United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

M.M., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Manhattan, IL, Employer 

__________________________________________ 

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Docket No. 15-265 

Issued: May 27, 2015 

Appearances: Case Submitted on the Record

Alan J. Shapiro, Esq., for the appellant

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

PATRICIA H. FITZGERALD, Deputy Chief Judge 

COLLEEN DUFFY KIKO, Judge 

JURISDICTION 

On November 17, 2014 appellant, through counsel, filed a timely appeal of a 

September 2, 2014 merit decision and an October 30, 2014 nonmerit 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 

the case.2

ISSUES 

 The issues are: (1) whether OWCP properly denied appellant’s request for a 

prerecoupment hearing; (2) whether it properly determined that she received a $2,149.14 

overpayment of compensation for the period April 3 to May 4, 2013; (3) whether OWCP 

properly determined that appellant was at fault in creating the overpayment of compensation, 

 1

 5 U.S.C. §§ 8101-8193. 

2

 The record also contains an October 29, 2014 OWCP decision terminating medical benefits and wage-loss 

compensation. Appellant has not appealed this decision. The record indicates that appellant’s counsel requested a 

hearing before OWCP with respect to this matter. 
2

thereby precluding waiver of recovery of the overpayment; and (4) whether it properly required 

repayment of the overpayment by deducting $100.00 every 28 days from her continuing 

compensation. 

FACTUAL HISTORY 

On December 5, 2011 appellant, then a 35-year-old letter carrier, injured her right arm 

while delivering a package on her mail route. OWCP accepted her claim for right shoulder and 

upper arm sprain. Appellant stopped work on December 5, 2011. 

Appellant was placed on the periodic compensation rolls. By letter dated June 19, 2012, 

OWCP outlined her entitlement to compensation benefits and her responsibility to return to work 

in connection with the injury accepted by OWCP. In an attached EN1049, it provided: 

“9. OVERPAYMENTS. To minimize the possibility of an overpayment of 

compensation, NOTIFY THIS OFFICE IMMEDIATELY WHEN YOU GO 

BACK TO WORK. If you receive your compensation payments via paper check, 

the payment shows the period for which payment is made. If you have worked 

for any portion of this period, return the payment to this office, even if you have 

already advised OWCP that you are working. For payments sent by electronic 

funds transfer (EFT), a notification of the date and amount of payment appears on 

the statement from your financial institution. You are expected to monitor your 

EFT deposits carefully, at least every two weeks. If you have worked for any 

portion of the period for which a deposit was made, advise OWCP immediately so 

that the overpayment can be collected.” 

 Appellant received compensation via direct deposit payments. 

On March 29, 2013 the employing establishment offered appellant a modified rural mail 

carrier position effective March 29, 2013. Appellant accepted the position and returned to work 

on April 3, 2013. 

In a May 16, 2014 letter, OWCP informed appellant that it made a preliminary 

determination that she had received a $2,149.14 overpayment of compensation from April 3 to 

May 4, 2013 because she received compensation benefits for temporary total disability for that 

period after she returned to work full time on April 3, 2013. It found that she was at fault in 

creating the overpayment because she knew or should have known that the amount was 

incorrect. OWCP explained that appellant was paid $3,761.00 in compensation from March 10 

to May 4, 2013; however, she was only entitled to compensation for the period March 10 to 

April 2, 2013 in the amount of $1,611.86.3

 This created an overpayment of $2,149.14. 

Appellant was paid through direct deposit into her bank account. OWCP informed her of her 

review rights, including her right to request a prerecoupment hearing within 30 days. It also 

 3

 The integrated Federal Employee Compensation System noted that for the period March 10 to April 6, 2013 

appellant received compensation benefits of $1,880.50 and for the period of April 7 to May 4, 2013, appellant 

received compensation benefits of $1,880.50. 
3

instructed appellant to complete an enclosed overpayment recovery form and submit supporting 

documentation within 30 days. 

