United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

D.C., Appellant

and

DEPARTMENT OF THE ARMY, 

INSTALLATION MANAGEMENT 

COMMAND, Frederick, MD, Employer

__________________________________________

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Docket No. 17-0559

Issued: June 21, 2018

Appearances: Case Submitted on the Record

Arthur Schneider, Esq., for the appellant1

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

CHRISTOPHER J. GODFREY, Chief Judge

ALEC J. KOROMILAS, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On January 13, 2017 appellant, through counsel, filed a timely appeal from a 

December 19, 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 $19,666.27 for the periods March 1, 2011 to January 1, 2014 and February 1, 2015 to 

April 30, 2016 because he concurrently received FECA benefits and retirement benefits from the 

Social Security Administration (SSA) without an appropriate offset; (2) whether OWCP properly 

denied waiver of recovery of the overpayment; and (3) whether OWCP properly determined that 

it would recover the overpayment by deducting $550.00 per month from appellant’s continuing 

compensation payments every 28 days.

FACTUAL HISTORY

On July 2, 1991 appellant, then a 42-year-old carpenter, filed a traumatic injury claim 

(Form CA-1) alleging that he sustained an injury on June 28, 1991 when he was cutting a piece 

of Plexiglas while in the performance of duty. He stated that the Plexiglas whipped out from the 

table and cut his left hand, arm, and stomach. Appellant further indicated that he was knocked 

backwards during the incident and fell on his back. OWCP accepted the claim for laceration of 

the left hand, lumbar strain, and herniated disc. Appellant returned to work on August 19, 1991. 

On September 1, 1992 he underwent surgery to remove a cyst from the dorsum left index finger 

and became totally disabled until he returned to light duty on September 16, 1992. Appellant

filed a claim for a schedule award (Form CA-7). OWCP granted him a schedule award for 20 

percent permanent impairment of the left hand by decision dated January 12, 1994. It later 

expanded the acceptance of appellant’s claim to include chronic progressive multiple sclerosis 

and placed him on the periodic compensation rolls effective June 25, 1995. 

In a form dated April 12, 2016, SSA advised OWCP that appellant had concurrently 

received FECA benefits and retirement benefits through the Federal Employees Retirement 

System (FERS) for the periods March 1, 2011 to January 1, 2014 and February 1, 2015 to 

April 30, 2016. SSA provided the amount that appellant received in retirement benefits 

including the amount earned through FERS and the hypothetical amount that he would have 

received without FERS. Including FERS, it indicated that appellant was entitled to a monthly 

payment of $1,007.80 effective March 2011, $1,044.10 effective December 2011, $1,061.80 

effective December 2012, $1,077.70 effective December 2013, $1,453.30 effective 

February 2015, and $1,453.30 effective December 2015. Without FERS, appellant was entitled 

to a monthly payment of $721.40 effective March 2011, $747.30 effective December 2011, 

$760.00 effective December 2012, $771.40 effective December 2013, $837.90 effective 

February 2015, and $837.90 effective December 2015. 

In a May 13, 2016 letter, OWCP adjusted appellant’s compensation to offset the portion 

of his SSA retirement benefits attributable to his federal service. It indicated that he would 

receive net compensation of $2,018.76 every 28 days.

In a preliminary determination dated July 15, 2016, OWCP notified appellant that he had 

received an overpayment of compensation in the amount of $19,666.27 because it had failed to 

reduce his compensation benefits for the periods March 1, 2011 to January 1, 2014 and 

February 1, 2015 to April 30, 2016 by the portion of his SSA benefits that were attributable to 

his federal service. It calculated the overpayment amount by determining the difference between 
3

his SSA amount with and without FERS for each period. OWCP then multiplied the daily offset 

amount by the number of days in each period to find a total overpayment of $19,666.27. It 

further made a preliminary determination that appellant was without fault in the creation of the 

overpayment. OWCP requested that he complete the enclosed overpayment recovery 

questionnaire (Form OWCP-20) and submit supporting financial documents. Additionally, it 

notified appellant 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.

On August 1, 2016 appellant, through counsel, requested a prerecoupment hearing by a 

hearing representative of OWCP’s Branch of Hearings and Review. He requested a waiver of 

recovery asserting that he was unaware of the offset when receiving Social Security benefits and 

retirement benefits. Appellant further submitted an overpayment recovery questionnaire which 

listed monthly income of $1,452.90 for himself, $511.00 for his spouse, and $2,018.76 for FECA 

benefits, for total monthly income of $3,982.66. He also listed expenses of $3,246.85, which 

included in part $800.00 for rent or mortgage, $400.00 for food, $45.00 for clothing, $1,676.85 

for utilities and other household expenses, and $325.00 in debts. Appellant noted that he had 

assets of $1,415.67. 

A telephonic prerecoupment hearing was held on November 9, 2016. Appellant

reiterated his request for waiver and the hearing representative held the case record open for 30 

days for the submission of additional evidence.

