United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

M.P., Appellant

and

U.S. POSTAL SERVICE, PROCESSING & 

DISTRIBUTION CENTER, Carol Stream, IL, 

Employer

__________________________________________

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Docket No. 18-0902

Issued: October 16, 2018

Appearances: Case Submitted on the Record

Frank Pullano, for the appellant1

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

CHRISTOPHER J. GODFREY, Chief Judge

PATRICIA H. FITZGERALD, Deputy Chief Judge

ALEC J. KOROMILAS, Alternate Judge

JURISDICTION

On March 27, 2018 appellant, through her representative, filed a timely appeal from a 

February 16, 2018 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.

ISSUES

The issue are: (1) whether appellant received an overpayment of wage-loss compensation 

in the amount of $11,249.98 for the period October 31, 2009 through February 1, 2010; 

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

 

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

OWCP properly found that it would recover the overpayment by deducting $72.00 from 

appellant’s continuing compensation payments every 28 days.

FACTUAL HISTORY

On May 7, 2009 appellant, then a 67-year-old mail handler, filed a traumatic injury claim 

(Form CA-1) alleging that, while at work on April 27, 2009, she sustained bilateral knee 

contusions and cervical strain when she tripped and fell. She stopped work on April 27, 2009. 

OWCP accepted the claim, assigned OWCP File No. xxxxxx739, for neck sprain, bilateral knee 

contusions, and bilateral knee and leg sprains.3 

OWCP paid appellant wage-loss compensation for total disability beginning 

June 13, 2009. On August 3, 2009 it advised her that it would pay her wage-loss compensation on 

the periodic rolls, effective August 2, 2009. Additionally, OWCP informed appellant that she 

should report any disability or retirement income and any compensation benefits from a federal 

agency.

By letter dated May 24, 2010, the employing establishment notified OWCP that appellant 

had received an initial separation incentive of $10,000.00 on October 31, 2009 to voluntarily retire 

early.4 On June 9, 2010 it questioned whether OWCP had suspended her wage-loss compensation 

during the period of payment of the separation pay incentive. In a November 29, 2010 letter, the 

employing establishment advised OWCP that it had issued appellant an additional $5,000.00 as a 

second and final payment for her participation in its voluntary early retirement program. 

By letter dated July 14, 2017, OWCP notified appellant of its preliminary determination 

that she received an overpayment of compensation in the amount of $11,249.98 for the period 

October 31, 2009 through a fraction of the day on February 1, 2010 because she received a 

separation pay incentive of $15,000.00 while also receiving wage-loss compensation.5 It 

 

3 OWCP previously accepted appellant’s December 1994 occupational disease claim, assigned File No. xxxxxx062, 

for bilateral carpal tunnel syndrome, bilateral epicondylitis, bilateral trigger thumbs, and bilateral shoulder 

impingement syndrome. It granted her a schedule award for 36 percent permanent impairment of each upper extremity 

under File No. xxxxxx062.

4 The employing establishment indicated that the date appellant received the separation pay incentive was 

October 31, 2010 rather than October 31, 2009, but this appears to be a typographical error.

5 By decision dated June 16, 2017, an OWCP hearing representative found that appellant received an overpayment 

of compensation in the amount of $49,073.13 for the period June 13 to October 31, 2009 and February 10, 2010 

through November 30, 2015 because it failed to offset the portion of her Social Security Administration (SSA) benefits 

from her workers’ compensation attributable to her federal service. The hearing representative found that she was not 

entitled to wage-loss compensation from October 31, 2009 through February 1, 2010 due to her receipt of a separation 

incentive from the employing establishment and instructed OWCP, upon return of the case record, to determine the 

amount of any overpayment for this period. He further found that appellant was at fault in the creation of the 

overpayment from June 13 to August 25, 2009, but without fault of the overpayment created from August 6, 2009 to 

July 20, 2011. The hearing representative denied waiver of the overpayment and set the rate of recovery of the 

overpayment as $390.00 per month from continuing compensation benefits. By decision dated June 26, 2018, the 

Board affirmed in part and set aside in part the June 16, 2017 decision. The Board found that OWCP properly 

determined that appellant received a $49,073.13 overpayment of compensation from June 13 to October 31, 2009 and 

