United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

C.H., Appellant 

and 

DEPARTMENT OF THE ARMY, TANK 

AUTOMOTIVE & ARMAMENTS COMMAND, 

Anniston, AL, Employer 

__________________________________________ 

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Docket No. 15-1402 

Issued: September 17, 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 June 12, 2015 appellant filed a timely appeal from a May 19, 2015 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 a $7,688.57 overpayment of 

compensation; (2) whether OWCP abused its discretion by refusing to waive recovery of the 

overpayment; and (3) whether OWCP properly required repayment of the overpayment by 

deducting $75.00 from appellant’s compensation payments every 28 days. 

 1

 5 U.S.C. §§ 8101-8193. 
2

FACTUAL HISTORY 

OWCP accepted that on June 19, 1985 appellant, then a 37-year-old mechanic, sustained 

injury due to picking up a starter from the bottom of a container. Appellant’s claim was accepted 

for low back strain, aggravation of degenerative disc disease, bulging disc at L5-S1, subdural 

empyema (resulting from an epidural injection), meningitis, and chronic headaches. She stopped 

work following the injury and returned to work intermittently. Appellant stopped work again on 

December 20, 1993 and received ongoing total disability compensation benefits. 

In a July 17, 2013 letter to OWCP, Jeffrey Karl, an injury compensation official for the 

employing establishment stated: 

“This is in regard to the injury compensation claim shown above, and the 

potential for a FERS [Federal Employees Retirement System] offset in this case. 

The above-referenced claimant is now 66 years of age. Any Social Security 

Benefits that she may now be receiving is [sic] considered as being retirement 

benefits by the Social Security Administration (SSA). 

“If that is the case, since this claimant is a FERS employee, her compensation 

payments must be now be offset by any part of her SSA benefit that was 

calculated by using her [f]ederal employment earnings, if SSA considers her to be 

‘retired,’ rather than ‘disabled,’ under the SSA program. 

“Please send off a SSA FERS Questionnaire to SSA to inquire as to the claimant’s 

status, and if the claimant is considered to be ‘retired,’ what the offset should be.” 

In a July 15, 2014 letter to OWCP, Mr. Karl noted that appellant was now 67 years of age 

and that any SSA benefits that she is now receiving were considered as being retirement benefits 

by the SSA. He stated: 

“Since this claimant is a FERS employee, her compensation payments must be 

now be offset by any part of her SSA benefit that was calculated by using her 

[f]ederal employment earnings. 

“Please send off a SSA FERS Questionnaire to SSA to inquire as to what the 

Offset should be.” 

In August 2014 OWCP received information from the SSA advising of the offset 

amounts for FERS dual benefits beginning in June 2013. Effective August 24, 2014, it reduced 

appellant’s ongoing disability compensation benefits based on the amount of her social security 

benefits which were attributable to her federal service. 

In an August 27, 2014 letter, OWCP advised appellant of its preliminary determination 

that she received a $7,688.57 overpayment of compensation for the period June 1, 2013 to 

August 23, 2014 because she received prohibited dual benefits in the form wage-loss 
3

compensation under FECA and benefits under SSA without an appropriate offset being made.2

 

It also made a preliminary determination that appellant was not at fault in the creation of the 

overpayment. OWCP advised appellant that she could submit evidence challenging the fact, 

amount, or finding of fault and request waiver of the overpayment. It informed appellant that she 

could submit additional evidence in writing or at pre-recoupment hearing, but that a prerecoupment hearing must be requested within 30 days of the date of the written notice of 

overpayment. OWCP requested that appellant complete and return an enclosed financial 

information questionnaire (Form OWCP-20) within 30 days even if she was not requesting 

waiver of the overpayment. 

Appellant submitted a completed Form OWCP-20 on September 13, 2014 in which she 

indicated that her monthly income was $2,502.99 (comprised of FECA and SSA benefits), that 

her monthly expenses were $2,780.00,3

 and that her assets were $4,234.64 (comprised of 

checking and saving account balances). She argued that she was not at fault in the creation of 

the overpayment and requested waiver of recovery of the overpayment. 

Appellant requested a telephonic pre-recoupment hearing with an OWCP hearing 

representative on the issues of fact, amount, fault, and possible waiver of the overpayment. 

