United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

M.T., Appellant 

and 

U.S. POSTAL SERVICE, BULK MAIL 

CENTER, Memphis, TN, Employer 

__________________________________________ 

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Docket No. 16-0229 

Issued: May 10, 2016 

Appearances: Case Submitted on the Record

Appellant, pro se 

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 November 19, 2015 appellant timely appealed the September 2, 2015 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 the case. 

ISSUES 

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

amount of $27,558.81 for the period January 10, 2013 through May 28, 2014; and (2) whether 

OWCP properly denied waiver of recovery of the overpayment. 

FACTUAL HISTORY 

On February 24, 2003 appellant, then a 45-year-old small package and bundle sorter 

clerk, injured her right knee moving a box with a manual pallet jack. OWCP initially accepted 

 1

 5 U.S.C. § et seq. 
2

her traumatic injury claim for right knee lateral meniscus tear (ICD-9 836.1). On November 14, 

2003 appellant underwent an arthroscopic right knee partial lateral meniscectomy with limited 

debridement. By decision dated June 3, 2004, OWCP granted a schedule award for 10 percent 

permanent impairment of the right lower extremity.2

 On April 14, 2006 appellant underwent a 

second right knee arthroscopic procedure, which OWCP authorized. This time she had partial 

medial and partial lateral meniscectomies with limited debridement. Ultimately, OWCP 

expanded appellant’s claim to include unspecified right knee internal derangement (ICD-9 717.9) 

and permanent aggravation of right knee osteoarthritis (ICD-9 715.36). Additionally, it 

authorized a January 11, 2012 right total knee arthroplasty. Following her latest surgery, 

appellant received wage-loss compensation for temporary total disability. On April 30, 2012 she 

returned to work in a full-time, limited-duty capacity with no loss in pay.3

 

On January 10, 2013 appellant filed a claim for a schedule award (Form CA-7). She did 

not identify any dependents on her claim form. 

In a report dated January 10, 2013, Dr. Marc J. Mihalko, a Board-certified orthopedic 

surgeon and appellant’s treating physician, advised that she reached maximum medical 

improvement following her right total knee replacement. Based on the results of appellant’s 

January 11, 2012 surgery, Dr. Mihalko found that she had 25 percent right lower extremity 

impairment (RLE) under Table 16-3, Knee Regional Grid (LEI), A.M.A., Guides 511 (6th ed. 

2009). 

On January 14, 2013 the DMA reviewed the record, including Dr. Mihalko’s January 10, 

2013 report, and concurred with his 25 percent RLE impairment rating under Table 16-3, 

A.M.A., Guides 511. The DMA noted the rating was based on the “good results” of appellant’s 

total knee arthroplasty. 

On January 16, 2013 OWCP granted a schedule award for 25 percent permanent RLE 

impairment.4

 The award covered a 72-week period from January 10, 2013 through 

May 28, 2014. OWCP paid appellant at the augmented (3⁄4) compensation rate. 

Effective January 31, 2013, appellant voluntarily retired and subsequently received a 

nondisability retirement annuity from the Office of Personnel Management (OPM).5 

On March 6, 2013 OWCP issued a loss of wage-earning capacity determination finding 

that appellant’s May 22, 2012 limited-duty, sedentary work assignment fairly and reasonably 

 2

 In an April 8, 2004 report, OWCP’s district medical adviser (DMA) found 10 percent right lower extremity 

impairment under the fifth edition of the American Medical Association, Guides to the Evaluation of permanent 

Impairment (A.M.A., Guides) (2001). See Table 17-33, A.M.A., Guides 546 (5th ed. 2001). 

3

 Appellant was limited to sedentary work only. On May 8, 2012 the employing establishment offered her a 

limited-duty assignment performing sedentary work, sitting for eight hours daily, which she accepted on 

May 22, 2012. 

4

 For complete loss of use of a leg, an employee shall receive 288 weeks’ compensation. 5 U.S.C. § 8107(c)(2). 

5

 During a February 21, 2013 telephone conversation (CA-110 notes), appellant advised OWCP that she retired 

on January 31, 2013 “because [appellant] was eligible and for no other reason.” 
3

represented her wage-earning capacity. The decision noted that the position was considered 

suitable to her partially disabled condition, and further noted that she performed the position for 

at least two months prior to her voluntary retirement effective January 31, 2013. 