July 1, 2010 through November 30, 2015 and that she was at fault in the creation of the overpayment from June 13 

through August 5, 2009 and July 21, 2011 through August 7, 2015. The Board found, however, that she was without 

fault in the creation of the overpayment from August 17 through November 30, 2015 and remanded the case for 

OWCP to consider waiver and recovery of the overpayment for the appropriate periods. Docket No. 17-1703 (issued 

June 26, 2018).
3

calculated the overpayment by dividing the $15,000.00 voluntary separation incentive by her 

weekly pay rate on the date of injury, a rate of $1,127.37, to find that it equaled 13.31 weeks, or 

93.137 days. OWCP found that appellant received $3,382.11 every 28 days, or $120.79 per day, 

which it multiplied by 93.137 days to find an overpayment of $11,249.98. It determined that she 

was not entitled to wage-loss compensation from October 21, 2009 to February 1, 2010, and thus 

the entire gross amount of $11,249.98 constituted an overpayment of compensation, noting that 

she was responsible for her health and life insurance benefits during this period. OWCP further 

informed appellant of its preliminary finding that she was without fault in the creation of the 

overpayment. It requested that she complete the enclosed overpayment recovery questionnaire 

and submit supporting financial documents so that it could determine whether she was entitled to 

wavier of recovery of the overpayment and set a rate of recovery of the overpayment. Additionally, 

OWCP notified appellant that, within 30 days of the date of the letter, she could request a telephone 

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

Appellant, on July 28, 2017, requested a prerecoupent hearing and wavier of the 

overpayment as it would result in financial hardship. In an accompanying overpayment recovery 

questionnaire (Form OWCP-20), she listed $30.00 in assets. Appellant advised that she had 

monthly income of $3,886.83 and monthly expenses totaling $4,991.75. She listed her monthly 

expenses of $1,428.13 for her mortgage, $172.02 for Dish television, $145.01 for car insurance, 

$18.09 for water, $47.16 for her home telephone, $116.00 for lawn care, $559.95 for a car payment, 

$54.00 for garbage collection, $138.00 on a credit card, $165.76 on a Wells Fargo credit card, 

$40.00 for a mobile telephone, $300.00 for household goods, $69.42 for gas utility which she 

indicated was higher in winter, $253.23 for electricity, $100.00 for medication, $700.00 for food 

including food necessitated by her need for a special diet, $100.00 for gasoline, $60.00 for dog 

food, $10.00 for canine medication, $23.33 for a shot, $40.00 for veterinary treatment, $70.00 

every three months for oil changes, $12.50 for furnace inspections, $12.50 for an air conditioner 

inspection, $6.66 for air conditioner filters, $6.66 for air filters for her automobile, and $390.00 to 

repay an overpayment of compensation. On December 18, 2017 appellant submitted some 

supporting financial documentation. By letter dated December 17, 2017, she advised that she now 

paid $167.62 for automobile insurance and $981.94 for home owner’s insurance. 

Pay stubs received by OWCP on August 8, 2017 indicate that appellant received an initial 

$10,000.00 on October 31, 2009 and $5,000.00 on October 29, 2010 as a total incentive for 

separation effective October 31, 2009. 

During the hearing, held on January 12, 2018, appellant’s representative contended that 

appellant would experience financial hardship attempting to repay the debt. He advised that she 

required lawn care services in order to avoid a fine, and noted that her utility bills fluctuated 

seasonally. The representative indicated that the amount for the shot was for her dog.

By decision dated February 16, 2018, OWCP’s hearing representative determined that 

appellant received an overpayment of compensation in the amount of $11,249.98 for the period 

October 31, 2009 through a fraction of the day on February 1, 2010 because she received wageloss compensation from OWCP and separation pay incentive from the employing establishment. 

She found that appellant was without fault in creating the overpayment, but denied waiver of 

recovery of the overpayment. The hearing representative found reasonable and necessary monthly 
4

expenses of $3,289.34 per month.6 She denied the $559.95 listed for the car payment as there was 

no evidence that it was a recurring monthly expense, noting that the statement showed a car 

payment was made in March 2017 on a 2011 Jeep Liberty, but did not indicate the payoff date. 

