United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

M.H., Appellant 

and 

DEPARTMENT OF THE AIR FORCE, 

LACKLAND AIR FORCE BASE, TX, Employer 

__________________________________________ 

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Docket No. 17-0766 

Issued: July 3, 2017 

Appearances: Case Submitted on the Record

Dr. Anthony Rogers, for the appellant1

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

PATRICIA H. FITZGERALD, Deputy Chief Judge 

VALERIE D. EVANS-HARRELL, Alternate Judge 

JURISDICTION 

On February 22, 2017 appellant, through his representative, filed a timely appeal from a 

February 6, 2017 merit decision of the Office of Workers’ Compensation Programs (OWCP). 

Pursuant to the Federal Employees’ Compensation Act2

 (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 an overpayment of compensation in the 

amount $2,684.39 for the period June 20, 2015 through September 17, 2016 because he was 

compensated at the wrong pay rate; (2) whether OWCP properly denied waiver of recovery of 

 1

 In all cases in which a representative has been authorized in a matter before the Board, no claim for a fee for 

legal or other service performed on appeal before the Board is valid unless approved by the Board. 20 C.F.R. 

§ 501.9(e). No contract for a stipulated fee or on a contingent fee basis will be approved by the Board. Id. An 

attorney or representative’s collection of a fee without the Board’s approval may constitute a misdemeanor, subject 

to fine or imprisonment for up to one year or both. Id.; see also 18 U.S.C. § 292. Demands for payment of fees to a 

representative, prior to approval by the Board, may be reported to appropriate authorities for investigation. 

2

 5 U.S.C. § 8101 et seq. 
2

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

deducting $81.82 every 28 days from appellant’s continuing compensation. 

On appeal appellant generally asserts that he disagrees with the overpayment 

determination. 

FACTUAL HISTORY 

On August 4, 2014 appellant, then a 62-year-old security guard, filed a traumatic injury 

claim (Form CA-1), alleging that he injured his left thigh, back, neck, and right shoulder when he 

tripped over a curb and fell at work on July 30, 2014. He stopped work that day and began 

receiving continuation of pay. A Notification of Personnel Action (Form SF-50) indicated that, 

effective January 12, 2014, appellant’s annual pay rate was $37,957.00. Appellant returned to 

modified-duty work for four hours daily on December 4, 2014. On January 27, 2015 he began 

working six hours of modified-duty work daily. 

OWCP accepted the conditions of sprain of right shoulder and upper arm, rotator cuff, 

unspecified sprain of right shoulder and upper arm, sprain of neck, lumbar sprain, and bilateral 

knee contusions. 

A pay rate memorandum dated March 10, 2015 noted that, based on the date-of-injury 

(July 30, 2014) pay rate, appellant’s weekly pay rate for compensation purposes was $729.94. 

He received wage-loss compensation at the 2/3 rate from December 1, 2014 to January 23, 2015 

for partial days.3 

Appellant stopped work on June 10, 2015 when Dr. Francisco Garcia, a Board-certified 

orthopedic surgeon, performed right shoulder arthroscopic surgery with rotator cuff repair and 

subacromial decompression. 

A Form SF-50, Notification of Personnel Action, indicated that, effective June 19, 2015, 

appellant’s employment was terminated because his appointment term had ended. At that time 

his annual pay rate was $39,400.00. Appellant filed claims for compensation (Form CA-7) for 

wage loss beginning June 20, 2015. 

OWCP paid appellant wage-loss compensation beginning June 20, 2015 based on a date 

of recurrence of June 10, 2015 pay rate.4

 A pay rate memorandum indicated that appellant’s 

weekly pay rate of $795.49 included base pay of $757.69 plus weekly night differential of 

 3

 There is no indication in the record that appellant received compensation from the date his continuation of pay 

expired until December 1, 2014, and no evidence that he received compensation after January 23, 2015 when he was 

working six hours daily. 

4

 The record indicates that appellant used leave for the period June 10 through 14, 2015. 
3

$37.80. Appellant was placed on the periodic compensation rolls, effective September 20, 2015, 

based on this pay rate.5 

On November 4, 2016 OWCP issued a preliminary determination that appellant received 

a $2,684.39 overpayment of compensation for the period June 20, 2015 through 

September 17, 2016 for which he was without fault. It explained that the overpayment was 

created because appellant was paid compensation based on a date-of-recurrence pay rate when he 

should have been paid compensation based on the date-of-injury rate. OWCP noted that there 

was insufficient evidence to support that appellant qualified for a recurrent pay rate because there 

was no evidence to support that he had returned to regular employment and worked more than 

six months before stopping again on June 10, 2015. Appellant was provided an overpayment 

action request form and an overpayment recovery questionnaire (OWCP-20). He was asked to 

attach supporting documentation including copies of income tax returns, bank account 

statements, bills, cancelled checks, pay slips, and any other record which supported the income 

and expenses listed. OWCP also informed him of the various appeal actions he could take. 

