United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

J.C., Appellant

and

SOCIAL SECURITY ADMINISTRATION, 

West Palm Beach, FL, Employer

__________________________________________

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Docket No. 19-0122

Issued: June 11, 2019

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

PATRICIA H. FITZGERALD, Deputy Chief Judge

JANICE B. ASKIN, Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On October 22, 2018 appellant filed a timely appeal from a May 23, 2018 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.2

ISSUES

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

amount of $22,560.44 for the period September 3, 1999 through November 11, 2017; (2) whether 

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

 

1 5 U.S.C. § 8101 et seq.

2 The Board notes that, following the May 23, 2018 decision, OWCP received additional evidence. However, the 

Board’s Rules of Procedure provides: “The Board’s review of a case is limited to the evidence in the case record that 

was before OWCP at the time of its final decision. Evidence not before OWCP will not be considered by the Board 

for the first time on appeal.” 20 C.F.R. § 501.2(c)(1). Thus, the Board is precluded from reviewing this additional 

evidence for the first time on appeal. Id.
2

required recovery of the overpayment by deducting $500.00 every 28 days from appellant’s 

continuing compensation payments.

FACTUAL HISTORY

On May 12, 1997 appellant, then a 55-year-old operations supervisor, filed a traumatic 

injury claim (Form CA-1) alleging that she sustained “back and neck sprains and internal injuries 

to the lower stomach and pelvic area” after she was struck by a cart while in the performance of 

duty. OWCP accepted the claim for cervical sprain and abdominal contusion. It initially paid 

appellant wage-loss compensation on the supplemental rolls, and then paid wage-loss 

compensation on the periodic rolls commencing May 3, 1999. 

In a letter dated May 6, 2002, OWCP informed appellant that her gross compensation was 

$3,280.00, that her health benefits deduction was $189.66, that her optional life insurance 

deduction was $8.30, that her basic life insurance deduction was $9.41, and that her net 

compensation every 28 days was $3,063.22. 

In an undated Office of Personnel Management (OPM) form regarding election of health 

benefits and life insurance, received by OWCP on November 6, 2003, appellant marked boxes 

electing to have basic life insurance and optional life insurance premiums withheld beginning 

September 4, 1999 and continuing. Appellant also elected the “no reduction” option for postretirement basic life insurance (PRBLI).

In a letter dated August 13, 2004, OWCP informed appellant that her gross compensation 

was $3,280.00, that her health benefits deductions was $225.76, that her life insurance deduction 

was $17.20, that “other” deductions totaled $9.41, and that her net compensation was $3,148.22 

paid every 28 days.3

In a letter dated March 16, 2017, appellant requested information regarding the dates and 

amounts of any and all life insurance premiums withheld since March 3, 1997. On April 6, 2017

OWCP sent her the requested information. 

By preliminary determination dated March 23, 2018, OWCP advised appellant that an 

overpayment of compensation in the amount of $22,560.44 had been created because she had 

elected PRBLI with no reduction effective September 3, 1999, but it did not begin deducting 

PRBLI premiums from her compensation payments until November 11, 2017. Consequently, 

appellant was in arrears for the premiums from September 3, 1999 through November 11, 2017. 

OWCP found that she was without fault in the creation of the overpayment. It advised appellant 

of her right to request a telephone conference, a final decision based on the written evidence, or a 

 

3

In a letter dated April 28, 2016, OWCP informed appellant that an overpayment in the amount of $15.32 for the 

period January 10 to March 5, 2016 was identified in her case. It indicated that the overpayment occurred because 

Federal Employees Group Life Insurance (FEGLI) premiums were not deducted from appellant’s compensation 

payments. OWCP related that debt collection actions on overpayments of less than $200.00 may be administratively 

terminated at any time after overpayment had been identified. It found that the collection action on the overpayment 

was administratively terminated because the overpayment was less than $200.00, and did not result from either a 

refund due to OWCP as a result of a third-party settlement, or an election of OPM benefits where the debt can be 

recovered from the retroactive part of annuities held by OPM. 
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prerecoupment hearing, if she objected to the decision or requested waiver of the recovery of the 

overpayment. OWCP further advised that appellant was to complete an overpayment recovery 

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

On April 24, 2018 appellant requested a telephone conference and contested the 

overpayment because she believed the overpayment occurred through no fault of her own, and 

requested a waiver. She submitted a completed Form OWCP-20 and relevant supporting financial 

documents along with her request. Appellant indicated that she had a total monthly income of 

$7,101.84 and total monthly expenses of $6,248.51. Monthly income consisted of $1,557.57 in

FECA benefits, $1,506.00 in SSA benefits, $3,638.27 in Veterans benefits, and $400.00 in other 

income. Monthly expenses consisted of $800.00 for food, $400.00 for clothing, $1,301.51 for rent 

or mortgage, $3,600.00 for American Express debt, and $147.00 for Bank of America debt. In 

addition, appellant’s total net assets equaled $28,632.18. Her assets consisted of $150.00 cash on 

hand, $28,282.18 savings, and $200.00 checking. 