The hearing representative further found that appellant had not substantiated monthly lawn care 

expenses as she submitted bills showing only four occasions of lawn care. She further denied pet 

expenses. The hearing representative adjusted water, furnace, air conditioning, and car expenses 

to show monthly premiums and noted that the maximum allowed for household miscellaneous 

expenses was $50.00 per month under OWCP’s procedures. The hearing representative 

determined that appellant had monthly income of $4,035.46, noting that appellant received SSA 

benefits of $1,751.00 and OWCP compensation of $2,108.73 every 28 days after deductions, 

including for an overpayment of compensation, which yielded a monthly OWCP benefit of 

$2,284.46, and a total monthly income of $4,035.46. As this amount exceeded appellant’s monthly 

expenses by more than $50.00, the hearing representative denied waiver of recovery of the 

overpayment. The hearing representative found that the overpayment should be recovered by 

deducting $72.00 from appellant’s continuing compensation payments every 28 days.

On appeal appellant’s representative questions why OWCP’s hearing representative 

disallowed some expenses and asserts that appellant would experience hardship repaying the 

overpayment. He notes that she was not at fault in creating the overpayment and requests waiver.

LEGAL PRECEDENT -- ISSUE 1

Section 8102 of FECA7 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.8 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 may not 

receive salary, pay, or remuneration of any type from the United States, except in limited 

circumstances.9 Section 10.421 of the implementing regulations provide that an employee may 

not receive compensation for total disability concurrently with separation pay (which is also known 

as retirement incentive pay).10 

Employing establishments may offer separation pay or buyouts to encourage employees to 

leave federal employment voluntarily. OWCP’s procedures provide that compensation for 

temporary total disability may not be paid for the period covered by separation pay.11 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 

 

6 The hearing representative found that appellant substantiated monthly expenses of a $1,428.13 for her mortgage, 

$700.00 for food, $163.64 for house and car insurance premiums, $18.09 for water, $54.00 for garbage, $138.00 for 

a Merrick Bank credit card, $165.76 for a Wells Fargo credit card, $40.00 for her cell phone, $47.16 for her home 

phone, $49.31 for gas heat, $180.24 for electricity, $100.00 for medicine, $100.00 for gasoline,, $30.00 for oil changes 

and air filter, $50.00 for miscellaneous and household expenses, and $25.00 for furnace and air conditioner expenses, 

for a total of $3,289.34.

7 Supra note 2.

8 5 U.S.C. § 8102.

9

Id. at § 8116(a).

10 20 C.F.R. § 10.421(c).

11 Federal (FECA) Procedure Manual, Part 2 -- Claims, Dual Benefits, Chapter 2.1000.17c.(1) (June 2009).
5

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

employing establishment has offered separation pay.12 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, effective the date of the separation or retirement.

13

ANALYSIS -- ISSUE 1

The Board finds that appellant received an overpayment of compensation. While receiving 

wage-loss compensation for disability resulting from her employment injury, appellant entered 

into a voluntary retirement incentive agreement with the employing establishment that resulted in 

her receiving an initial payment on October 31, 2009 of $10,000.00 and a subsequent final 

payment of $5,000.00 for her October 31, 2009 separation from employment. Under 5 U.S.C. 

§ 8116 and 20 C.F.R. § 10.421(c), she was not entitled to receive both compensation and 

separation pay concurrently.14 As such, the record establishes that an overpayment of 

compensation was created because appellant’s compensation should have been suspended for the 

number of weeks represented by the separation pay, effective the date of her retirement.

15

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

OWCP calculated the overpayment by dividing the $15,000.00 voluntary separation incentive by 

her weekly pay rate on the date of injury of $1,127.37 to find that it equaled 13.31 weeks, or 93.137 

days. It found that appellant received $3,382.11 every 28 days, or $120.79 per day, which it 

multiplied by 93.137 days to find an overpayment of $11,249.98.

LEGAL PRECEDENT -- ISSUE 2

Section 8129 of FECA provides that an overpayment in compensation shall be recovered 

by OWCP 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.16 Waiver of an overpayment is not permitted unless the claimant is without fault in 

creating the overpayment.17

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 

 

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

13 The Board notes that OWCP’s Chapter 2.1000.17 (April 1996), cited in supra note 11, 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).