During the hearing held on April 8, 2015, the hearing representative explained to appellant that 

she would have to submit financial documentation on monthly income and monthly ordinary and 

necessary expenses to support waiver of recovery of the overpayment. Appellant testified that 

she spent more than she made and that she took in her grandchildren in October 2013, a 

circumstance which increased her food and utility expenses. 

After the hearing, appellant submitted a letter dated April 20, 2015 referencing attached 

documents which included a bank statement, three credit card statements, and a handwritten 

statement of her reported expenses. She also stated that her daughter and two grandchildren had 

lived with her temporarily but that now only her two grandchildren resided with her for an 

indefinite period of time. The bank statement reflected various payments including cash 

withdrawals and payment of various expenses, such as multiple Super Walmart purchases. The 

bank statement also had deductions for a cable bill, food purchases, and several utilities. The 

minimum monthly payments required on the three credit card statements totaled $488.00. 

Appellant also provided a list of expenses for utilities ($711.02), insurance ($465.56), food 

($267.04), car gas ($99.25), overdraft safety ($32.00), unspecified household items ($105.00), 

car repair ($252.17), home equity loan ($125.00), recreation ($94.13), and church ($40.00). 

By decision dated May 19, 2015, an OWCP hearing representative determined that 

appellant received a $7,688.57 overpayment of compensation. The hearing representative found 

that appellant was not at fault in the creation of the overpayment, but determined that the 

overpayment was not subject to waiver of recovery because appellant had not submitted 

sufficient financial documentation to support such waiver. It was noted that appellant asserted 

 2

 OWCP provided calculations based on SSA documentation that revealed that $7,688.57 had not been offset for 

the period June 1, 2013 to August 23, 2014. 

3

 Appellant listed claimed monthly expenses of $330.00 for rent/mortgage, $250.00 for food, $75.00 for clothing, 

$608.00 for food, $917.00 for miscellaneous expenses, and $600.00 for credit card debt. 
4

that she had various monthly expenses which exceeded her monthly income, but that the bank 

statement and credit card bills submitted did not support her claimed monthly expenses. The 

hearing representative required repayment of the overpayment by deducting $75.00 from 

appellant’s continuing compensation payments every 28 days. 

LEGAL PRECEDENT -- ISSUE 1 

Section 8116(d) of FECA requires that compensation benefits be reduced by the portion 

of SSA benefits that are attributable to federal service and that, if an employee receives SSA 

benefits based on federal service, his or her compensation benefits shall be reduced by the 

amount of SSA benefits attributable to his or her federal service.4

OWCP procedures provide that, while SSA benefits are payable concurrently with FECA 

benefits, the following restrictions apply: in disability cases, FECA benefits will be reduced by 

SSA benefits paid on the basis of age and attributable to the employee’s federal service.5 The 

offset of FECA benefits by SSA benefits attributable to employment under the Federal 

Employees Retirement System (FERS) is calculated as follows: where a claimant has received 

SSA benefits, OWCP will obtain information from SSA on the amount of the claimant’s benefits 

beginning with the date of eligibility to FECA benefits. SSA will provide the actual amount of 

SSA benefits received by the claimant/beneficiary. SSA will also provide a hypothetical SSA 

benefit computed without the FERS covered earnings. OWCP will then deduct the hypothetical 

benefit from the actual benefit to determine the amount of benefits which are attributable to 

federal service and that amount will be deducted from FECA benefits to obtain the amount of 

compensation payable.6

ANALYSIS -- ISSUE 1 

The Board finds that appellant received a $7,688.57 overpayment of compensation 

because she received prohibited dual benefits in that amount for the period June 1, 2013 to 

August 23, 2014. Appellant received both wage-loss compensation under FECA and benefits 

under SSA for the period June 1, 2013 to August 23, 2014. As previously stated, the portion of 

the SSA benefits appellant received as a federal employee as part of her FERS retirement 

package concurrently with the benefits he or she received under FECA is a prohibited dual 

benefit.7

 OWCP requested and SSA provided information regarding appellant’s applicable SSA 

rates and their effective dates. Based on these rates, it determined that the prohibited dual 

benefits appellant received from June 1, 2013 to August 23, 2014 created an overpayment of 

compensation in the amount of $7,688.57. The Board has reviewed OWCP’s calculations of 

 4

 5 U.S.C. § 8116(d). See D.S., Docket No. 12-689 (issued October 10, 2012). 

5

 Federal (FECA) Procedure Manual, Part 2 -- Claims, Dual Benefits, Chapter 2.1000.4(a), (e) (February 1995). 