On February 26, 2014 appellant submitted a financial disclosure (EN/CA-1032) form 

indicating, that she was unmarried and had no other eligible dependents. 

On October 16, 2014 OWCP issued an amended schedule award. The decision explained 

that OWCP previously failed to take into account appellant’s prior 10 percent RLE award when 

issuing its January 16, 2013 schedule award for 25 percent. In light of the prior award, appellant 

was only entitled to an additional 15 percent, representing a total right lower extremity 

permanent impairment of 25 percent. OWCP further explained that the January 16, 2013 

schedule award was based on the augmented compensation rate (3⁄4) despite her having no 

eligible dependents. The October 16, 2014 amended award (15 percent) represented 43.2 weeks 

of compensation, which covered the period January 10 through November 8, 2013.6

 

Additionally, OWCP recalculated the schedule award based on the regular (2⁄3) compensation 

rate. 

On October 27, 2014 OWCP issued a preliminary finding of overpayment in the amount 

$27,558.81 covering the period January 10, 2013 through May 28, 2014. It reiterated that 

appellant was only entitled to an additional 15 percent for her right lower extremity impairment. 

She was also not entitled to receive compensation at the augmented (3⁄4) rate. OWCP further 

explained that appellant was not at fault in creating the overpayment. 

Appellant requested a prerecoupment hearing, which was held before an OWCP hearing 

representative on June 16, 2015. Prior to the hearing, she submitted an overpayment recovery 

questionnaire (OWCP-20) with supporting documentation. Appellant initially reported monthly 

OPM retirement income (net) of $2,249.03 and monthly expenses of $2,059.65. She also 

reported assets totaling $10,829.00.7 At the prerecoupment hearing appellant indicated that her 

monthly OPM retirement annuity increased to $2,286.72 as of December 2014. She also 

indicated that her previously reported savings ($4,073.00) had been reduced by $2,000.00. 

Additionally, appellant testified that she had $4,800.00 in her Thrift Savings Plan (401(k)) 

account, which she had not previously reported. Lastly, she testified that her previously reported 

monthly expenses remained the same. 

By decision dated September 2, 2015, the OWCP hearing representative determined that 

appellant received an overpayment of compensation in the amount of $27,558.81 for the period 

January 10, 2013 through May 28, 2014. She also found that appellant was not at fault in 

creating the overpayment. As to the issue of waiver, the hearing representative determined that 

appellant’s monthly income ($2,286.72) exceeded her monthly expenses ($2,059.65) by more 

than $225.00 per month. She also noted that appellant had sufficient assets such that recovery of 

the overpayment would not defeat the purpose of FECA. The hearing representative further 

found that recovery of the overpayment would not be against equity and good conscience. Based 

 6 See supra note 4. 

7

 Appellant’s reported assets included a vacant parcel of land with a tax assessed value of $5,850.00. 
4

on the documented monthly surplus, appellant would not experience severe financial hardship in 

attempting to repay the debt. Also, she had not alleged, nor did the record support that she 

relinquished a valuable right or changed her position for the worse based on notice or receipt of 

the January 16, 2013 schedule award. Consequently, the hearing representative denied waiver of 

recovery of the overpayment.8

LEGAL PRECEDENT -- ISSUE 1 

FECA and its implementing regulations provide for the reduction of compensation for 

subsequent injury to the same scheduled member.9

 Benefits payable under 5 U.S.C. § 8107(c) 

shall be reduced by the period of compensation paid under the schedule for an earlier injury if: 

(1) compensation in both cases is for impairment of the same member or function or different 

parts of the same member or function; and (2) the latter impairment in whole or in part would 

duplicate the compensation payable for the preexisting impairment.10

Compensation for impairment is computed based on the employee’s effective pay rate 

and whether he or she has any eligible dependents.11 Depending on whether the employee has at 

least one eligible dependent, compensation will be paid at either 2⁄3 or 3⁄4 of the effective pay 

rate.12 For purposes of entitlement to augmented (3⁄4) compensation, a dependent includes: (1) a 

wife or husband; (2) an unmarried child under 18 years of age; (3) an unmarried child over 18 

who is incapable of self-support; (4) a student, until he/she reaches 23 years of age or completes 

four years of school beyond the high school level; and (5) a wholly dependent parent.13