Appellant was afforded 30 days to respond. An overpayment worksheet and computer print-outs 

were attached. 

Appellant timely requested a telephone hearing. He submitted a completed overpayment 

questionnaire which listed monthly expenses of $1,413.59 and monthly income from social 

security benefits of $1,870.00, with assets from checking, savings, stocks, and bonds totaling 

$120,754.00. 

A telephone hearing was held on February 6, 2017. The claims examiner explained that 

there was no evidence of record that appellant had returned to regular employment and, thus, he 

was not entitled to a recurrent pay rate. He noted that appellant was not at fault and, while this 

entitled OWCP to consideration of waiver, it did not automatically qualify appellant for waiver. 

The claims examiner concluded that, after his review of the completed overpayment recovery 

questionnaire, appellant did not meet the two-prong test to establish waiver. 

By decision dated February 6, 2017, OWCP finalized the preliminary determination that 

appellant was not at fault in the creation of an overpayment of compensation in the amount of 

$2,684.39 for the period June 20, 2015 through September 17, 2016. It noted that in addition to 

$1,870.00 per month in social security benefits, appellant also received net FECA compensation 

of $1,636.42 every 28 days, and that his monthly expenses totaled $1,413.59. OWCP further 

noted that his assets totaled $120,754.00. It concluded that because appellant’s monthly income 

exceeded his monthly expenses significantly and his resource base exceeded $4,800.00, there 

was no evidence that collection of the overpayment would defeat the purpose of FECA and also 

no evidence to establish that collection would be against equity and good conscience. Appellant, 

thus, was not entitled to waiver of recovery of the overpayment. The overpayment was to be 

repaid by deductions of $81.82 each compensation period. 

 5

 On October 19, 2016 Dr. Garcia requested authorization for right shoulder joint reconstruction. In a letter dated 

October 21, 2016, OWCP informed appellant that it was unable to authorize the requested surgery because there was 

no medical evidence of record to support the request. Appellant appealed the October 21, 2016 letter to the Board 

on January 3, 2017. The Board assigned Docket No. 17-0499 to that appeal, which will be adjudicated separately. 
4

LEGAL PRECEDENT -- ISSUE 1 

Section 8101(4) of FECA defines “monthly pay” for purposes of computing 

compensation benefits as follows: the monthly pay at the time of injury, or the monthly pay at 

the time disability begins, or the monthly pay at the time compensable disability recurs, if the 

recurrence begins more than six months after the injured employee resumes regular full-time 

employment with the United States, whichever is greater.6 In an occupational disease claim, the 

date of injury is the date of last exposure to the employment factors which caused or aggravated 

the claimed condition.7 

ANALYSIS -- ISSUE 1 

The Board finds that an overpayment of compensation in the amount of $2,684.39 was 

created for the period June 20, 2015 through September 17, 2016 because appellant was paid 

compensation based on an incorrect date-of-recurrence pay rate when he should have been paid 

compensation based on the date-of-injury rate. 

As noted, only if an employee returns to regular full-time employment for a period of six 

months before the recurrence occurs, is the employee entitled to a recurrent pay rate.8

In this case, appellant sustained a traumatic injury on July 30, 2014. He stopped work 

that day, and did not return until December 4, 2014 when he began four hours daily of modifiedduty work. Appellant increased his hours of modified duty to six hours daily on January 27, 

2015, stopped work on June 10, 2015 for shoulder surgery, and did not return. While he had 

worked six months between December 4, 2014 and his work stoppage on June 10, 2015, 

appellant had not worked the requisite full-time regular duty which would entitle him to a 

recurrent pay rate.9

The record supports that OWCP paid appellant wage-loss compensation beginning 

June 20, 2015 based on a June 10, 2015 date of recurrence. It continued periodic rolls 

compensation payments based on this recurrent pay rate through September 17, 2016, based, 

which totaled $29,352.50 when he should have been paid at the date-of-injury pay rate of 

$729.94 per week, for a total of $26,668.11. Therefore, OWCP properly found that appellant 

received an overpayment of compensation in the amount of $2,684.39. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8129 of FECA provides that an overpayment of compensation shall be recovered 

by OWCP unless the “incorrect payment has been made to an individual who is without fault and 

 6

 5 U.S.C. § 8101(4); see Dale Mackelprang, 57 ECAB 168 (2005). 

7 C.M., Docket No. 08-1119 (issued May 13, 2009). 

8 Supra note 6. 

9 Id.; see J.R., Docket No. 14-1728 (issued June 17, 2015) (appellant is not entitled to a recurrent pay rate as the 

record demonstrated that all of the positions appellant held following his injury were modified duty, not full-time 

regular duty). 
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when adjustment or recovery would defeat the purpose of FECA or would be against equity and 

good conscience.”10 Section 10.438 of OWCP regulations provides that 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. 