OWCP does not require an election between FECA benefits and SSA benefits except when they are attributable to 

the employee’s federal service. See R.C., Docket No. 09-2131 (issued April 2, 2010). 

6

 FECA Bulletin No. 97-09 (issued February 3, 1997); E.C., Docket No. 14-1743 (issued December 4, 2014). 

7 See P.G., Docket No. 13-589 (issued July 9, 2013). 
5

benefits appellant received for the period June 1, 2013 to August 23, 2014 and finds that OWCP 

properly determined that an overpayment in the amount of $7,688.57 was created. 

LEGAL PRECEDENT -- ISSUE 2 

The waiver or refusal to waive an overpayment of compensation by OWCP is a matter 

that rests within OWCP’s discretion pursuant to statutory guidelines.8

 These statutory guidelines 

are found in section 8129(b) of FECA which states: “Adjustment or recovery [of an 

overpayment] 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 

this subchapter or would be against equity and good conscience.”9 If OWCP finds a claimant to 

be without fault in the matter of an overpayment, then, in accordance with section 8129(b), 

OWCP may only recover the overpayment if it determined that recovery of the overpayment 

would neither defeat the purpose of FECA nor be against equity and good conscience. 

According to 20 C.F.R. § 10.436, recovery of an overpayment would defeat the purpose 

of FECA if recovery would cause hardship because the beneficiary needs substantially all of his 

or her income (including compensation benefits) to meet current ordinary and necessary living 

expenses, and also, if the beneficiary’s assets do not exceed a specified amount as determined by 

OWCP from data provided by the Bureau of Labor Statistics.10 According to 20 C.F.R. 

§ 10.437, recovery of an overpayment is considered to be against equity and good conscience 

when an individual who received an overpayment would experience severe financial hardship 

attempting to repay the debt and when an 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.

11 To establish that a valuable right has been relinquished, it must be shown that the right 

was in fact valuable, that it cannot be regained and that the action was based chiefly or solely in 

reliance on the payments or on the notice of payment.12

 Section 10.438 of OWCP regulations provide: 

“(a) 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 the FECA or be against equity and good conscience. 

 8 See Robert Atchison, 41 ECAB 83, 87 (1989). 

9

 5 U.S.C. § 8129(b). 

10 20 C.F.R. § 10.436. An individual is deemed to need substantially all of his or her monthly income to meet 

current and ordinary living expenses if monthly income does not exceed monthly expenses by more than $50.00. 

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. See Federal (FECA) Procedure Manual, Part 6 -- Debt 

Management, Initial Overpayment Actions, Chapter 6.200.6(a) (October 2004); B.F., Docket No. 13-785 (issued 

September 20, 2013). 

11 20 C.F.R. § 10.437(a), (b). 

12 Id. at § 10.437(b)(1). 
6

This information will also be used to determine the repayment schedule, if 

necessary. 

“(b) Failure to submit the requested information within 30 days of the request 

shall result in denial of waiver, and no further request for waiver shall be 

considered until the requested information is furnished.”13

ANALYSIS -- ISSUE 2 

 OWCP properly determined that appellant did not establish entitlement to waiver of 

recovery of the $7,688.57 overpayment under the relevant standards. Appellant did not provide 

sufficient financial information within the appropriate time period to show that she was entitled 

to waiver of recovery of the overpayment. 

