of the options.4 The coverage for basic life 

insurance is effective unless waived5 and the premiums for basic and optional life coverage are 

withheld from the employee’s pay.6

 When an under withholding of life insurance premiums 

occurs, the entire amount is deemed an overpayment because OWCP must pay the full premium 

to OPM upon discovery of the error.7

 

ANALYSIS -- ISSUE 1 

The record reflects that OPM notified OWCP of incorrect withholding of two FEGLI 

options for the period September 21, 2013 to February 8, 2014. OWCP calculated the amount of 

the resulting overpayment to be $544.64. On January 21, 2004 OPM informed OWCP that 

appellant elected postretirement basic life insurance coverage. Appellant’s final base salary was 

$56,508.00 and OPM instructed OWCP to make deductions for code WO for basic life under 

opinion B at 5 times salary, full reduction as OWCP did not receive timely notice of her election 

in 2013 it under withheld insurance primaries in the amount of $544.64. The Board finds that 

OWCP properly determined the fact and the amount of overpayment. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8129(a) of FECA provides that when an overpayment of compensation occurs 

because of an error of fact of law, adjustment or recovery shall be made by decreasing later 

payment to which the individual is entitled.8 The only exception to this requirement that an 

overpayment must be recovered is set forth in section 8129(b). 

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

has 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. 

 2

 5 U.S.C. § 8102(a). 

3 Id. at § 8129(a). 

4

 Id. at § 8702(a). 

5 Id. at § 8702(b). 

6 Id. at § 8707. 

7 Id. at § 8707(d). See Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, 48 ECAB 334 (1997). 

8 Id. at § 8129(a). 
4

Thus, a finding that appellant was without fault is not sufficient, in and of itself, for 

OWCP to waive the overpayment. OWCP must exercise its discretion to determine whether 

recovery of the overpayment would defeat the purpose of FECA or would be against equity and 

good conscience, pursuant to the guidelines provided in the implementing federal regulations. 

Section 10.436 of the implementing regulations9

 provide that recovery of an overpayment 

will defeat the purpose of FECA if recovery would cause hardship to a currently or formerly 

entitled beneficiary such that: (a) the beneficiary from whom OWCP seeks recovery needs 

substantially all of his or her current income, including compensation benefits, to meet current 

ordinary and necessary living expenses; and (b) the beneficiary’s assets do not exceed the 

resource base of $4,800.00 for an individual.10 An individual is deemed to need substantially all 

of his or her current income to meet current ordinary and necessary living expenses if monthly 

income does not exceed monthly expenses by more than $50.00. In other words, the amount of 

monthly funds available for debt repayment is the difference between current income and 

adjusted living expenses (i.e., ordinary and necessary living expenses plus $50.00).11 

Recovery of an overpayment is considered to be against equity and good conscience 

when any individual, in reliance on such payments or on notice that such payments would be 

made, gives up a valuable right or changes his position for the worse.12 Conversion of the 

overpayment into a different form, such as food, consumer goods, real estate, etc., from which 

the claimant derived some benefit, is not to be considered a loss.13 

The individual who received the overpayment is responsible for providing information 

about income, expenses and assets as specified by OWCP. This information is needed to 

determine whether or not recovery of an overpayment would defeat the purpose of FECA or be 

against equity and good conscience. This information will also be used to determine the 

repayment schedule, if necessary.14 

ANALYSIS -- ISSUE 2 

OWCP found that appellant was not at fault in creating the overpayment of compensation 

and considered whether she was entitled to waiver of recovery. Waiver is only possible if 

recovery would defeat the purpose of FECA or would be against equity and good conscience. In 

order to establish that repayment of the overpayment would defeat the purpose of FECA, 

appellant must show that she requires substantially all of her income to meet current ordinary 

 9

 20 C.F.R. § 10.436. 

10 Id. Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 

6.200.6.a(1)(b) (October 2004). 

11 Id. 

12 Id. at § 10.437(b). 

13 Federal (FECA) Procedure Manual, see supra note 10, Chapter 6.200.6.b(3) (October 2004). 

14 20 C.F.R. § 10.438(a); Ralph P. Beachum, Sr., 55 ECAB 442 (2004). 
5

and necessary living expenses and that her assets do not exceed the established limit as 

determined by OWCP’s procedures.15 

OWCP determined that appellant’s financial assets exceeded the allowed resource base. 

Appellant provided an overpayment recovery questionnaire listing assets of $83,341.31. 

OWCP’s procedures provide that assets must not exceed a resource base of $4,800.00 for an 

individual or $8,000.00 for an individual with a spouse or dependent plus $960.00 for each 

additional dependent.16 Appellant has no qualifying dependent and thus her qualifying amount 

for waiver is $4,800.00.17 As her assets of $83,341.3118 exceed the amount specified, she has not 

established that recovery would defeat the purpose of FECA.19 

Additionally, the evidence does not demonstrate that repayment of the overpayment 

would be against equity and good conscience. Appellant submitted no argument that she relied 

upon the incorrect payments to her detriment or that she would experience severe financial 

hardship attempting to repay the debt. Consequently, OWCP properly denied waiver of recovery 

of the overpayment. 

On appeal, appellant contends that she was not at fault in creating the overpayment. The 

fact that a claimant is without fault in creating an overpayment does not preclude OWCP from 

recovering all or part of the overpayment.20 

LEGAL PRECEDENT -- ISSUE 3 

The Board’s jurisdiction over recovery of an overpayment is limited to reviewing those 

cases where OWCP seeks recovery from continuing compensation under FECA. Section 

10.441(a) of the regulations provide. 

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 his 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.21 

 15 Id. at § 10.436. 

16 See 5 U.S.C. § 8116(a); 20 C.F.R. § 10.500. 

17 See J.F., Docket No. 10-1185 (issued February 1, 2011). 

18 See R.A., Docket No. 13-1121 (issued October 29, 2013). TSP savings can be included in the asset base. 

19 It is unclear whether the hearing representative took into account a fifth credit card and cable in appellant’s 

monthly expenses, which would make her monthly expenses a few hundred over her reported monthly income. 

However, as appellant has the financial assets to resolve the debt and she has not shown that repayment of the 

overpayment would defeat the purpose of FECA, an analysis into the whether appellant substantially requires all of 

her income to meet current ordinary and necessary living expenses is not necessary. 

20 See George A. Rodriguez, 57 ECAB 224 (2005); Joyce O. Diaz, 51 ECAB 124 (1999). 

21 Id. at § 10.441. 
6

ANALYSIS -- ISSUE 3 

OWCP reduced appellant’s future compensation benefits by $50.00 per month taking into 

account the amount of the compensation and the financial circumstances of appellant to 

minimize hardship, as well as the factors set forth in section 10.441. It found that this method of 

recovery would minimize any resulting hardship on her. The Board finds that OWCP properly 

required repayment of the overpayment by deducting $50.00 from appellant’s ongoing 

compensation payments every four weeks. 

CONCLUSION 

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation in the amount of $544.64 for the period September 21, 2013 through 

February 8, 2014 for which she was not at fault. Appellant is not entitled to waiver of recovery 

of the overpayment and it should be recovered by withholding $50.00 per month from her 

continuing compensation benefits. 

ORDER 

IT IS HEREBY ORDERED THAT the March 11, 2014 decision of the Office of 

Workers’ Compensation Programs is affirmed. 

Issued: September 11, 2014 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 Michael E. Groom, Alternate Judge 

 Employees’ Compensation Appeals Board