By decision dated May 23, 2018, OWCP finalized its preliminary determination that 

appellant had received an overpayment of compensation in the amount of $22,560.44 because 

PRBLI premiums were not properly deducted from her compensation payments for the period 

September 3, 1999 through November 11, 2017. It found that she was without fault in the creation 

of the overpayment, but that she was not entitled to waiver of recovery because she had not 

provided information to support that adjustment or recovery would defeat the purpose of FECA or 

be against equity and good conscious. OWCP directed recovery by deducting $500.00 every 28 

days from appellant’s continuing compensation payments. 

LEGAL PRECEDENT -- ISSUE 1

Section 8129(a) of FECA provides that the United States shall pay compensation for the 

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

performance of duty.4 When an overpayment of compensation has been made to an individual 

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 the individual is entitled.5

Under the FEGLI Program, most civilian employees of the Federal Government are eligible 

to participate in basic life insurance and one or more of the options.6 The coverage for basic life 

insurance is effective unless waived,7and premiums for basic and optional life coverage are 

withheld from the employee’s pay.8 Upon retirement or upon separation from the employing 

establishment or being placed on the periodic FECA compensation rolls, an employee may choose 

to continue basic and optional life insurance coverage in which case the schedule of deductions 

 

4 5 U.S.C. § 8129.

5 20 C.F.R. §§ 10.434-10.437; J.L., Docket No. 18-0212 (issued June 8, 2018).

6 5 U.S.C. § 8702(a).

7

Id. at § 8702(b).

8

Id. at § 8707.
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made will be used to withhold premiums from his or her annuity or compensation payments.9 

Basic insurance coverage shall be continued without cost to an employee who retired or began 

receiving compensation on or before December 31, 1989.10 However, the employee is responsible 

for payment of premiums for optional life insurance coverage which is accomplished by 

authorizing withholdings from his or her compensation.11

A 1980 amendment of 5 U.S.C. § 8706(b)(2) provided that an employee receiving 

compensation under FECA could elect continuous withholdings from his or her compensation, so 

that his or her life insurance coverage could be continued without reduction. 5 C.F.R. § 870.701 

(December 5, 1980) provided that an eligible employee had the option of choosing no life 

insurance; Option A -- basic coverage (at no additional cost) subject to continuous withholdings 

from compensation payments that would be reduced by two percent a month after age 65 with a 

maximum reduction of 75 percent; Option B -- basic coverage (at an additional premium) subject 

to continuous withholdings from compensation payments that would be reduced by one percent a 

month after age 65 with a maximum reduction of 50 percent; or Option C -- basic coverage subject 

to continuous withholdings from compensation payments with no reductions after age 65 (at a 

greater premium).12

Each employee must elect or waive Option A, Option B, and Option C coverage, in a 

manner designated by OPM, within 60 days after becoming eligible unless, during earlier 

employment, he or she filed an election or waiver that remains in effect.13 An employee who does 

not file a life insurance election with his or her employing office, in a manner designated by OPM, 

specifically electing any type of optional insurance, is considered to have waived it and does not 

have that type of optional insurance.14 When an underwithholding of life insurance premiums 

occurs, the entire amount is deemed an overpayment of compensation because OWCP must pay 

the full premium to OPM upon discovery of the error.15

 

9

Id. at § 8706.

10 Id. at § 8706(b)(2).

11 Id. at § 8706(b)(3)(B). See V.H., Docket No. 18-1124 (issued January 16, 2019); see also S.P., Docket No. 17-

1888 (issued July 18, 2018); Edward J. Shea, 43 ECAB 1022 (1992) (the Board found that the claimant received 

an overpayment of compensation where he elected PRBLI with no reduction and no premiums had been deducted 

from his compensation from January 3, 1988 to May 6, 1989). See also Glen B. Cox, 42 ECAB 703 (1991) (the Board 

found that an overpayment of compensation was created due to no deduction of premiums for optional life insurance 

for the period July 1983 through November 1989).

12 See V.H., id.; see also S.P., id.; James J. Conway, Docket No. 04-2047 (issued May 20, 2005).

13 5 C.F.R. § 870.504(a)(1).

14 Id. at § 870.504(b).

15 5 U.S.C. § 8707(d); see V.H., supra note 11; see also Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd 

Otte, 48 ECAB 334 (1997).
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ANALYSIS -- ISSUE 1

The Board finds that an overpayment of compensation was created in the amount of 

$22,560.44 for the period September 3, 1999 through November 11, 2018.

