United States Department of Labor

Employees’ Compensation Appeals Board

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C.R., Appellant

and

DEPARTMENT OF VETERANS AFFAIRS, 

VETERANS HEALTH ADMINISTRATION, 

CONNECTICUT HEALTHCARE SYSTEM, 

West Haven, CT, Employer

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Docket No. 17-0117

Issued: April 4, 2018

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

PATRICIA H. FITZGERALD, Deputy Chief Judge

ALEC J. KOROMILAS, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On October 25, 2016 appellant filed a timely appeal from a July 19, 2016 merit decision 

of the Office of Workers’ Compensation Programs (OWCP). Pursuant to 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 OWCP properly determined that appellant received an 

overpayment of compensation in the amount of $966.94 for the period November 3 through 15, 

2014; and (2) whether OWCP properly determined that appellant was at fault in the creation of the 

overpayment, thereby precluding waiver of recovery of the overpayment.
2

FACTUAL HISTORY

On January 17, 2014 appellant, then a 69-year-old health technician, filed a traumatic 

injury claim (Form CA-1) alleging that she felt excruciating, searing pain in her right arm while 

opening a drawer at work on January 10, 2014.

The claim was initially administratively handled as it appeared to be a minor injury that 

resulted in minimal or no lost time from work. When appellant did not return to work in a fulltime capacity, OWCP formally adjudicated the claim on April 28, 2014 and accepted it for rotator 

cuff tear of the right shoulder. Appellant underwent an authorized July 18, 2014 surgical repair of 

the right shoulder on July 18, 2014.

In a letter dated September 23, 2014, OWCP notified appellant that she would be receiving 

compensation payments on the periodic compensation rolls as of August 29, 2014. To minimize 

the possibility of an overpayment of compensation, she was instructed to notify OWCP 

immediately when she went back to work. For payments sent by electronic funds transfer (EFT), 

a notification of the date and amount of payment appeared on the statement from her financial 

institution. Appellant was expected to monitor her EFT deposits carefully, at least every two

weeks. If she worked for any portion of the period for which a deposit was made, she was to 

advise OWCP immediately so that the overpayment could be collected. OWCP noted that 

appellant’s first payment would be for the period July 18 to August 23, 2014 in the net amount of 

$2,703.65. 

On November 10, 2014 appellant informed OWCP that she had returned to full-time work 

on November 3, 2014. 

On November 15, 2014 OWCP paid appellant compensation for the period October 19 

through November 15, 2014. In a November 17, 2014 compensation worksheet, it noted that 

appellant had returned to full-time limited duty on November 3, 2014. For the period November 3 

to 15, 2014, OWCP calculated that she had received compensation in the net amount of $966.94. 

This worksheet verified that appellant received gross compensation every 28 days in the amount 

of $2,258.27.1 During the 13-day period of overpayment appellant was entitled to gross 

compensation of $1,048.49, however, after a health insurance premium in the amount $81.55 was 

subtracted, appellant received net compensation in the amount of $966.94.

By letter dated November 26, 2014, OWCP advised appellant of its preliminary 

determination that an overpayment of compensation in the amount of $966.94 had been created 

during the period November 3 through 15, 2014, as she was paid compensation after her return to 

full-duty work on November 3, 2014. It found that she was at fault in creating the overpayment 

as she knew or should have known that she was not entitled to receive wage-loss compensation 

after returning to full-time work. OWCP informed appellant that she had a right to a 

prerecoupment hearing before an OWCP hearing representative. Appellant was also advised to 

complete the enclosed Form OWCP-20 overpayment recovery questionnaire and submit 

 

1 Appellant’s daily wage rate was calculated as $80.6525. 
3

supporting financial documentation, as this was necessary information on the issues of waiver and 

recovery of the overpayment.

On January 8, 2015 OWCP received appellant’s December 26, 2014 overpayment 

recovery questionnaire, which listed monthly income, monthly expenses, and additional funds. 

Appellant requested a telephonic conference with OWCP on the issues of fault and possible waiver 

of recovery of the overpayment. She stated on the overpayment questionnaire as well as in a 

December 26, 2014 letter that the overpayment was not her fault as she had made several calls to 

OWCP advising that she was going back to work on November 3, 2014 and that OWCP had the 

letter from her doctor which also advised that she was going back to work on November 3, 2014. 

Appellant stated that, when the deposit was received at her bank, she thought it represented her 

earned salary. OWCP received an updated Form OWCP-20 on January 14, 2015. No further 

action was taken by OWCP.

The July 18, 2016 scheduled overpayment telephone conference did not take place.2

By decision dated July 19, 2016, OWCP finalized the overpayment determination that an 

overpayment of compensation in the amount of $966.94 was created for the period November 3 

through 15, 2014 for which appellant was with fault as she had accepted compensation payments 

she knew or reasonably should have known she was not entitled. It requested that she repay the 

full amount of $966.94 within 30 days. 

LEGAL PRECEDENT -- ISSUE 1

Section 8102 of 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 duty.3

Section 8116 of FECA defines the limitations on the right to receive compensation benefits. 