ANALYSIS -- ISSUE 1 

Appellant does not challenge OWCP’s latest finding of 25 percent permanent impairment 

of the right lower extremity. In January 2013, her then-treating physician, Dr. Mihalko, found 25 

percent permanent right lower extremity impairment based on appellant’s status post right total 

knee arthroplasty. Moreover, the DMA concurred with Dr. Mihalko’s rating under Table 16-3, 

A.M.A., Guides 511. 

In June 2004, appellant received a schedule award for 10 percent permanent impairment 

based on an earlier right knee arthroscopic procedure. Her latest rating of 25 percent due to the 

January 11, 2012 right total knee arthroplasty established an additional impairment of 15 percent 

of the right lower extremity. However, OWCP failed to offset the current rating by the prior 

 8

 The hearing representative found that appellant was capable of repaying the debt in regular monthly installments 

of $175.00. 

9

 5 U.S.C. § 8108; 20 C.F.R. § 10.404(c) (2014). 

10 Id. at § 10.404(d)(1), (d)(2).

11 See 5 U.S.C. §§ 8107 and 8110; id. at § 10.404(c). 

12 Id. at § 10.404(c); Federal (FECA) Procedure Manual, Part 2 -- Claims, Schedule Awards & Permanent 

Disability Claims, Chapter 2.808.7(f) (February 2013). 

13 5 U.S.C. § 8110(a); 20 C.F.R. § 10.405(a) and (b). 
5

award, and mistakenly paid appellant the full 25 percent impairment. After realizing its mistake, 

it issued an amended award on October 16, 2014 finding her entitled to only an additional 

15 percent permanent impairment of the right lower extremity. Thus, instead of the 72 weeks of 

compensation (25 percent) previously paid, appellant was only entitled to 43.2 weeks of 

compensation (15 percent). The Board finds that her current rating of 25 percent permanent 

impairment of the right lower extremity was appropriately reduced based on the June 3, 2004 

schedule award for 10 percent permanent right lower extremity impairment.14

The Board also finds that appellant was not entitled to receive compensation at the 

augmented (3⁄4) rate. When appellant filed her claim (Form CA-7) for a schedule award in 

January 2013, she did not list any dependents,15 and her latest financial disclosure (EN/CA-1032) 

form indicates appellant is unmarried and has no other eligible dependents.16 Accordingly, 

appellant’s schedule award beginning January 10, 2013 should have been paid at the 

regular/basic compensation rate (2⁄3) rather than the augmented (3⁄4) rate.17

By the time OWCP realized both errors, the January 16, 2013 schedule award had been 

paid in full. OWCP’s fiscal records reflect schedule award disbursements totaling $60,062.73 

for the 72-week period beginning January 10, 2013 and ending May 28, 2014. When 

recalculated based on a 43.2-week period (January 10 through November 8, 2013) at the basic 

rate (2⁄3), appellant was entitled to $32,503.92 for her additional 15 percent permanent 

impairment. The difference between what she received and what she was entitled to receive 

represented an overpayment of compensation in the amount of $27,558.81. Accordingly, the 

record establishes that appellant received an overpayment of compensation in the amount of 

$27,558.81 for the period January 10, 2013 through May 28, 2014. As such, the Board affirms 

OWCP’s findings with respect to the fact and amount of overpayment. The Board also affirms 

OWCP’s determination that appellant was without fault in either creating or accepting the 

overpayment. 

LEGAL PRECEDENT -- ISSUE 2 

An individual who is without fault in creating or accepting an overpayment is nonetheless 

subject to recovery of the overpayment unless adjustment or recovery would defeat the purpose 

of FECA or would be against equity and good conscience.18 Recovery of an overpayment will 

defeat the purpose of FECA if such recovery would cause hardship to a current or former 

beneficiary because the beneficiary from whom OWCP seeks recovery needs substantially all of 

her current income, including compensation benefits, to meet current ordinary and necessary 

 14 Supra note 10. 

15 Appellant previously claimed her son as an adult dependent college student, but based on his February 17, 1983 

date of birth, any period of eligibility has long since expired. 

