United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

J.J., Appellant 

and 

DEPARTMENT OF DEFENSE, MISSILE 

DEFENSE AGENCY, Fort Belvoir, VA, 

Employer 

__________________________________________ 

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Docket No. 14-1649 

Issued: November 24, 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 

JAMES A. HAYNES, Alternate Judge 

JURISDICTION 

On July 22, 2014 appellant filed a timely appeal from May 8 and June 18, 2014 merit 

decisions 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.2

ISSUES 

The issues are: (1) whether OWCP properly found that an overpayment of compensation 

in the amount of $16,606.33 had been created as appellant received compensation for the period 

June 20 to August 25, 2012 after he returned to work, and that an overpayment in compensation 

 1

 5 U.S.C. § 8101 et seq. 

2

 The Board notes that appellant has submitted new evidence on appeal to the Board. However, the Board may 

only review evidence that was in the record at the time OWCP issued its final decision. See 20 C.F.R. § 501.2(c)(1); 

M.B., Docket No. 09-176 (issued September 23, 2009); J.T., 59 ECAB 293 (2008); G.G., 58 ECAB 389 (2007); 

Donald R. Gervasi, 57 ECAB 281 (2005); Rosemary A. Kayes, 54 ECAB 373 (2003). 
2

in the amount of $1,322.60 had been created as appellant received compensation for the period 

March 3 to 8, 2014 while receiving pay for work and personal leave; (2) whether OWCP 

properly denied waiver of the recovery of the overpayments in the amounts of $2,726.41 for the 

period June 20 to 30, 2012 and $1,322.60 for the period March 3 to 8, 2014; and (3) whether 

OWCP properly found that appellant was at fault in the creation of the overpayment in the 

amount of $13,879.92 for the period July 1 to August 25, 2012 and, therefore, ineligible for 

waiver of the recovery. 

On appeal appellant contends that collection of the debt would be against equity and good 

conscience. 

FACTUAL HISTORY 

This case has previously been before the Board. On May 7, 2010 appellant, then a 43-

year-old auditor, alleged that on October 11, 2009 while he was in Iraq and performing physical 

fitness he felt a pop in his back and his left arm went numb immediately. OWCP accepted the 

claim for upper infraspinatus arm and shoulder sprain, neck sprain, and C5-6, C6-7 herniated 

discs (left foraminal) large with left C7 cervical radiculopathy and placed appellant on the 

periodic rolls for temporary total disability effective July 5, 2011. It authorized cervical surgery, 

which was performed on July 27, 2011. Appellant returned to full-duty modified work on 

June 20, 2012. On April 8, 2014 the Board affirmed a March 13, 2013 OWCP nonmerit decision 

denying his request for a prerecoupment hearing on an overpayment of compensation in the 

amount of $16,606.33 for the period June 20 through August 25, 2012 as being untimely filed.3

 

The facts and the circumstances of the Board’s prior decisions are incorporated herein by 

reference. The relevant overpayment evidence from the prior decision is set forth below. 

Appellant completed direct deposit election forms on September 21 and October 19, 2011 

and the record reflects that his compensation payments were directly deposited into his bank 

account. 

On May 12, 2013 OWCP informed appellant of its preliminary determination that he 

received an overpayment of compensation in the amount of $16,606.33, because he had been 

paid in error for the period June 20 through August 25, 2012.4

 It noted that he returned to work 

on June 20, 2012 with no loss of wages, but continued to receive compensation for total 

disability. OWCP found appellant was without fault in the creation of the overpayment in the 

amount of $2,726.41 for the period June 20 to 30, 2012, but was at fault in the creation of the 

remaining amount of $13,879.92, for the period July 1 to August 25, 2012, because he accepted 

payments he knew or should have known were incorrect. It requested that appellant complete 

the enclosed overpayment recovery questionnaire and submit supporting financial documents. 

Additionally, OWCP notified him that, within 30 days of the date of the letter, he could request a 

 3

 Docket No. 13-1905 (issued April 8, 2014). 

4

 The record contains a computer printout showing compensation payments for the period June 19, 2011 through 

August 25, 2012, a May 15, 2013 pay rate memorandum and an amended computer printout with appellant’s 

corrected pay rate showing compensation payments for the period June 19, 2011 through August 25, 2012. 
3

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

hearing. No completed overpayment recovery form was submitted by appellant. 

On July 19, 2013 OWCP authorized right shoulder surgery, which occurred on 

July 10, 2013. 

On August 14, 2013 OWCP placed appellant on the periodic rolls for temporary total 

disability effective July 10, 2013. 