This section of FECA provides that, while an employee is receiving compensation, he or she may 

not receive salary, pay or remuneration of any type from the United States, except in limited 

circumstances.4 Section 10.500 of OWCP regulations provide that compensation for wage loss 

due to disability is available only for any periods during which an employee’s work-related 

medical condition prevents him or her from earning the wages earned before the work-related 

injury.5

 

2 On appeal appellant acknowledges that the telephone conference did not take place because of scheduling 

difficulties.

3 5 U.S.C. § 8102(a).

4

Id. at § 8116(a); see Danny E. Haley, 56 ECAB 393 (2005).

5 20 C.F.R. § 10.500.
4

ANALYSIS -- ISSUE 1

The Board finds that an overpayment of compensation was created. 

OWCP accepted appellant’s claim and paid wage-loss compensation, placing her on the 

periodic compensation rolls as of August 29, 2014. The record establishes that appellant returned 

to full-time work on November 3, 2014, however, she continued to received FECA wage-loss 

compensation through November 15, 2014. Appellant was not entitled to receive FECA wageloss compensation and federal salary for the same time period.6

The record establishes that appellant returned to full-time work on November 3, 2014. 

Appellant continued to receive wage-loss compensation until November 15, 2014. The record 

reflects that she received wage-loss compensation for the period October 19 through 

November 15, 2014 in one direct deposit payment. In a compensation termination worksheet, 

OWCP noted appellant’s gross compensation for the 13-day period November 3 to 15, 2014 

totaled $1,048.49, and that after the premium for health benefits was subtracted she received a net 

overpayment in the amount of $966.94. Appellant has not disputed the fact or amount of 

overpayment. The Board finds that an overpayment of compensation in the amount of $966.94

was created in this case.7

LEGAL PRECEDENT -- ISSUE 2

5 U.S.C. § 8129(b) provides: 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.8 A claimant who is at fault in the creation of the overpayment is not entitled to waiver.9 

On the issue of fault, 20 C.F.R. § 10.433(a) provides that an individual will be found at fault if he 

or she has done any of the following: (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 was incorrect.

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

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.10 The Board has 

also held in cases involving a series of incorrect payments, where the requisite knowledge is 

established by a letter or telephone call from OWCP or simply with the passage of time and a 

greater opportunity for discovery, the claimant will be at fault for accepting the payments 

 

6 Supra note 4. 

7 See supra note 4.

8 5 U.S.C. § 8129(b).

9 See Robert W. O Brien, 36 ECAB 541, 547 (1985).

10 See Tammy Craven, 57 ECAB 689 (2006).
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subsequently deposited.11 Previous cases have held that receiving one or two erroneous direct 

deposit payments does not necessarily create the requisite knowledge to find that a claimant was 

at fault in the creation of the overpayment.12

ANALYSIS -- ISSUE 2

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

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

however, that it failed to establish that she knew or should have known that the initial payment she 

received after she resumed work on November 3, 2014 was erroneous. 

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.13 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.14 Because fault is defined by what the 

claimant knew or should have known at the time of acceptance, one of the consequences of EFT 

is that the claimant lacks the requisite knowledge at the time of the first incorrect payment.15 

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.16 It is inappropriate, 

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.17

OWCP paid appellant compensation by EFT every 28 days. Appellant returned to work 

on November 3, 2014. On November 15, 2014 OWCP paid her compensation for the period 

October 19 through November 15, 2014. There is no documentation or other evidence to 

demonstrate that appellant had clear knowledge at the time the bank received the November 15, 

2014 direct deposit that a portion of the payment was incorrect.18 The Board thus finds that 

 

11 Id.

12 V.S., Docket No. 13-1278 (issued October 23, 2015).

13 See C.K., Docket No. 12-0746 (issued May 1, 2012).

14 Supra note 10.

15 Id.

16 Id.; see also K.D., Docket No. 13-0451 (issued April 12, 2013).

17 See V.S., supra note 12.

18 See M.M., Docket No. 15-0265 (issued May 27, 2015); 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).
6

appellant was without fault in accepting the initial direct deposit covering the period of the 

overpayment November 3 through 15, 2014.

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

recovery of the overpayment for the period November 3 to 15, 2014. The Board will set aside the 

July 19, 2016 decision regarding the issue of fault for this period and remand the case for OWCP 

to determine whether appellant is entitled to wavier of recovery of the overpayment covering the 

period November 3 to 15, 2014.

19

CONCLUSION

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

of compensation during the period November 3 to 15, 2014 in the amount of $966.94. The Board 

further finds that she was without fault for the period of the overpayment from November 3 

to 15, 2014. The case will be remanded for OWCP to consider waiver of recovery of the 

overpayment from November 3 to 15, 2014.20

 

19 The Board does not have jurisdiction to review the recovery of the overpayment as its jurisdiction is limited to

reviewing those cases where OWCP seeks recovery from continuing compensation under FECA. See 20 C.F.R. 

§ 10.441(a); Ronald E. Ogden, 56 ECAB 278 (2005).

20 Due to the disposition of this case, appellant’s arguments on appeal will not be addressed.
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ORDER

IT IS HEREBY ORDERED THAT the July 19, 2016 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 opinion of the Board.

Issued: April 4, 2018

Washington, DC

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Alec J. Koromilas, Alternate Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board