16 Appellant’s February 26, 2014 (EN/CA-1032) covers the prior 15-month period dating back to 

November 2012. 

17 20 C.F.R. § 10.404(c). 

18 5 U.S.C. § 8129(b); id. at §§ 10.433, 10.434, 10.436, 10.437. 
6

living expenses, and the beneficiary’s assets do not exceed a specified amount as determined by 

OWCP.19 Additionally, 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 in attempting to repay the debt or when an individual, in reliance on such payment or on 

notice that such payments would be made, relinquished a valuable right or changed her position 

for the worse.20 

The individual who received the overpayment is responsible for providing information 

about income, expenses, and assets as specified by OWCP.21 This information is necessary for 

determining whether a waiver of recovery of the overpayment is warranted.22 The information is 

also used to determine an appropriate repayment schedule, if necessary.23 Failure to submit the 

requested information within 30 days of the request shall result in denial of waiver.24

ANALYSIS -- ISSUE 2 

Appellant requested waiver of recovery of the above-noted overpayment. She submitted 

an overpayment recovery questionnaire (OWCP-20) and provided documentation regarding her 

income, assets, and various expenses. At the prerecoupment hearing, appellant indicated that her 

monthly OPM retirement annuity was $2,286.72. She did not identify any additional sources of 

income. On her November 20, 2014 OWCP-20 appellant reported total monthly expenses of 

$2,059.65. At the subsequent prerecoupment hearing, she indicated that her previously reported 

monthly expenses had not changed. Based on the reported income and expenses, the OWCP 

hearing representative correctly noted that appellant had a monthly surplus in excess of $225.00. 

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

current ordinary and necessary living expenses if monthly income does not exceed monthly 

expenses by more than $50.00.25 Because appellant has a monthly surplus of approximately 

$225.00, recovery of the overpayment would not defeat the purpose of FECA.26 For the same 

 19 Id. at § 10.436(a), (b). For an individual with no eligible dependents the asset base is $4,800.00. The base 

increases to $8,000.00 for an individual with a spouse or one dependent, plus $960.00 for each additional dependent. 

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

6.200.6a(1)(b) (June 2009). 

20 Id. at § 10.437(a), (b). 

21 Id. at § 10.438(a). 

22 Id.

23 Id.

24 20 C.F.R. § 10.438(b).

25 Supra note 19 at Chapter 6.200.6a(1)(b). 

26 20 C.F.R. § 10.436(a). 
7

reason, recovery would not be against equity and good conscience. The record does not support 

that appellant would experience severe financial hardship in attempting to repay the debt.27

Although appellant had not previously alleged detrimental reliance, on appeal she 

claimed that her decision to retire effective January 31, 2013 was based on OWCP’s January 16, 

2013 schedule award. Notwithstanding the temporal relationship between the erroneous 

schedule award and the effective date of her voluntary retirement, there is no evidence to 

substantiate her claim of detrimental reliance. Specifically, other than her statements there is no 

evidence that appellant chose to retire once she learned of the January 16, 2013 schedule award. 

Moreover, the record contradicts her recent claim of detrimental reliance. According to the 

February 21, 2013 CA-110 notes, appellant advised OWCP that she retired on January 31, 2013 

“because she was eligible and for no other reason.” The Board finds that the record does not 

support her claim of detrimental reliance. There is no evidence that appellant changed her 

position for the worse or relinquished a valuable right based “chiefly or solely” in reliance on the 

January 16, 2013 schedule award.28 As such, she failed to establish that recovery of the 

overpayment would be against equity and good conscience. Accordingly, the Board finds that 

OWCP properly denied waiver of recovery of the overpayment. 

CONCLUSION 

Appellant received an overpayment of compensation in the amount of $27,558.81 for the 

period January 10, 2013 through May 28, 2014. Although she was not at fault in creating the 

overpayment, she is not entitled to waiver of recovery. 

 27 Id. at § 10.437(a). 

28 Id. at § 10.437(b). 
8

ORDER 

IT IS HEREBY ORDERED THAT the September 2, 2015 decision of the Office of 

Workers’ Compensation Programs is affirmed. 

Issued: May 10, 2016 

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