United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

H.H., Appellant 

and 

DEPARTMENT OF THE NAVY, 

CHARLESTON NAVAL SHIPYARD, 

Charleston, SC, Employer 

__________________________________________ 

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Docket No. 16-1063 

Issued: September 15, 2016 

Appearances: Case Submitted on the Record

Paul H. Felser, Esq., 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 April 25, 2016 appellant, through counsel, filed a timely appeal from a March 23, 

2016 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. 

 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

ISSUES 

The issues are: (1) whether appellant received an overpayment of compensation in the 

amount of $42,774.01 for the period January 1, 2001 through January 9, 2016 because OWCP 

failed to reduce his benefits by the Federal Employees Retirement System (FERS) offset amount; 

(2) whether he was at fault in creating the overpayment; and (3) whether OWCP properly 

determined that it would recover the overpayment by deducting $345.00 from continuing 

compensation payments. 

FACTUAL HISTORY 

On July 23, 1991 appellant, then a 52-year-old marine machinist, filed an occupational 

disease claim (Form CA-2) alleging that he sustained an avulsion fracture of his right foot 

causally related to factors of his federal employment. 

On August 22, 1991 OWCP accepted the claim for right hallux rigidus. In the acceptance 

letter, it advised that receiving wage-loss compensation and federal retirement benefits 

constituted a prohibited dual benefit. 

The employing establishment terminated appellant’s employment effective October 4, 

1991 as part of a reduction-in-force. OWCP paid him compensation for total disability 

beginning October 7, 1991. 

By decision dated January 17, 1996, OWCP reduced appellant’s wage-loss compensation 

effective February 4, 1996 based on its finding that he had the capacity to work as a computeraided design technician. 

Appellant signed a Form EN1032 on January 22, 2002 indicating that he received 

benefits from the Social Security Administration (SSA) as part of an annuity under FERS. He 

continued to submit CA-1032 forms dated 2003 to 2014 disclosing the receipt of benefits from 

SSA based at least in part on a FERS annuity. 

On January 22, 2004 OWCP noted that appellant advised that he was receiving regular 

retirement benefits and asked for information regarding his retirement program. On February 3, 

2004 appellant resubmitted his Form CA-1032 and noted that he received a regular retirement 

check from military service with the U.S. Coast Guard. 

In letters dated January 30 and October 31, 2012, the employing establishment advised 

OWCP that appellant was receiving SSA benefits and also retirement benefits under FERS. It 

questioned whether OWCP was deducting for the FERS offset. In a November 29, 2012 

response, OWCP notified the employing establishment that it was requesting information from 

SSA regarding whether an offset was necessary.3

 3

 By decision dated July 22, 2014, OWCP found that appellant received an overpayment of compensation in the 

amount of $435.50 because he received augmented compensation from March 2 through May 31, 2014 when he had 

no dependents. It further found that he was at fault in the creation of the overpayment. 
3

The employing establishment, on September 2, 2015, informed OWCP that appellant was 

employed under the FERS retirement system and disclosed on his CA-1032 form dated 

January 29, 2015 that he was receiving SSA benefits. It advised that he turned 66 years old on 

December 24, 2004, at which point his benefits changed from disability benefits to retirement 

benefits based on age. The employing establishment requested that OWCP determine the 

amount that should be offset from his compensation. 

On December 17, 2015 SSA notified OWCP of appellant’s SSA rate with and without 

FERS from January 2001 to December 2015. Including federal employment, he was entitled to a 

rate of $974.80 effective January 2001 and July 2001, $1,000.10 effective December 2001, 

$1,014.00 effective December 2002, $1,1035.20 effective December 2003, $1,063.20 effective 

December 2004, $1,106.70 effective December 2005, $1,143.20 effective December 2006, 

$1,169.40 effective December 2007, $1,237.20 effective December 2008, December 2009, and 

December 2010, $1,281.70 effective December 2011, $1,303.40 effective December 2012, 

$1,322.90 effective December 2013, and $1,1345.40 effective December 2014 and 

December 2015. Without counting appellant’s federal earnings, he was entitled to a rate of 

$777.30 effective January 2001 and July 2001, $797.50 effective December 2001, $808.60 

effective December 2002, $825.50 effective December 2003, $847.80 effective December 2004, 

$882.50 effective December 2005, $911.60 effective December 2006, $932.50 effective 

December 2007, $986.50 effective December 2008, December 2009, and December 2010, 

$1,022.00 effective December 2011, $1,039.40 effective December 2012, $1,054.90 effective 

December 2013, and $1,072.80 effective December 2014 and December 2015. 