On May 19, 2014 appellant noted that she had signed an agreement to return to work on 

March 29, 2013 and was told that she would receive compensation from OWCP for lost hours at 

three-quarters of her pay if the post office was not able to provide her with her usual number of 

hours of work per week. She indicated that she had no way of knowing that OWCP had not 

received the signed agreement in a timely manner to compensate for changes in the amount she 

would receive. Appellant noted providing the injury compensation department copies of the CA7 forms in June 2013 to cover pay from March 30 to April 26, 2013. She did not agree she was 

paid $2,149.14 and did not know how she would pay this amount back as she had many financial 

obligations and was strapped for money. 

In a June 5, 2013 letter, appellant indicated that she was alerted that one of her daughters 

spoke of committing suicide. She noted that for this reason she was unable to provide a list of 

her monthly bills and expenses and would need additional time to provide that information. 

Appellant did not submit an overpayment questionnaire or additional supporting documentation. 

She also did not request a prerecoupment hearing. 

In a decision dated September 2, 2014, OWCP found that appellant had received a 

$2,149.14 overpayment of compensation from April 3 to May 4, 2013 for which she was found 

at fault. It advised that the overpayment occurred because appellant had returned to work fulltime, eight hours per day, on April 3, 2013 and continued to receive compensation for total 

disability until May 4, 2013. OWCP explained that appellant was paid $3,761.00 in 

compensation from March 10 to May 4, 2013. It noted that she was entitled to compensation for 

the period March 10 to April 2, 2013 in the amount of $1,611.86. This created an overpayment 

of $2,149.14. OWCP was paid through direct deposit into her account.4

 It found that appellant 

was at fault in creating the overpayment because she reasonably should have been aware that she 

was not entitled to compensation benefits for total disability while working full time. Appellant 

should have known she was overpaid compensation when she received direct deposits into her 

account after she returned to work. OWCP advised that the overpayment would be collected by 

withholding $100.00 from continuing compensation payments every four weeks, beginning 

October 2, 2014. 

On September 8, 2014 appellant, through counsel, requested an oral hearing from the 

September 2, 2014 decision. 

By decision dated October 30, 2014, the Branch of Hearings and Review denied 

appellant’s September 8, 2014 request for a hearing finding that, the final decision concerning an 

overpayment is not subject to the hearing provision of 5 U.S.C. § 8124(b). 

 4 Id. 
4

LEGAL PRECEDENT -- ISSUE 1 

 OWCP regulations provide that a claimant may request a prerecoupment hearing with 

respect to an overpayment.5 Failure to request the prerecoupment hearing within 30 days shall 

constitute a waiver of the right to a hearing.6

 The only right to a review of a final overpayment 

decision is with the Board.7 The hearing provisions of section 8124(b) of FECA do not apply to 

final overpayment decisions.8 

ANALYSIS -- ISSUE 1 

 The May 16, 2014 preliminary determination of overpayment provided appellant with a 

right to request a prerecoupment hearing within 30 days. As noted above, if a claimant does not 

request a hearing within 30 days, it is considered a waiver of the right to a hearing.9 When the 

final overpayment decision is issued, there is no right to a hearing or a review of the written 

record and OWCP does not have discretion to grant such a request. The only right to appeal is 

with the Board.10 As appellant’s written request for a hearing dated September 8, 2014 was 

dated more than 30 days after the May 16, 2014 preliminary determination, it was untimely and 

she thus waived her right to a prerecoupment hearing.11 Furthermore, the Branch of Hearings 

and Review properly advised appellant that the decision was not subject to the hearing provision 

under 5 U.S.C. § 8124(b).12

LEGAL PRECEDENT -- ISSUE 2 

A claimant is not entitled to receive temporary total disability and actual earnings for the 

same period. OWCP procedures provide that an overpayment in compensation is created when a 

claimant returns to work but continues to receive wage-loss compensation.13

 5

 20 C.F.R. § 10.432. 

6 Id.; see also L.C., 59 ECAB 569 (2008); Willie C. Howard, 55 ECAB 564 (2004). 

7 Id. at § 10.440(b). 

8 Id.; see also Philip G. Feland, 48 ECAB 485 (1997). 

9 Id. at § 10.432. 

10 Id. at 10.440(b). 

11 Id. at § 10.432; see also A.M., Docket No. 13-222 (issued September 25, 2013) and E.V., Docket No. 10-1284 

(issued February 3, 2011) (where appellants not only untimely requested a prerecoupment hearing following a 

preliminary overpayment determination, but also submitted said request after the preliminary determination was 

finalized). 