On February 27, 2014 Dr. Spero Karas, appellant’s treating Board-certified orthopedic 

surgeon, released appellant to return to full-duty work on March 4, 2014. 

In a March 6, 2014 letter, the employing establishment informed OWCP that appellant 

requested leave for March 3, 2014 and returned to work on March 4, 2014. 

On March 13, 2014 OWCP informed appellant of its preliminary determination that he 

received an overpayment of compensation in the amount of $1,322.60 because he had received 

compensation for the period March 3 to 8, 2014 while receiving pay for work and personal leave. 

It found that he was without fault in the creation of the overpayment as he could not reasonably 

have been aware that his single compensation payment made by direct deposit was incorrect. 

OWCP requested that appellant complete the enclosed overpayment recovery questionnaire and 

submit supporting financial documents. Additionally, it notified him that, within 30 days of the 

date of the letter, he could request a telephone conference, a final decision based on the written 

evidence, or a prerecoupment hearing. No completed overpayment recovery form was received 

by OWCP. 

By decision dated May 8, 2014, OWCP finalized the preliminary determination that an 

overpayment of compensation in the amount of $1,322.60 had been created during the period 

March 3 to 8, 2014. It denied waiver of recovery of the overpayment as appellant had not 

submitted any evidence to justify waiver. 

By decision dated June 18, 2014, OWCP finalized the preliminary determination that an 

overpayment in the amount of $16,606.33 was created because appellant was paid compensation 

through August 25, 2012 after returning to work with no loss of wages on June 20, 2012. It 

found him without fault for a portion of the overpayment, in the amount of $2,726.41 for the 

period June 20 through 30, 2012, as he could not have been aware on June 30, 2012 that the 

initial direct deposit was incorrect. OWCP found appellant with fault for the remaining portion 

of the overpayment, in the amount of $13,879.92 for the period July 1 through August 25, 2012, 

as he knew or should reasonably have known that the payments he received were incorrect. 

With regard to the first portion of the overpayment in the amount of $2,276.41 for the period 

June 20 through 30, 2012, it denied waiver of recovery as he did not submit supporting evidence. 

With regard to the remaining portion of the overpayment, $13,879.92 for the period July 1 

through August 25, 2012, OWCP’s finding of fault precluded waiver of recovery. 
4

LEGAL PRECEDENT -- ISSUE 1 

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.5

 Section 10.500 of Title 20 of the Code of Federal 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. 

ANALYSIS -- ISSUE 1 

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

of $16,606.33 because he was paid compensation in error for the period June 20 through 

August 25, 2012. Appellant returned to full-time work on June 20, 2012, but continued to 

receive compensation for partial disability from OWCP through August 25, 2012. As he 

received regular full-time wages from the employing establishment from June 20 to August 25, 

2012, he was not entitled to disability compensation from OWCP for this same period. OWCP 

determined that the amount of compensation that appellant received for the period totaled 

$16,606.33. Appellant has not challenged the amount and period of the overpayment. 

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

amount of $1,322.60 which was created because he received compensation for the period 

March 3 to 8, 2014 while receiving pay for work and personal leave. Appellant was released to 

return to full-time work by his treating physician on March 3, 2014. He took personal leave for 

March 3, 2014 and returned to work on March 4, 2014, but continued to receive compensation 

for total disability from OWCP through March 8, 2014. As appellant received pay for work and 

personal leave from the employing establishment from March 3 to 8, 2014, he was not entitled to 

disability compensation from OWCP for this same period. OWCP determined that the amount 

of compensation that he received for the period totaled $1,322.60. Appellant has not challenged 

the amount and period of the overpayment. 

LEGAL PRECEDENT -- ISSUE 2 

According to section 10.436,6

 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 

 5

 5 U.S.C. § 8116(a). 

6

 20 C.F.R. § 10.436. 
5

determined by OWCP from data provided by the Bureau of Labor Statistics.7 For waiver under 

this standard, appellant must meet the two-pronged test and show that he both needs substantially 

all of his current income to meet current ordinary and necessary living expenses,8

 and that his 

assets do not exceed the resource base.9

The burden is on the claimant to show that the expenses are reasonable and needed for a 

legitimate purpose.10 OWCP’s 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 [FECA] or be against equity and good conscience.... 

“(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.”11

ANALYSIS -- ISSUE 2 

OWCP determined that appellant was without fault in the creation of the overpayment of 

$2,726.41 for the period June 20 through 30, 2012, and without fault in the creation of the 

overpayment in the amount of $1,322.60 for the period March 3 to 8, 2014 because he received 

his wage-loss compensation payments by direct deposit. 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.12 All the amounts noted above 

were appellant’s first compensation payments received by direct deposit, OWCP properly found 

he was without fault in the creation of overpayment in the amount of $2,726.41 for the period 

June 20 through 30, 2012 and an overpayment in the amount of $1,322.60 for the period March 3 

to 8, 2014. 