Beginning January 10, 2016 OWCP adjusted appellant’s compensation to offset the 

portion of his SSA retirement benefits attributable to his federal service. 

OWCP calculated that appellant received an overpayment of compensation by 

determining the difference between his SSA amount with and without FERS for each period. It 

multiplied the daily offset amount by the number of days in each period to find a total 

overpayment of compensation in the amount of $42,774.01. 

On February 2, 2016 OWCP notified appellant of its preliminary determination that he 

received an overpayment of $42,774.01 as it paid him wage-loss compensation benefits for the 

period January 1, 2001 through January 9, 2016 that were not reduced by the portion of the SSA 

benefits that he earned based on his federal service. It found that he began receiving regular 

retirement benefits under SSA on January 1, 2001 and that the portion of the SSA benefits he 

received due to his federal service was part of his FERS retirement package and thus prohibited. 

It further informed appellant of its preliminary determination that he was at fault in creating the 

overpayment as he should have known that the portion of his retirement based on his federal 

service constituted a dual benefit. OWCP noted that the August 22, 1991 acceptance letter 

informed him that federal retirement benefits and compensation constituted a dual benefit. It 

further found that appellant reported annually on CA-1032 forms that he received SSA benefits 

due in part to federal service but continued to accept the payments from both SSA and OWCP 

that he should have known were incorrect. OWCP requested that he complete the enclosed 

overpayment recovery questionnaire and submit supporting financial documents. Additionally, it 

notified appellant that, within 30 days of the date of the letter, he could request a telephone 
4

conference, a final decision based on the written evidence or a prerecoupment hearing. 

Appellant did not respond within the time allotted. 

In a decision dated March 23, 2016, OWCP determined that appellant received an 

overpayment of compensation in the amount of $42,774.01 for the period January 1, 2001 

through January 9, 2016 as it failed to offset from his compensation the portion of his SSA 

benefits based on his FERS service. It further found that he was at fault in the creation of the 

overpayment and thus not entitled to waiver of recovery of the overpayment. OWCP determined 

that it would recover the overpayment by deducting $345.00 from his continuing compensation 

payments. 

On appeal appellant, through counsel, challenges the overpayment. 

LEGAL PRECEDENT -- ISSUE 1 

Section 8102 of FECA provides that the United States shall pay compensation for the 

disability of an employee resulting from personal injury sustained while in the performance of 

duty.4

 Section 8129(a) of FECA provides that, in pertinent part, when an overpayment has been 

made to an individual under this subchapter 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 an individual is entitled.5

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

of SSA benefits based on age or death that are attributable to federal service and that, if an 

employee received SSA benefits based on federal service, his compensation benefits shall be 

reduced by the amount of SSA benefits attributable to his or her federal service.6

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 

the SSA benefits paid on the basis of age and attributable to the employee’s federal service.7 The 

offset of FECA benefits by SSA benefits attributable to employment under FERS is calculated as 

follows: Where a claimant had received SSA benefit, OWCP will obtain information from SSA 

on the amount of the claimant’s SSA benefits beginning with the date of eligibility to FECA 

benefits. SSA will provide the actual amount of SSA benefits received by the claimant/ 

beneficiary. It 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 

 4

 5 U.S.C. § 8102. 

5 Id. at § 8129(a). 

6 Id. at § 8116(d); see also Janet K. George (Angelos George), 54 ECAB 201 (2002). 

7

 Federal (FECA) Procedure Manual, Part 2 -- Claims, Dual Benefits, Chapter 2.1000.4(3) (January 1997); 

Chapter 2.1000.11(a)(b) (February 1995). 
5

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.8

ANALYSIS -- ISSUE 1 

Appellant received wage-loss compensation under FECA and SSA benefits concurrently 

from January 1, 2001 through January 9, 2016. As noted, the portion of the SSA benefits he 

earned as part of his FERS retirement package and the receipt of benefits under FECA 

concurrently constituted a prohibited dual benefit.9

 Appellant, consequently, received an 

overpayment of compensation. 