12 Id. at § 10.440(b); see id. 

13 Danny E. Haley, 56 ECAB 393 (2005); Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial 

Overpayment Actions, Chapter 6.200.2(a) (May 2004). 
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ANALYSIS -- ISSUE 2 

The record indicates that appellant returned to a modified position on April 3, 2013. 

Appellant received wage-loss compensation for total disability through May 4, 2013. As noted 

above, she is not entitled to receive compensation for total disability after she has returned to 

work. Thus, an overpayment occurred. 

Since the evidence indicated that appellant returned to full-time work without wage loss 

on April 3, 2013, she was not entitled to total disability compensation beginning that date. The 

record shows that OWCP calculated that, from March 10 to May 4, 2013, appellant received 

$3,761.00 in total net disability compensation but he was only entitled to compensation from 

March 10 to April 2, 2013 in the amount of $1,611.86. OWCP explained how the overpayment 

occurred and provided this to appellant with the preliminary notice of overpayment. The Board 

finds that OWCP properly determined that appellant had received an overpayment of 

compensation in the amount of $2,149.14 for the period March 10 to May 4, 2013. 

LEGAL PRECEDENT -- ISSUE 3 

Section 8129(b) of FECA provides that “[a]djustment 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 this subchapter or would be 

against equity and good conscience.”14 No waiver of an overpayment is possible if the claimant 

is at fault in creating the overpayment.15

On the issue of fault, 20 C.F.R. § 10.433(a) provides that an individual is with fault in the 

creation of an overpayment who: (1) made an incorrect statement as to a material fact which the 

individual knew or should have known to be incorrect; or (2) failed to furnish information which 

the individual knew or should have known to be material; or (3) with respect to the overpaid 

individual only, accepted a payment which the individual knew or should have been expected to 

know was incorrect.16

With respect to whether an individual is without fault, section 10.433(b) of OWCP’s 

regulations provide that whether or not OWCP determines that an individual was at fault with 

respect to the creation of an overpayment depends on the circumstances surrounding the 

overpayment. The degree of care expected may vary with the complexity of those circumstances 

and the individual’s capacity to realize that he or she is being overpaid.17

 14 5 U.S.C. § 8129(b). 

15 Gregg B. Manston, 45 ECAB 344 (1994). 

16 20 C.F.R. § 10.433(a). See Kenneth E. Rush, 51 ECAB 116 (1999). 

17 Id. at § 10.433(b). 
6

ANALYSIS -- ISSUE 3 

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

she accepted payments that she knew or should have known to be incorrect. The Board finds, 

however, that OWCP failed to establish that at the time she accepted the initial payment of 

compensation following her return to work on April 3, 2013, she knew or should have known the 

payments were incorrect. 

As discussed, in cases where a claimant receives compensation through direct deposit, 

OWCP must establish that at the time a claimant received the direct deposit in question that he or 

she knew or should have known that the payment was incorrect.18 The Board has held that an 

employee who receives payments from OWCP in the form of a direct deposit may not be at fault 

for the first incorrect deposit into his or her account since the acceptance of the overpayment, at 

the time of receipt of the direct deposit, lacks the requisite knowledge.19 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 the claimant lacks the requisite knowledge at the 

time of the first incorrect payment.20 Whether or not OWCP determines that an individual is at 

fault with respect to the creation of an overpayment depends on the circumstances surrounding 

the overpayment.21 It is not appropriate, however, to make a finding that a claimant has accepted 

an overpayment via direct deposit until such time as a reasonable person would have been aware 

that this overpayment had occurred. This awareness could be established either through 

documentation such as a bank statement or notification from OWCP or where a reasonable 

period of time has passed during which a claimant could have reviewed independent 

confirmation of the incorrect payment.22

Appellant received compensation by direct deposit payments every 28 days. The 

evidence of record does not establish that, as of the first direct deposit of compensation after she 

returned to work on April 3, 2013, she knew or should have known that she was accepting a 

direct deposit to which she was not entitled. There is no documentation or other evidence to 

demonstrate that appellant had clear knowledge at the time she received a direct deposit from 

