United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

I.J., Appellant

and

U.S. POSTAL SERVICE, POST OFFICE, 

Santa Ana, CA, Employer

__________________________________________

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Docket No. 19-1672

Issued: March 10, 2020

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

CHRISTOPHER J. GODFREY, Deputy Chief Judge

PATRICIA H. FITZGERALD, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On August 5, 2019 appellant filed a timely appeal from a July 23, 2019 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 OWCP properly determined that appellant received an 

overpayment of compensation in the amount of $8,282.47 for the period February 15, 2013 to 

November 10, 2018 for which she was without fault; (2) whether it properly denied waiver of 

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

 

1 5 U.S.C. § 8101 et seq.

2 The Board notes that following the July 23, 2019 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

overpayment by deducting $250.00 from appellant’s continuing compensation benefits, every 28 

days.

FACTUAL HISTORY

In July 2006, OWCP accepted that appellant, then a 37-year-old clerk, sustained a 

depressive disorder and generalized anxiety disorder due to various incidents and conditions at 

work. Appellant stopped work on November 2, 2009 and received wage-loss compensation 

benefits for disability from work on the daily rolls commencing that date and on the periodic rolls 

commencing January 17, 2010.

On December 19, 2013 the Office of Personnel Management (OPM) advised OWCP that 

appellant was eligible to continue coverage under the Federal Employees’ Group Life Insurance 

(FEGLI) Program. It further notified OWCP that appellant had elected postretirement basic life 

insurance (PRBLI) coverage (with no reduction), basic life insurance (BLI) coverage, and optional 

life insurance (OLI) coverage (Option A, B, and C with no reduction) effective February 15, 2013. 

OPM noted that the deductions for BLI and OLI should be made based on appellant’s annual salary 

of $53,102.00.

3

By notice dated January 18, 2019, OWCP advised appellant of its preliminary 

determination that she had received an overpayment of compensation in the amount of $8,282.47 

because PRBLI, BLI, and OLI premiums had not been properly deducted from her compensation 

payments for the period February 15, 2013 to November 10, 2018. It summarized its calculation 

of the overpayment and advised appellant that she was without fault in its creation. OWCP 

requested that appellant complete an overpayment recovery questionnaire (Form OWCP-20) and 

submit supporting financial documents within 30 days of the date of the letter. Additionally, it 

notified her 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. 

OWCP provided compensation payment records for the period February 15, 2013 to 

November 10, 2018, as well as overpayment worksheets explaining the $8,282.47 overpayment. 

It provided calculations showing shortfalls in deductions for the periods February 15 to 

November 16, 2013 ($1,157.78), November 17, 2013 to January 9, 2016 ($3,009.88), and 

January 10, 2016 to November 10, 2018 ($4,114.81). The worksheets show that these shortages 

for the period February 15, 2013 to November 10, 2018 occurred because no deductions were 

made for PRBLI and improper deductions were made for BLI and OLI due to use of an incorrect 

figure for appellant’s adjusted annual salary of $52,526.00, instead of the proper figure of 

$53,102.00. The total of these deduction shortages is $8,282.47. 

On January 30, 2019 appellant requested a prerecoupment hearing with a representative of 

OWCP’s Branch of Hearings and Review. She did not challenge the fact or amount of the 

$8,282.47 overpayment, but she requested waiver of recovery of the overpayment. Appellant 

submitted a Form OWCP-20, completed on January 30, 2019, noting that she had $7,451.00 in 

 

3

In a December 6, 2018 letter, OWCP advised appellant that proper deductions for PRBLI, BLI, and OLI premiums 

would be made for the period of her next wage-loss compensation payment, i.e., the period commencing 

November 11, 2018.
3

monthly income. She also listed monthly expenses of $4,319.03 and assets of $201.00

(checking/saving account balances).

4

During the telephonic hearing, held on June 4, 2019, appellant testified that her monthly 

income of $7,451.00 was comprised of her husband’s salary and her FECA compensation benefits. 

She discussed her monthly expenses for rent, mortgage, property tax, food, clothing, utilities, 

insurance (home, life, and car), child support, and miscellaneous items (car fuel, internet/

television, and cleaning/hygiene).5 Appellant also provided testimony regarding her minimum 

monthly payments of debts for two cars, bank loans, and bills from several retailers.6 After the 

hearing, she submitted documentation relating to some of her claimed monthly expenses.