On November 16, 2016 counsel submitted additional financial statements and 

documentation. Appellant submitted an updated list of expenses for $800.00 of rent, $386.00 of 

Cigna medical copays, $170.00 of electric utility, $65.00 of fuel oil, $46.00 of telephone 

services, $30.00 of cable television and internet services, $286.00 of car payment, $27.00 of 

renter’s insurance, $59.00 of auto insurance, $53.00 of NRA term life insurance, $64.00 of 

Nationwide life insurance, $15.00 of newspapers, $10.00 of ambulance/medic fees, $25.00 of 

Chambersburg Hospital fees, $19.00 of prescription copays, $293.00 of medical copays, $12.00 

of AAA membership, $11.00 of AAA accident insurance premiums, $28.00 of AAA Mutual 

Omaha and high insurance accident premiums, $500.00 of groceries, $120.00 of gasoline, $40.00 

of clothing, $550.00 of dental bills, and $2,140.00 of medical supplies, for a total of $5,749.00. 

By decision dated December 19, 2016, OWCP found an overpayment of compensation in 

the amount of $19,666.27 for the periods March 1, 2011 to January 1, 2014 and February 1, 2015 

to April 30, 2016 because it had failed to offset appellant’s compensation payments for the 

portion of his SSA retirement benefits that were attributable to his federal service. It found that 

he was not at fault in creating the overpayment, but denied waiver of recovery as his income 

exceeded his expenses. OWCP noted that appellant had included expenses for cable television 

and internet services in the amount of $30.00, which were not considered ordinary or necessary 

living expenses. It further found that the Nationwide life insurance premiums of $64.00 and 

AAA accident insurance premiums totaling $28.00 were duplicative of NRA and AAA 

premiums which were already accounted for. OWCP noted that appellant had one outstanding 

dental bill for $286.00 and one outstanding medical bill for $663.00 and divided them by 12 to 
4

calculate monthly amounts of $24.00 and $55.00, respectively.3 It calculated that appellant’s

monthly income was $3,982.00 and his monthly expenses totaled $3,016.00, which yielded a 

monthly surplus amount of $966.00. OWCP determined that it would recover the overpayment

by deducting $550.00 per month from appellant’s continuing compensation payments every 28 

days.

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 or her 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 benefits, OWCP will obtain information from the 

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 

the amount of benefits which are attributable to federal service and that amount will be deducted 

from FECA benefits to obtain the amount of overpayment.

8

 

3

In its December 19, 2016 decision, OWCP incorrectly noted that the dental bill was $286.00 when dividing it by 

12 to obtain a monthly amount of $24.00. However, the Board finds that OWCP committed harmless error as it had 

previously indicated the correct amount of $266.00 and the difference of $2.00 per month will not change the 

outcome of this appeal.

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(e) (January 1997); 

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

8 See L.B., Docket No. 11-2076 (issued August 29, 2012).
5

ANALYSIS -- ISSUE 1

OWCP accepted that appellant sustained a laceration of the left hand, lumbar strain, and 

herniated disc while at work on June 28, 1991 and awarded him a schedule award for 20 percent 

permanent impairment of the left hand. It later expanded the acceptance of the claim to include 

chronic progressive multiple sclerosis and placed appellant on the periodic compensation rolls 

effective June 25, 1995.

In a form dated April 12, 2016, SSA advised OWCP that appellant had concurrently 

received FECA benefits and retirement benefits through the FERS for the periods March 1, 2011 

to January 1, 2014 and February 1, 2015 to April 30, 2016. Appellant cannot receive both wageloss compensation and federal retirement benefits concurrently.9

 Consequently, he received an 

overpayment of compensation.

OWCP calculated the amount of overpayment by determining the difference between the 

SSA amount with and without FERS for each period and multiplying the daily offset amount by 

the number of days in each period, to find a total overpayment of $19,666.27. The record 

includes an overpayment worksheet explaining the overpayment calculation. There is no 

contrary evidence of record and the Board, accordingly, finds an overpayment of compensation 

in the amount of $19,666.27.

LEGAL PRECEDENT -- ISSUE 2

Section 8129 of FECA provides that an overpayment must be recovered unless “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.”

10

 Thus, a 

finding that appellant was without fault does not automatically result in waiver of recovery of the 

overpayment. OWCP must then exercise its discretion to determine whether recovery of the 

overpayment would defeat the purpose of FECA or would be against equity and good 

conscience.11

According to 20 C.F.R. § 10.436, 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 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.12 An individual’s liquid assets 

 

9 5 U.S.C. § 8116(d). See J.W., Docket No. 16-1355 (issued January 10, 2017); see also FECA Bulletin No. 

97-09 (issued February 3, 1997).

10 5 U.S.C. § 8129(a)-(b).