 7

 OWCP procedures provide that 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. Federal 

(FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 6.200.6(a) 

(October 2004). 

8

 An individual is deemed to need substantially all of his or her income to meet current ordinary and necessary 

living expenses if monthly income does not exceed monthly expenses by more than $50.00. Desiderio Martinez, 55 

ECAB 245, 250 (2004). 

9 See supra note 8. W.F., 57 ECAB 705, 708 (2006). 

10 Id. 

11 20 C.F.R. § 10.438. See Madelyn Y. Grant, 57 ECAB 533 (2006).

12 See Tammy Craven, 57 ECAB 689 (2006), granting petition for recon. & reaffirming prior Board decision, 

Docket No. 05-249 (issued July 24, 2006). 
6

OWCP requested in its preliminary notices of overpayment dated May 17, 2013 and 

March 13, 2014 that appellant provide financial information and a completed overpayment 

recovery questionnaire to support waiver of recovery. Appellant, however, failed to provide any 

financial information or a completed overpayment questionnaire for OWCP to determine 

whether waiver was appropriate. The burden is on the claimant to show that waiver would 

defeat the purpose of FECA. Appellant has not alleged and the evidence does not demonstrate 

that he relinquished a valuable right or changed his position for the worse due to the payment of 

the erroneous amount of compensation. Because he has not shown that recovery would defeat 

the purpose of FECA or would be against equity and good conscience, the Board finds that 

OWCP properly denied waiver of recovery of the overpayment. 

On appeal appellant argues that collection of the overpayment would be against equity 

and good conscience based on his current financial status. The regulations mandate that the 

failure to submit requested information results in the denial of waiver of the overpayment.13 

Appellant failed to provide OWCP with a completed overpayment recovery questionnaire form 

as requested. Thus, OWCP properly denied his request for waiver of recovery of the 

overpayments. 

LEGAL PRECEDENT -- ISSUE 3 

Section 8129(b) of FECA14 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.15

OWCP may consider waiving an overpayment of compensation only if the individual to 

whom it was made was not at fault in accepting or creating the overpayment. 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, which 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).16

 13 Id. 

14 5 U.S.C. § 8129(b). 

15 J.K., Docket No. 08-1761 (issued January 8, 2009); Joan Ross, 57 ECAB 694 (2006); Desiderio Martinez, 

supra note 8. 

16 20 C.F.R. § 10.433(a), 
7

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

ANALYSIS -- ISSUE 3 

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

compensation in the amount of $13,879.92 for the period July 1 to August 25, 2012 because he 

accepted payments that he knew or should have known to be incorrect. 

Even where 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.18 In cases involving a series of incorrect payments, where the requisite knowledge is 

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.19 By the time of 

the second erroneous direct deposit compensation payment dated July 1, 2012, appellant knew or 

should have known that he was no longer entitled to compensation. Accordingly, the Board will 

affirm the finding of fault for the period July 1 to August 25, 2012. 

CONCLUSION 

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

of $16,606.33 for the period June 20 through August 25, 2012 because he received compensation 

from OWCP after he had returned to work, and that he also received an overpayment of 

compensation in the amount of $1,322.60 for the period March 3 to 8, 2014, because he received 

personal leave and pay for actual work concurrently with OWCP wage-loss compensation. The 

Board further finds that OWCP properly determined that appellant was without fault in the 

creation of an overpayment of compensation in the amount of $2,726.41 for the period June 20 

through 30, 2012 and in the amount of $1,322.60 for the period March 3 to 8, 2014 because 

appellant received these initial wage-loss compensation payments by direct deposit. The Board 

also finds that OWCP properly denied waiver of recovery for these overpayments. Lastly, the 

Board finds that OWCP properly determined that appellant was at fault in the creation of the 

overpayment in the amount of $13,879.92 for the period July 1 to August 25, 2012 because he 

accepted payments he knew or should have known to be incorrect, thereby precluding waiver of 

recovery of the overpayment. 

 17 Id. at § 10.433(b). 

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

19 See J.W., Docket No. 10-1271 (issued February 3, 2011); see also Karen Dixon, 56 ECAB 145 (2004). 
8

ORDER 

IT IS HEREBY ORDERED THAT the decisions of the Office of Workers’ 

Compensation Programs dated June 18 and May 8, 2014 are affirmed.20

Issued: November 24, 2015 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 20 James A. Haynes, Alternate Judge, participated in the original decision but was no longer a member of the 

Board effective November 16, 2015.