OWCP on April 6, 2013, covering the period March 10 to April 6, 2013, that a portion of the 

payment was incorrect, or that a reasonable period of time passed during which she could have 

reviewed bank statements or been informed of the incorrect payment.23 Therefore, appellant is 

not at fault in the acceptance of the direct deposit covering the period of the overpayment from 

March 10 to April 6, 2013. 

 18 See C.K., Docket No. 12-746 (issued May 1, 2012). 

19 See Tammy Craven, 57 ECAB 689 (2006). 

20 Id. 

21 Id.; see also K.D., Docket No. 13-451 (issued April 12, 2013). 

22 V.S., Docket No. 13-1278 (issued October 23, 2013). 

23 Supra note 2. 
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Although OWCP may have been negligent in making incorrect payments, this does not 

excuse a claimant from accepting payments he or she knew or should have known to be 

incorrect.24 In cases involving a series of incorrect payments, where the requisite knowledge is 

established by documentation from OWCP or simply with the passage of time and opportunity 

for discovery, the claimant will be at fault for accepting the payments subsequently deposited.25 

Thus, by the time of the second payment dated May 4, 2013 (covering the period April 7 to 

May 4, 2013) appellant should have known that she was no longer entitled to FECA wage-loss 

compensation after she returned to work on April 3, 2013. She should have taken further steps to 

prevent issuance of another compensation payment. Accordingly, the Board will affirm the 

finding of fault for the remaining April 7 to May 4, 2013 period of overpayment. 

The Board finds that this case is not in posture for decision regarding the issue of waiver 

of recovery of the overpayment for the direct deposit on April 6, 2013, covering the part of the 

overpayment from March 10 to April 6, 2013. The Board will set aside the September 2, 2014 

decision regarding the issue of fault as to the April 6, 2013 direct deposit and will remand the 

case for OWCP to determine whether appellant is entitled to waiver of recovery for the direct 

deposit of compensation covering the period of the overpayment from March 10 to 

April 6, 2013. 

LEGAL PRECEDENT -- ISSUE 4 

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

cases where OWCP seeks recovery from continuing compensation under FECA.26

ANALYSIS -- ISSUE 4 

In view of the Board’s decision on fault, it is premature to address the issue of recovery 

of the overpayment from continuing compensation payments for the period April 3 to 

May 4, 2013. 

CONCLUSION 

The Board finds that appellant received an overpayment of compensation from April 3 to 

May 4, 2013. The Board further finds that she was without fault for that portion of the 

overpayment covering April 3 to 6, 2013, but that she was at fault in creating that portion of the 

overpayment occurring from April 7 to May 4, 2013. The case will be remanded for 

consideration of waiver of the recovery of the overpayment from April 3 to 6, 2013. The case is 

not in posture for a decision with regard to recovery of the overpayment. Furthermore, OWCP 

properly denied appellant’s request for a hearing following a final overpayment decision. 

 24 See William E. McCarty, 54 ECAB 525 (2003). 

25 V.S., supra note 22; K.D., supra note 21. 

26 Lorenzo Rodriguez 51 ECAB 295 (2000); Albert Pineiro, 51 ECAB 310 (2000). 
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ORDER 

IT IS HEREBY ORDERED THAT the September 2, 2014 decision of the Office of 

Workers’ Compensation Programs is set aside in part and affirmed in part. The October 30, 

2014 decision is affirmed. 

Issued: May 27, 2015 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board