United States Department of Labor

Employees’ Compensation Appeals Board

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J.N., Appellant

and

DEPARTMENT OF THE ARMY, MEDICAL 

COMMAND, Fort Sam Houston, TX, Employer

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Docket No. 17-1043

Issued: November 28, 2017

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

COLLEEN DUFFY KIKO, Judge

ALEC J. KOROMILAS, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On April 12, 2017 appellant filed a timely appeal from a January 18, 2017 merit 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 this case.

ISSUES

The issues are: (1) whether OWCP properly determined that appellant received an 

overpayment of compensation in the amount of $25,000.00 due to receipt of a voluntary 

separation incentive payment (VSIP); (2) whether OWCP properly found that appellant was at 

fault in the creation of the overpayment and therefore not entitled to waiver of the recovery; and 

(3) whether OWCP properly determined that it would recover the overpayment by deducting 

$150.00 from appellant’s continuing compensation payments.

 

1

5 U.S.C. § 8101 et seq.
2

FACTUAL HISTORY

On September 3, 2014 appellant, then a 58-year-old training technician, filed an 

occupational disease claim (Form CA-2) alleging carpal tunnel syndrome and cervical disc 

displacement due to factors of her employment. She did not initially stop work. On 

September 22, 2014 OWCP accepted appellant’s claim for bilateral carpal tunnel syndrome and 

displacement of the cervical intervertebral disc without myelopathy. Appellant stopped work on 

March 16, 2015 and filed a claim for compensation (Form CA7). She received wage-loss 

compensation on the supplemental rolls as of March 16, 2015 and medical benefits. 

On March 18, 2015 appellant registered for electronic direct deposit of her compensation 

benefits. She was placed on the periodic rolls beginning May 31, 2015. 

By letter dated August 4, 2015, OWCP notified appellant that she was being placed on 

the periodic rolls for compensation and emphasized that annuity benefits paid by the Office of 

Personnel Management and benefits for wage loss were not payable for the same period of time. 

Appellant’s weekly compensation was listed as $2,395.95.

By letter dated October 9, 2015, the employing establishment advised OWCP that 

appellant had taken a VSIP lump-sum payment of $25,000.00. It noted that the VSIP could

constitute a dual benefit, and that it was making OWCP aware so that appellant did not incur an 

overpayment.

In a record of a telephone conversation with an OWCP representative dated October 20, 

2015, appellant informed OWCP that she had received $25,000.00 as her VSIP on 

September 30, 2015. 

As appellant was on the periodic rolls, OWCP sent her a Form EN1032 that requested 

information, inter alia, regarding other Federal Government benefits or payments that she had 

received. The form covered a 15-month period. On October 27, 2015 appellant completed the

Form EN1032 and reported that she had not received any other Federal Government benefits or 

payment. 

On January 26, 2016 appellant elected FECA benefits in preference to retirement 

benefits, effective January 27, 2016.

By letter dated November 17, 2016, OWCP informed appellant of a preliminary 

determination of an overpayment of compensation in the amount of $25,000.00 from 

September 30, 2015 through July 18, 2016. It determined the amount of overpayment equivalent 

to the VSIP by dividing the net monthly payment of FECA benefits of $2,395.95 by 28 days, 

then multiplying by 293 days the number of days from September 30, 2015 to July 18, 2016, and 

subtracting $71.90. This equaled $25,000.00. OWCP noted that an offset was required when 

receiving an incentive payment simultaneously with temporary total disability payments under 

FECA, and that because compensation was not suspended effective the date of the incentive 

payment, there was an overpayment.

On December 5, 2016 appellant requested a telephonic conference and contested the 

overpayment, because she believed that it occurred through no fault of her own, and she 
3

requested a waiver. She explained that an OWCP liaison had assured her that, because she was 

no longer on the active rolls, she did not need to worry about receipt of dual benefits.

In a record of a telephone conversation with an OWCP representative dated 

December 29, 2016, the representative explained to appellant that her compensation should have 

been suspended for the period of time that she received the $25,000.00 separation incentive. He

noted that appellant agreed to pay $150.00 per month to repay the debt.

By decision dated January 18, 2017, OWCP finalized the preliminary determination and 

found that appellant received an overpayment in the amount of $25,000.00. It found that 

appellant was at fault in the creation of the overpayment, and directed recovery by deducting 

$150.00 per cycle from her continuing compensation.

LEGAL PRECEDENT -- ISSUE 1

Employing establishments may offer separation pay or buyouts to encourage employees

to leave federal employment voluntarily. OWCP procedures provide that compensation for 

temporary total disability may not be paid for the period covered by separation pay.2 Some 

separation payments are based on a specific number of weeks of pay while others are capped at a 

specified amount of money. In order to apply uniform standards to all claimants, however, 

offsets for both types of payments should be computed in the same manner regardless of the way 

an employing establishment has offered separation pay.

3

 Whether separation pay is based on 

weeks of pay or a specified dollar amount, compensation should be suspended for the number of 

weeks of salary that the separation pay represents.4

ANALYSIS -- ISSUE 1

The Board finds that appellant received an overpayment of compensation. The evidence 

of record supports that appellant received a VSIP of $25,000.00. Appellant also received 

contemporaneous compensation for temporary total disability. Under 5 U.S.C. § 8116 and 

20 C.F.R. § 10.421(c), appellant is not entitled to receive both compensation and separation pay 

concurrently.5 Therefore an overpayment of compensation was created. A claimant in receipt of 

compensation benefits may not concurrently receive separation pay and payment of wage loss 

 

2

Federal (FECA) Procedure Manual, Part 2 -- Claims, Dual Benefits, Chapter 2.1000.17c.(1) (June 2009).