Failure to submit the requested information within 30 days of the request shall result in denial of 

waiver.11 

The guidelines for determining whether recovery of an overpayment would defeat the 

purpose of FECA or would be against equity and good conscience are set forth in sections 

10.434 to 10.437 of OWCP regulations.12

Section 10.436 provides that 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 current 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.13 For waiver under 

the defeat the purpose of FECA standard, appellant must show that he or she needs substantially 

all of his or her current income to meet current ordinary and necessary living expenses, and that 

assets do not exceed the resource base.14 OWCP procedures provide that the 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.15

An individual’s liquid assets include, but are not limited to cash, the value of stocks, 

bonds, saving accounts, mutual funds, and certificate of deposits. Nonliquid assets include, but 

are not limited to, the fair market value of an owner’s equity in property such as a camper, boat, 

second home, and furnishings/supplies.16 

ANALYSIS -- ISSUE 2 

As OWCP found appellant without fault in the creation of the overpayment, waiver must 

be considered and repayment is still required unless adjustment or recovery of the overpayment 

would defeat the purpose of FECA or be against equity and good conscience.17 The Board finds 

that OWCP properly denied waiver of recovery of the overpayment of compensation. 

 10 5 U.S.C. § 8129. 

11 20 C.F.R. § 10.438. 

12 5 U.S.C. § 10.434-10.437. 

13 Id. at § 10.436. 

14 Id. 

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

6.200.6.a (June 2009). 

16 Id. 

17 Supra note 15. 
6

Appellant has not established that recovery of the overpayment would defeat the purpose 

of FECA because his asset base exceeds the resource base of $4,800.00, as provided in OWCP 

procedures.18 On the completed overpayment recovery questionnaire, appellant noted having 

checking accounts, savings accounts, stocks, and bonds totaling $120,764.00. This exceeds the 

$4,800.00 asset base for an individual, such as appellant, who has no dependents.19 Because 

appellant has not met the second prong of the two-prong test of whether recovery of the 

overpayment would defeat the purpose of FECA, it is not necessary to consider the first prong of 

the test, i.e., whether his monthly income exceeded his monthly ordinary and necessary expenses 

by more than $50.00.20 

Recovery of an overpayment is also 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 or her position for the worse.21 OWCP 

procedures provide that 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.22 Donations to charitable 

causes or gratuitous transfers of funds to other individuals are not considered relinquishments of 

valuable rights.23 The individual must show that he made a decision he otherwise would not 

have made in reliance on the overpaid amount and that this decision resulted in a loss.24 

Appellant submitted no evidence to show that he gave up a valuable right or changed his 

position for the worse in reliance on anticipated compensation payments. Thus, he has not 

shown that, if required to repay the overpayment, he would be in a worse position after 

repayment than if he had never received the overpayment at all. OWCP properly found that he 

was not entitled to waiver on the grounds that recovery would be against equity and good 

conscience.25 

LEGAL PRECEDENT -- ISSUE 3 

OWCP’s implementing regulations provide that, if an overpayment of compensation has 

been made to an individual entitled to further payments and no refund is made, it shall decrease 

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

 18 Id.

19 Id. 

20 Supra note 7. 

21 20 C.F.R. 10.437; see W.P., 59 ECAB 514 (2008). 

22 Federal (FECA) Procedure Manual, supra note 15 at Chapter 2.600.b(3) (June 2009). 

23 20 C.F.R. § 10.437(b)(1) (2011); see J.A., Docket No. 09-1678 (issued June 9, 2010). 

24 Id. at § 10.437(b)(2) (2011); see Wayne G. Rogers, 54 ECAB 482 (2003). 

25 Federal (FECA) Procedure Manual, supra note 15. 
7

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

factors, so as to minimize any hardship.26

ANALYSIS -- ISSUE 3 

The record supports that, in requiring recovery of the $2,684.39 overpayment of 

compensation by deducting $81.82 from appellant’s compensation payments every four weeks, 

OWCP took into consideration the financial information submitted by appellant as well as the 

factors set forth in section 10.441(a) of its regulations and found that this method of recovery 

would minimize any resulting hardship on appellant. Therefore, OWCP properly required 

recovery of the overpayment by deducting $81.82 from appellant’s compensation payments 

every four weeks.27 

 26 20 C.F.R. § 10.441(a). 

27 Id.; see C.P., Docket No. 13-1341 (issued January 6, 2014). 
8

CONCLUSION 

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

of compensation in the amount of $2,684.39, and that OWCP properly denied waiver of recovery 

and required recovery of the overpayment by deducting $81.82 every 28 days from his 

continuing FECA compensation payments. 

ORDER 

IT IS HEREBY ORDERED THAT the February 6, 2017 decision of the Office of 

Workers’ Compensation Programs is affirmed. 

Issued: July 3, 2017 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Valerie D. Evans-Harrell, Alternate Judge 

 Employees’ Compensation Appeals Board