By decision dated July 23, 2019, OWCP’s hearing representative finalized the preliminary 

determination that appellant received an overpayment of compensation in the amount of $8,282.47,

for which she was without fault. She determined that appellant did not qualify for waiver of 

recovery of the overpayment as her monthly income exceeded her monthly expenses by more than 

$50.00. The hearing representative found that she had monthly income of $7,451.00. She also 

determined that appellant had monthly expenses of $6,276.66 comprised of $4,507.06 for rent, 

mortgage, property tax, food, clothing, utilities, insurance, child support, and miscellaneous items

and $1,769.60 for monthly minimum payments related to debts for two cars, bank loans, and bills 

from several retailers.

The hearing representative explained that appellant’s monthly payments for trailer-related 

expenses, time share payments, car wash membership, gun shield law insurance, and Netflix fees 

would not be included in her monthly expenses because they were not considered to be ordinary 

and necessary living expenses under FECA.7 She indicated that appellant referenced a loan in the 

amount of $25,753.07 and a credit card balance of $19,079.43, but that she had not explained the 

reasons for these debts or identified minimum monthly payments for them. The hearing 

representative discussed appellant’s disposable monthly income and directed recovery of the 

overpayment by deducting $250.00 every 28 days from her continuing compensation payments.

LEGAL PRECEDENT -- ISSUE 1

Under the FEGLI Program, most civilian employees of the federal government are eligible 

to participate in BLI and one or more of the options.8 The coverage for BLI is effective unless 

 

4 Appellant submitted documents relating to some of her monthly expenses. She also submitted a federal tax form 

for 2017 (Form 1040) listing salaries/wages of $78,080.00.

5 The total amount of these claimed monthly expenses was $4,507.06. Appellant also provided monthly figures for 

trailer-related expenses, time share payments, car wash membership, gun shield law insurance, and Netflix fees.

6 Appellant also referenced a loan in the amount of $25,753.07 and a Visa balance of $19,079.43.

7 The hearing representative indicated that appellant claimed that she had a $160.00 monthly minimum payment 

for Costco purchases, but that she did not provide documentation for this claimed monthly expense and therefore it 

would not be included in the total.

8 5 U.S.C. § 8702(a).
4

waived,9and premiums for BLI and OLI coverage are withheld from the employee’s pay.10 Upon 

retirement or upon separation from the employing establishment or being placed on the FECA 

periodic compensation rolls, an employee may choose to continue BLI and OLI coverage in which 

case the schedule of deductions made will be used to withhold premiums from his or her annuity 

or compensation payments.11 BLI coverage shall be continued without cost to an employee who 

retired or began receiving compensation on or before December 31, 1989;

12 however, the 

employee is responsible for payment of premiums for OLI coverage which is accomplished by 

authorizing withholdings from his or her compensation.13

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).14

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.15 Any 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.16 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.17

 

9

Id. at § 8702(b).

10 Id. at § 8707.

11 Id. at § 8706.

12 Id. at § 8707(b)(2).

13 Id. at § 8706(b)(3)(B). See B.B., Docket No. 17-1733 (issued March 26, 2018).

14 See C.A., Docket No. 18-1284 (issued April 15, 2019); James J. Conway, Docket No. 04-2047 (issued 

May 20, 2005).

15 5 C.F.R. § 870.504(a)(1).

16 Id. at § 870.504(b).

17 5 U.S.C. § 8707(d); see also B.B., supra note 13.
5

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.18 When 

an overpayment 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.19

ANALYSIS -- ISSUE 1

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation in the amount of $8,282.47 for which she was without fault. 

OPM notified OWCP that appellant had elected PRBLI, BLI, and OLI coverage effective 

February 15, 2013. OWCP, however, did not deduct the proper amounts of premiums for PRBLI, 

BLI, and OLI from appellant’s wage-loss compensation benefits for the period February 15, 2013 

to November 10, 2018. It calculated the amount of the resulting overpayment as $8,282.47. The 

record contains compensation payment records, as well as overpayment worksheets explaining the 

overpayment calculation and how the overpayment occurred. As noted, 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.20 

The Board finds that OWCP properly calculated the amount of the overpayment and 

provided a clear and detailed explanation of the fact and amount of the overpayment. As OWCP 

failed to properly deduct PRBLI, BLI, and OLI premiums for the period February 15, 2013 to 

November 10, 2018, appellant received an overpayment of compensation of $8,282.47 during this 

period.

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.”

21

 Section 10.438 of OWCP 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.22

 

18 5 U.S.C. § 8102(a).