The Board finds that OWCP presented detailed findings of fact and a statement of reasons 

to support its determination that appellant received an overpayment of compensation in the amount 

of $22,560.44 for the period September 3, 1999 through November 11, 2018. The record contains

a signed form dated November 6, 2003 which indicates appellant’s election of PRBLI with no 

reduction.16 OWCP, however, failed to properly deduct premiums for PRBLI, thereby creating an 

overpayment of compensation in the amount of $22,560.44. It explained to appellant how the 

overpayment occurred in its preliminary determination of overpayment dated March 23, 2018.17

The Board finds that OWCP provided a clear and detailed explanation of the fact and 

amount of the overpayment. The mathematical calculations within these documents were 

reproducible and showed the amount of the overpayment was in fact $22,560.44 for the period 

September 3, 1999 through November 11, 2018. The Board thus finds that OWCP properly 

determined the fact and amount of appellant’s overpayment.18

LEGAL PRECEDENT -- ISSUE 2

Section 8129 of FECA19 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.” 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.20

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 

 

16 Compare D.T., Docket No. 17-0901 (issued January 29, 2018) (finding that OWCP had not established 

an overpayment without a signed form supporting the claimant’s selection of PRBLI).

17 L.K., Docket No. 17-1393 (issued March 20, 2018).

18 V.H., supra note 10; E.H., Docket No. 15-0848 (issued July 6, 2016).

19 5 U.S.C. § 8129(1)-(b); A.C., Docket No. 18-1550 (issued February 21, 2019); see D.C., Docket No. 17-0559 

(issued June 21, 2018).

20 A.C., id.; see V.T., Docket No. 18-0628 (issued October 25, 2018).
6

OWCP from data provided by the Bureau of Labor Statistics.21 An individual’s liquid assets

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

certificates of deposits.22 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 and supplies.23

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.24 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.25

ANALYSIS -- ISSUE 2

The Board finds that OWCP properly denied waiver of recovery of the $22,560.44 

overpayment.

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

compensation and considered whether she was entitled to waiver of recovery. Waiver is only 

possible if recovery would defeat the purpose of FECA or would be against equity and good 

conscience.26 In order to establish that repayment of the overpayment would defeat the purpose 

of FECA, appellant must show that she requires substantially all of her income to meet current 

ordinary and necessary living expenses and that her assets do not exceed the established limit as 

determined by OWCP procedures.27

The Board finds that OWCP properly determined that appellant did not require 

substantially all of her income to meet ordinary living expenses. Appellant indicated that she had 

monthly expenses of $6,248.51 and monthly income of $7,101.84. As her monthly income 

exceeded her ordinary and necessary living expenses by more than $50.00, she did not need 

 

21 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).

22 Id.

23 Id.

24 20 C.F.R. § 10.437.

25 Id. at § 10.437(b)(1).

26 See A.C., supra note 19; see also E.K., Docket No. 18-0587 (issued October 1, 2018).

27 Supra note 21.
7

substantially all of her income for ordinary and necessary living expenses.28 Appellant also listed 

net assets in the amount of $28,632.18, which exceed the resource base of $4,800.00.

Additionally, the evidence of record does not demonstrate that recovery of the overpayment 

would be against equity and good conscience. Appellant has submitted no evidence that she had 

relied upon the incorrect payments to her detriment or that she would experience severe financial 

hardship attempting to repay the debt.29 Consequently, OWCP properly denied waiver of recovery 

of the overpayment.

LEGAL PRECEDENT -- ISSUE 3

Section 10.441 of OWCP’s regulations provides that when an overpayment of 

compensation 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 the 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 hardship.30

ANALYSIS -- ISSUE 3

The Board finds that OWCP properly required recovery of the overpayment by deducting 

$500.00 every 28 days from appellant’s continuing compensation.

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

submitted as well as the factors set forth in section 10.441. As her monthly income exceeded her 

ordinary and necessary expenses by $853.33, OWCP did not abuse its discretion in requiring 

recovery by deducting $500.00 every 28 days from each of her continuing compensation 

payments.31

CONCLUSION

The Board finds that an overpayment of compensation was created in the amount of 

$22,560.44 for the period September 3, 1999 through November 11, 2018. The Board further 

finds that OWCP properly denied waiver of recovery of the overpayment, and properly required 

recovery by deducting $500.00 every 28 days from appellant’s continuing compensation

payments.

 

28 See A.C., supra note 19; see also M.P., Docket No. 18-0902 (issued October 16, 2018).

29 20 C.F.R. § 10.437; see also supra note 20.

30 20 C.F.R. § 10.441; see Steven R. Cofrancesco, 57 ECAB 662 (2006).

31 A.C., supra note 19; see G.C., Docket No. 18-1062 (issued December 4, 2018).
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ORDER

IT IS HEREBY ORDERED THAT the May 23, 2018 decision of the Office of Workers’

Compensation Programs is affirmed.

Issued: June 11, 2019

Washington, DC

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Janice B. Askin, Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board