14 See supra notes 9 and 10; P.C., Docket No. 14-0860 (issued August 18, 2014).

15 See supra note 13.

16 5 U.S.C. § 8129.

17 Steven R. Cofrancesco, 57 ECAB 662 (2006).
6

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.18 According to 20 C.F.R. § 10.437, 

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 position for the worse.19 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.20

Section 10.438 of OWCP’s regulations provides that 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. Failure 

to submit the requested information within 30 days of the request shall result in denial of waiver.21

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 

recovery 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 resource base as determined by OWCP’s procedures.22

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

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

$3,886.83 and monthly expenses of $4,991.75. The hearing representative determined that 

appellant received monthly income of $1,751.00 from SSA and $2,284.46 from OWCP after 

deductions, including for an overpayment, for a total monthly income of $4,035.46. She excluded 

appellant’s expenses for a car and lawn care as unsubstantiated since she did not provide evidence 

of the duration of the loan or evidence that she paid for lawn care monthly.23 The hearing 

representative further found that expenses related to care for her pet were not ordinary and 

necessary. She determined that appellant’s monthly expenses totaled $3,289.34.

 

18 20 C.F.R. § 10.436. An individual is deemed to need substantially all of his or her monthly income to meet 

current and ordinary living expenses if monthly income does not exceed monthly expenses by more than $50.00. 

Desiderio Martinez, 55 ECAB 245 (2004). 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).

19 Id. at § 10.437(a), (b).

20 Id. at § 10.437(b)(1).

21 Id. at § 10.438.

22 Id. at § 10.436.

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

6.200.6(a)(3) (June 2009).
7

OWCP found that appellant’s monthly income of $4,035.46 and her monthly expenses of 

$3,289.34 yielded a monthly surplus of more than $50.00. An individual is deemed to need 

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

income does not exceed monthly expenses by more than $50.00.24 As appellant’s current income 

exceeds her ordinary and necessary living expenses by more than $50.00, she does not need 

substantially all of her income for ordinary and necessary living expenses.25

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

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

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

hardship attempting to repay the debt.26 Consequently, OWCP properly denied waiver of recovery 

of the overpayment. 

On appeal appellant’s representative maintains that recovery of the overpayment 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.27 Further, as found by the Board, the 

evidence does not demonstrate that appellant would experience financial hardship repaying the 

overpayment. 

Appellant’s representative also questioned OWCP’s hearing representative’s finding that 

some expenses were not necessary. However, the guidelines for determining ordinary and 

necessary expenses are set forth in OWCP’s procedures and the Board has found that the hearing 

representative properly calculated such expenses in this case.

28

 

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.29

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.30

 

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

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

necessary for OWCP to consider whether her assets exceed the allowable resource base. See J.W., Docket No. 16-1355 

(issued January 10, 2017).

26 20 C.F.R. § 10.437; see also D.C., Docket No. 17-0559 (issued June 21, 2018).

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

28 See supra note 25.

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

30 20 C.F.R. § 10.441(a).
8

ANALYSIS -- ISSUE 3

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

appellant. Appellant’s monthly household income totaled $4,035.46 and her expenses totaled 

$3,289.84, equaling a monthly surplus amount of $745.62 per month. The Board finds that OWCP 

properly determined that the rate of recovery should be $72.00 from her continuing compensation 

payments every 28 days.31

CONCLUSION

The Board finds that appellant received an overpayment of wage-loss compensation in the 

amount of $11,249.98 for the period October 31, 2009 through February 1, 2010. The Board 

further finds that OWCP properly determined that she was not entitled to waiver of recovery of 

the overpayment and properly found that it would recover the overpayment by deducting $72.00 

from her continuing compensation payments every 28 days.

ORDER

IT IS HEREBY ORDERED THAT the February 16, 2018 decision of the Office of 

Workers’ Compensation Programs is affirmed.

Issued: October 16, 2018

Washington, DC

Christopher J. Godfrey, Chief Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Alec J. Koromilas, Alternate Judge

Employees’ Compensation Appeals Board

 

31 See D.C., supra note 26.