3

See Lynne M. Schaack, Docket No. 05-695 (issued November 9, 2005).

4 The Board notes that OWCP’s Federal (FECA) Procedure Manual, Part 2 -- Claims, Dual Benefits, Chapter 

2.1000.17 (April 1996) originally provided that separation pay could be offset by either a dollar-for-dollar amount or 

based on the period of weeks salary the payment represented. Following the Board’s decisions in Schaack, id. and 

L.J., 59 ECAB 264 (issued December 11, 2007), OWCP revised this section of the procedure manual in FECA 

Transmittal No. 09-05 (issued June 1, 2009). Where severance or separation pay is based on weeks of pay, 

compensation should be suspended for the period in question effective the date of retirement or separation. Where 

the payment is based on an amount of money, the claims examiner is to calculate the number of weeks’ worth of 

salary that the separation pay represents and suspend compensation for the number of weeks calculated. See R.H., 

Docket No. 08-2025 (issued July 20, 2009).

5

See R.H., supra note 4.
4

for total disability.6 As such, the record establishes that an overpayment of compensation was 

created.

The Board further finds that OWCP correctly calculated the amount of overpayment. 

OWCP determined the amount of overpayment equivalent to the VSIP by dividing the net 

monthly payment of FECA benefits of $2,395.95 by 28 days, then multiplying by 293 days (the 

number of days from September 30, 2015 to July 13, 2016), and subtracted $71.90. This amount 

equaled $25,000.00.7 Appellant has submitted no evidence to the contrary. As such, the Board 

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

in the amount of $25,000.00.

LEGAL PRECEDENT -- ISSUE 2

Section 8129(b) of FECA provides that 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 this subchapter or would be against 

equity and good conscience.8 No waiver of an overpayment is possible if the claimant is at fault 

in creating the overpayment.9

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.10

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.11

 

6

See Robert B. Hutchins, 52 ECAB 344 (2001); Michael A. Grossman, 51 ECAB 673 (2000).

7

See supra note 4. The Board notes that while OWCP’s calculation utilized days instead of weeks, if the amount 

of $2,395.95, appellant’s net compensation every 28-day cycle is divided into $25,000.00 to determine the number 

of weeks of compensation to be offset, the number of weeks to be offset is 41.737. The number of weeks in the 

period September 30, 2015 through July 18, 2016 equals 41.737. Therefore OWCP’s calculation of the period of the 

overpayment was correct. 

8

5 U.S.C. § 8129(b).

9 Gregg B. Manston, 45 ECAB 344, 354 (1994).

10 20 C.F.R. § 10.433(a). See Kenneth E. Rush, 51 ECAB 116, 118 (1999).

11 Id. at § 10.433(b).
5

ANALYSIS -- ISSUE 2

OWCP applied the third standard in this case, finding that appellant accepted 

compensation payments that she knew or should have known were incorrect. Appellant accepted 

a prohibited dual benefit of a VSIP which was equal to the period September 30, 2015 through 

July 18, 2016. In this regard appellant completed the Form EN1032 on October 27, 2015 failing 

to report the separation incentive payment she had received from the employing establishment. 

On December 5, 2016 appellant contested the overpayment, because she believed that it occurred 

through no fault of her own, and she requested a waiver. She explained that an OWCP liaison 

had assured her that because she was no longer on the active rolls, she did not need to worry 

about receipt of dual benefits. In a record of a telephone conversation with an OWCP 

representative dated December 29, 2016, the representative explained to appellant that her 

compensation should have been suspended for the period of time that she received the 

$25,000.00 separation incentive. He noted that appellant agreed to pay $150.00 per month to 

repay the debt.

The Board finds that OWCP properly found appellant at fault in the creation of the 

$25,000.00 overpayment, because she should have known that the $25,000.00 voluntary 

separation pay constituted a prohibited dual benefit while contemporaneously receiving 

temporary total disability from OWCP. A reasonable person should have known that she was 

not entitled to a VSIP and receipt of OWCP temporary total disability benefits at the same 

time.12

LEGAL PRECEDENT -- ISSUE 3

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

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

10.441(a) of OWCP’s regulations provide that when an overpayment has been made to an 

individual who is entitled to further payments, the individual shall refund to OWCP the amount 

of the overpayment as soon as the error is discovered or his or her attention is called to same.13 

If no refund is made, OWCP shall decrease later payments of compensation, taking into account 

the probable extent of future payments, the rate of compensation, the financial circumstances of 

the individual, and any other relevant factors, so as to minimize any hardship.14

ANALYSIS -- ISSUE 3

OWCP reduced appellant’s future compensation payments by $150.00 every 28 days, 

taking into account the factors set forth in section 10.441 of OWCP’s regulations. The case 

record indicates that appellant agreed to these terms in a telephone conversation with an OWCP 

representative on December 29, 2016. The Board finds that OWCP properly required repayment 

of the overpayment of compensation by deducting $150.00 from each continuing compensation 

payment.

 

12 See supra note 10.

13 Id. at § 10.441.

14 Id.
6

CONCLUSION

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

of $25,000.00. The Board further finds that appellant was at fault in the creation of the 

overpayment and therefore not entitled to waiver of the recovery and that OWCP properly 

required repayment of the overpayment by deducting $150.00 from appellant’s future 

compensation payments. 

ORDER

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

Compensation Programs dated January 18, 2017 is affirmed.

Issued: November 28, 2017

Washington, DC

Colleen Duffy Kiko, Judge

Employees’ Compensation Appeals Board

Alec J. Koromilas, Alternate Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board