11 See L.S., 59 ECAB 350 (2008).

12 20 C.F.R. § 10.436. 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) 

(June 2009).
6

include, but are not limited to cash, the value of stocks, bonds, savings accounts, mutual funds,

and certificates of deposits.13 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, vehicle(s) (i.e., any vehicles above the two allowed per immediate family), jewelry, and 

artwork.

14

Section 10.437 provides that recovery of an overpayment is considered to be against 

equity and good conscience when an individual who received an overpayment would experience 

severe financial hardship attempting to repay the debt and when an 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.15 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.16

ANALYSIS -- ISSUE 2

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

compensation. The overpayment cannot be waived, however, unless recovery would defeat the 

purpose of FECA or would be against equity and good conscience. In order to establish that 

repayment of the overpayment would defeat the purpose of FECA, appellant must show that he 

requires substantially all of his income to meet current ordinary and necessary living expenses 

and that his assets do not exceed the resource base as determined by OWCP’s procedures.

17

OWCP determined that appellant did not require substantially all of his income to meet 

ordinary and normal living expenses. Appellant asserted that he had a monthly income of

$3,982.00 and monthly expenses of $5,749.00. OWCP excluded appellant’s expenses for cable 

television and internet services of $30.00 because they are not considered ordinary or necessary 

living expenses.18 It further excluded Nationwide life insurance premiums of $64.00 and AAA 

accident insurance premiums of $28.00 as they were duplicative of NRA and AAA premiums 

which were already accounted for.19 OWCP also divided outstanding dental and medical bills by 

12 to obtain monthly amounts of $24.00 and $55.00, respectively. It determined that appellant’s 

monthly expenses totaled $3,016.00.

 

13 Id.

14 Id.

15 20 C.F.R. § 10.437.

16 Id. at § 10.437(b)(1).

17 Id. at § 10.436.

18 See S.W., Docket No. 11-1687 (issued July 23, 2012).

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

6.200.6(a)(3) (June 2009); see also J.W., supra note 9.
7

OWCP found that appellant’s monthly income of $3,982.00 and his monthly expenses of

$3,016.00 yielded a monthly surplus amount of $966.00. An individual is deemed to need 

substantially all of his monthly income to meet current and ordinary living expenses if monthly 

income does not exceed monthly expenses by more than $50.00.

20

 As appellant’s current income 

exceeds his ordinary and necessary living expenses by $966.00, he does not need substantially all 

of his income for ordinary and necessary living expenses.

21

Additionally, the evidence of record does not demonstrate that repayment of the 

overpayment would be against equity and good conscience. Appellant submitted no evidence 

that he relied upon the incorrect payments to his detriment or that he would experience severe 

financial hardship attempting to repay the debt.

22

 Consequently, OWCP properly denied waiver

of recovery of the overpayment.

Appellant maintained that he was not at fault in creating the overpayment and repayment 

would cause financial hardship. However, the fact that an error by OWCP resulted in an 

overpayment does not relieve a claimant from liability for repayment.

23

 Further, as found by the 

Board, the evidence does not demonstrate that appellant would experience financial hardship 

repaying the overpayment.

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.24

Section 10.441(a) of the regulations provides 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. 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.25

ANALYSIS -- ISSUE 3

The Board finds that OWCP gave due regard to the financial information provided by 

appellant. Appellant’s monthly household income totaled $3,982.00 and his expenses totaled 

$3,016.00, equaling a monthly surplus amount of $966.00 per month. The Board finds that 

 

20 Id. at Chapter 6.200.6(a)(1); see also Desiderio Martinez, 55 ECAB 336 (2004).

21 As appellant’s income exceeds his ordinary and necessary living expenses by more than $50.00, it is not 

necessary for OWCP to consider whether his assets exceed the allowable resource base. See J.W., supra note 9.

22 20 C.F.R. § 10.437.

23 Id. at § 10.435(a); Lawrence J. Dubuque, 55 ECAB 667 (2004).

24 See Lorenzo Rodriguez, 51 ECAB 295 (2000).

25 20 C.F.R. § 10.441(a).
8

OWCP properly determined that the rate of recovery should be $550.00 from appellant’s 

continuing compensation payments every 28 days. 

CONCLUSION

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

of $19,666.27 for the periods March 1, 2011 to January 1, 2014 and February 1, 2015 to 

April 30, 2016 because he concurrently received FECA benefits and retirement benefits from the 

SSA without an appropriate offset. The Board further finds that OWCP properly denied waiver 

of recovery of the overpayment and properly determined that it would recover the overpayment 

by deducting $550.00 per month from appellant’s continuing compensation payments every 28 

days.

ORDER

IT IS HEREBY ORDERED THAT the December 19, 2016 decision of the Office of 

Workers’ Compensation Programs is affirmed.

Issued: June 21, 2018

Washington, DC

Christopher J. Godfrey, 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