SSA provided appellant’s SSA rate with FERS and his hypothetical SSA rate without 

FERS. The difference between the amounts must be deduced from FECA benefits. Based on the 

information provided by SSA, OWCP determined that he received an overpayment of 

compensation in the amount of $42,774.01 for the period January 1, 2001 through 

January 9, 2016. 

On appeal appellant, through counsel, generally challenges the overpayment but raises no 

specific argument. The Board finds that the evidence of record supports that appellant received a 

$42,774.01 overpayment of compensation for the period January 1, 2001 through 

January 9, 2016. 

LEGAL PRECEDENT -- ISSUE 2 

Under OWCP regulations, waiver of the recovery of an overpayment may be considered 

only if the individual to whom it was made was not at fault in accepting or creating the 

overpayment.10 The fact that the overpayment was the result of error by OWCP or another 

government agency does not by itself relieve the individual who received the overpayment of 

liability for repayment if the individual also was at fault for receiving the overpayment.11 Each 

recipient of compensation benefits is responsible for taking all reasonable measures to ensure 

that payments he or she received from OWCP are proper. The recipient must show good faith 

and exercise a high degree of care in reporting events that may affect entitlement to or the 

amount of benefits. A recipient who has done any of the following will be found to be at fault 

with respect to creating an overpayment: (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 to be incorrect (this provision applies only to the overpaid 

individual).12 

 8 See L.B., Docket No. 11-2076 (issued August 29, 2012). 

9

 5 U.S.C. § 8116(d); see also B.M., Docket No. 15-0273 (issued June 26, 2015). 

10 20 C.F.R. § 10.433(a). 

11 Id. at § 10.435(a). 

12 Id. at § 433(a); see Kenneth E. Rush, 51 ECAB 116 (1999). 
6

ANALYSIS -- ISSUE 2 

OWCP determined that appellant was at fault in creating the overpayment as he accepted 

a payment that he knew or should have known was incorrect. It must thus establish that, at the 

time he received the compensation in question, he knew or should have known that the payment 

was incorrect.13 OWCP based its fault finding on its 1991 acceptance letter informing him that 

the receipt of disability compensation and federal retirement benefits was a prohibited dual 

benefit. The acceptance letter, however, was sent to appellant 10 years before the overpayment 

occurred. OWCP has not sufficiently explained how this put him on notice that he was accepting 

incorrect payments of compensation beginning January 1, 2001. Appellant disclosed his receipt 

of FERS benefits based in part on federal service on annual CA-1032 forms, but the forms did 

not advise that the receipt of that portion of retirement constitutes a prohibited dual benefit. 

OWCP’s procedures provide, “In general, if the evidence shows either a lack of good 

faith or failure to exercise a reasonable degree of care in reporting changes in circumstances that 

may affect entitlement or the amount of benefits, an individual will be found with fault.”14 The 

Board finds that, under the circumstances, the evidence is insufficient to establish that he knew 

or should have known that he received incorrect payments from January 1, 2001 through 

January 9, 2016. Consequently, the case will be remanded to OWCP to consider whether the 

overpayment created for this period should be waived.15 

CONCLUSION 

The Board finds that appellant received an overpayment of compensation in the amount 

of $42,774.01 for the period January 1, 2001 through January 9, 2016 because OWCP failed to 

reduce his benefits by the FERS offset amount. The Board further finds that he was not at fault 

for the creation of the overpayment and that, consequently, the case will be remanded to OWCP 

to consider waiver of recovery of the overpayment. 

 13 See A.L., Docket No. 09-1529 (issued January 13, 2010); Robin O. Porter, 40 ECAB 421 (1989). 

14 Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 6.200.5 

(June 2009). 

15 In view of the Board’s finding that the case must be remanded for OWCP to consider waiver of recovery of the 

overpayment, it is premature to address recovery of the overpayment from continuing compensation payments. 
7

ORDER 

IT IS HEREBY ORDERED THAT the March 23, 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 decision of the Board. 

Issued: September 15, 2016 

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