 As noted by OWCP hearing representative, appellant asserted that she had various 

monthly expenses which exceeded her monthly income.14 The Board finds that OWCP properly 

determined that appellant did not provide proof for all of her reported monthly expenses and/or 

that they constituted ordinary and necessary living expenses. Appellant submitted a bank 

statement which reflected various payments including cash withdraws and payment of various 

expenses, such as multiple Super Walmart purchases. The bank statement also had deductions 

for a cable bill, utilities, and food purchases. However, as noted by OWCP, this bank statement 

by itself would not establish that specific expenses were required or indicate what the minimum 

amount charged monthly would be for such expenses. Appellant provided credit card statements 

indicating that she had monthly minimum credit card payments of $488.00. The Board notes, 

however, the submission of these credit card statements, without supporting explanation and 

documentation, does not establish that the credit card payments were for ordinary and necessary 

monthly expenses. In an April 2015 statement, appellant claimed monthly expenses for utilities 

($711.02), insurance ($465.56), food ($267.04), car gas ($99.25), overdraft safety ($32.00), 

unspecified household items ($105.00), car repair ($252.17), and home equity loan ($125.00), 

but she did not provide supporting documentation to clearly establish such expenses.15 She also 

listed monthly expenses for recreation ($94.13) and church ($40.00), but she did not submit 

evidence showing that these were ordinary and necessary monthly expenses. 

 For these reasons, appellant did not submit sufficient financial information to establish 

that recovery of the overpayment would defeat the purpose of FECA. She has not shown both 

that she needs substantially all of her current income to meet ordinary and necessary living 

expenses and that her assets do not exceed the allowable resource base. As appellant has not 

 13 Id. at § 10.438. 

14 Appellant had indicated that her monthly income was $2,502.99, comprised of FECA and SSA benefits. 

15 On appeal appellant argues that the bank statement she submitted documented monthly expenses such as those 

for utilities. However, as noted by OWCP, the bank statement would not, in and of itself, show that the deductions 

were for expenses coming due on a monthly basis. In her Form OWCP-20, completed in September 2014, appellant 

also claimed other monthly expenses, including $330.00 for rent/mortgage, $75.00 for clothing, and $917.00 for 

unidentified miscellaneous expenses. She also failed to provide evidence documenting these claimed monthly 

expenses. 
7

shown that her current ordinary and necessary living expenses exceed her monthly income by 

more than $50.00 she has not shown that she needs substantially all of her current income to 

meet current ordinary and necessary living expenses.16 Because she has not met the first prong 

of the two-prong test of whether recovery of the overpayment would defeat the purpose of 

FECA, it is not necessary for OWCP to consider the second prong of the test, i.e., whether 

appellant’s assets do not exceed the allowable resource base. 

 Appellant also has not established that recovery of the overpayment would be against 

equity and good conscience because she has not shown, for the reasons noted above, that she 

would experience severe financial hardship in attempting to repay the debt or that she 

relinquished a valuable right or changed her position for the worse in reliance on the payment 

which created the overpayment.17

 Because appellant has failed to establish that recovery of the overpayment would defeat 

the purpose of FECA or be against equity and good conscience, she has failed to show that 

OWCP abused its discretion by refusing to waive the overpayment. 

LEGAL PRECEDENT -- ISSUE 3 

 Section 10.441 of Title 20 of the Code of Federal Regulations provide in pertinent part: 

“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 the 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.”18

ANALYSIS -- ISSUE 3 

 The record supports that, in requiring repayment of the overpayment by deducting $75.00 

from appellant’s compensation payments every 28 days, OWCP took into consideration the 

financial information submitted by appellant as well as the factors set forth in section 10.441 and 

found that this method of recovery would minimize any resulting hardship on appellant. 

Therefore, OWCP properly required repayment of the overpayment by deducting $75.00 from 

appellant’s compensation payments every 28 days. 

 16 See supra note 10. 

17 See William J. Murphy, 41 ECAB 569, 571-72 (1989). 

18 20 C.F.R. § 10.441(a); see Donald R. Schueler, 39 ECAB 1056, 1062 (1988). 
8

CONCLUSION 

 The Board finds that appellant received a $7,688.57 overpayment of compensation. The 

Board further finds that OWCP did not abuse its discretion by refusing to waive recovery of the 

overpayment and that it properly required repayment of the overpayment by deducting $75.00 

from appellant’s compensation payments every 28 days. 

ORDER 

IT IS HEREBY ORDERED THAT the May 19, 2015 decision of the Office of 

Workers’ Compensation Programs is affirmed. 

Issued: September 17, 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