19 Id. at § 8129(a).

20 See id. at 8102.

21 Id. at § 8129.

22 20 C.F.R. § 10.438.
6

The guidelines for determining whether recovery of an overpayment would defeat the 

purpose of FECA or would be against equity and good conscience are set forth in sections 10.434 

to 10.437 of OWCP’s regulations.23

Section 10.436 provides that 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 current 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.24 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

OWCP procedures provide that the assets must not exceed a resource base of $6,200.00 for 

an individual or $10,300.00 for an individual with a spouse or dependent plus $1,200.00 for each 

additional dependent.26 An individual’s liquid assets include, but are not limited to, cash and the 

value of stocks, bonds, saving accounts, mutual funds, and certificates of deposit. 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, furnishings/supplies, vehicle(s) above the two allowed per immediate 

family, retirement account balances (such as Thrift Savings Plan or 401(k)), jewelry, and 

artwork.

27

ANALYSIS -- ISSUE 2

The Board finds that OWCP properly denied waiver of recovery of the overpayment.

As OWCP found appellant without fault in the creation of the overpayment, waiver must 

be considered, and repayment is still required unless adjustment or recovery of the overpayment 

would defeat the purpose of FECA or be against equity and good conscience.28

Appellant has not established that recovery of the overpayment would defeat the purpose 

of FECA because she has not shown both that she needs substantially all of her current income to 

meet ordinary and necessary living expenses and that her assets do not exceed the allowable 

resource base. Appellant’s monthly income of $7,451.00 exceeds her monthly ordinary and 

necessary expenses of $6,276.66 by $1,174.34. The Board notes that OWCP’s hearing 

representative properly excluded claimed monthly expenses which did not constitute ordinary and 

 

23 Id. at §§ 10.434-10.437.

24 Id. at § 10.436.

25 Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Final Overpayment Determinations, Chapter 

6.400.4a(3) (September 2018).

26 Id. at Chapter 6.400.4a(2).

27 Id. at Chapter 6.400.4b(3)(a), (b).

28 See supra note 22.
7

necessary living expenses or which were not adequately documented.29 As appellant’s current 

income exceeds her current ordinary and necessary living expenses by more than $50.00, appellant 

has not shown that she needs substantially all of her current income to meet current ordinary and 

necessary living expenses.30 Because appellant has not met the first prong of the two-prong test 

of whether recovery of the overpayment would defeat the purpose of FECA, it is unnecessary for 

OWCP to consider the second prong of the test, i.e., whether appellant’s assets do not exceed the 

allowable resource base.

Appellant also has not established that recovery of the overpayment would be against 

equity and good conscience because she has not shown, for the reasons noted above, that she would 

experience severe financial hardship in attempting to repay the debt or that she relinquished a 

valuable right or changed her position for the worse in reliance on the payment which created the 

overpayment.31

Because appellant has not established that recovery of the overpayment would defeat the 

purpose of FECA or be against equity and good conscience, she has failed to establish that OWCP 

acted improperly by denying waiver of recovery of the $8,282.47 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.32 Section 

10.441(a) of the regulations33 provides: 

“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.”

34

 

29 See supra note 26 at Chapter 6.400.4b(2). The hearing representative indicated that appellant referenced a loan 

in the amount of $25,753.07 and a credit card balance of $19,079.43, but she did not explain the reasons for these 

debts or identify minimum monthly payments for them. She also noted that appellant claimed a $160.00 monthly 

minimum payment for Costco but that she did not document this expense.

30 See supra note 26.

31 See L.D., Docket No. 18-1317 (issued April 17, 2019); William J. Murphy, 41 ECAB 569, 571-72 (1989).

32 C.A., supra note 15; Lorenzo Rodriguez, 51 ECAB 295 (2000); Albert Pineiro, 51 ECAB 310 (2000).

33 20 C.F.R. § 10.441(a). 

34 Id.
8

ANALYSIS -- ISSUE 3

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

$250.00 from appellant’s continuing compensation benefits, every 28 days.

The record supports that, in requiring repayment of the overpayment by deducting $250.00 

from appellant’s compensation payments every 28 days, OWCP took into consideration the 

financial information submitted by appellant as well as the factors set forth in section 10.441 and 

found that this method of recovery would minimize resulting hardship on appellant. Therefore, 

OWCP properly required recovery of the overpayment by deducting $250.00 from appellant’s 

compensation payments, every 28 days.

CONCLUSION

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation in the amount of $8,282.47 for the period February 15, 2013 to November 10, 

2018 for which she was without fault. The Board further finds that OWCP properly denied waiver 

of recovery of the overpayment, and properly required recovery of the overpayment by deducting 

$250.00 from appellant’s continuing compensation benefits, every 28 days.

ORDER

IT IS HEREBY ORDERED THAT the July 23, 2019 decision of the Office of Workers’

Compensation Programs is affirmed.

Issued: March 10, 2020

Washington, DC

Christopher J. Godfrey, Deputy Chief Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Alternate Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board