United States Department of Labor

Employees’ Compensation Appeals Board

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D.G., Appellant

and

DEPARTMENT OF HOMELAND SECURITY, 

IMMIGRATION & CUSTOMS 

ENFORCEMENT, Boston, MA, Employer

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Docket No. 17-1614

Issued: July 3, 2019

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 July 20, 2017 appellant filed a timely appeal from a June 28, 2017 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 a $3,256.30 overpayment of compensation 

during the period October 16 through November 12, 2016; and (2) whether OWCP properly 

 

1 5 U.S.C. § 8102(a). 

2 The Board notes that, following the June 28, 2017 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 evidence for 

the first time on appeal. Id.
2

determined that appellant was at fault in the creation of the overpayment, thereby precluding 

waiver of recovery of the overpayment. 

FACTUAL HISTORY

On March 25, 2013 appellant, then a 48-year-old secretary, filed a traumatic injury claim 

(Form CA-1) alleging that on March 25, 2013 she stood up from a stool, and when she went to sit 

down again, the stool moved and she fell to the floor and hit her head while in the performance of 

duty. She stopped work as of the date of the incident.

OWCP initially accepted appellant’s claim for sprain of the neck and rotator cuff syndrome 

of the left shoulder and allied disorders. It subsequently expanded acceptance of her claim to 

include partial tear of the left rotator cuff and temporary aggravation of degenerative disc disease 

of the cervical spine. 

Appellant stopped work on the date of the injury and received continuation of pay from 

March 26 to May 9, 2013. OWCP paid her compensation benefits on the periodic rolls as of 

May 10, 2013. On June 27, 2013 appellant underwent a left shoulder arthroscopic subacromial 

decompression, distal clavicle resection, and debridement of rotator cuff. On May 13, 2014 she

had a C7 selective nerve root block. Appellant returned to work in a light-duty capacity, working 

four hours a day on January 27, 2014. On April 8, 2014 she stopped work and OWCP resumed 

compensation payments.

By decision dated September 22, 2016, OWCP terminated appellant’s wage-loss 

compensation effective October 16, 2016 finding that the weight of the medical evidence of record 

established that she was no longer disabled from work as a result of the accepted March 25, 2013 

employment injury. It noted that the decision did not affect appellant’s entitlement to medical 

benefits. On September 29, 2016 OWCP reissued this decision with appeal rights.

On September 29, 2016 appellant signed a form electing retirement benefits through Office 

of Personnel Management (OPM) in lieu of compensation under FECA. On November 22, 2016 

she signed a separate form noting the election. Both forms listed the effective date of appellant’s 

election as October 16, 2016.3

In a letter dated December 28, 2016, OWCP informed appellant that it had made a 

preliminary determination that she was overpaid in the amount of $3,256.30 because her FECA 

wage-loss benefits had been terminated and she elected OPM benefits effective October 16, 2016,

but she received payment on the periodic rolls through November 12, 2016. It also noted that it 

appeared that appellant was at fault in the creation of this overpayment because she accepted a 

payment that she knew or reasonably should have known was incorrect. OWCP provided an 

overpayment action request and overpayment recovery questionnaire (OWCP-20). It afforded 

appellant 30 days to respond.

 

3 By letter dated November 15, 2016, OWCP informed OPM that appellant elected to receive retirement benefits 

from OPM effective October 16, 2016 in lieu of compensation benefits from FECA. It requested that OPM reimburse 

it for $3,274.00 for the benefits it had paid appellant for the period October 16 to November 12, 2016.
3

On January 13, 2017 appellant requested a telephone conference with an OWCP hearing 

representative with regard to the issues of fault and possible waiver of the overpayment. She noted 

that OWCP had sought repayment from OPM regarding this alleged overpayment and therefore 

she was not at fault in the creation of the overpayment. Appellant also related that OPM had not 

yet paid her annuity benefits.

By letter dated April 26, 2017, a claims examiner for OWCP informed appellant that she 

tried to contact appellant regarding the pending overpayment in her case, but that the call would 

not go through. She informed appellant that a decision on the overpayment would be deferred for 

10 days to afford her the opportunity to contact OWCP and then a decision would be issued based 

upon the evidence of record.

Appellant submitted answers to the overpayment recovery questionnaire noting a monthly 

income of $4,390.74. She listed one dependent, a 19 year-old child. Appellant listed monthly 

expenses of $1,410.90 and monthly payment on loans as $575.00. She forwarded to OWCP 

supporting documentation with regard to her expenses.

By decision dated June 28, 2017, OWCP finalized the preliminary overpayment 

determination, finding that appellant received an overpayment of compensation in the amount of 

$3,256.30, and that appellant was at fault in the creation of the overpayment as she knowingly 

accepted compensation to which she was not entitled. 

LEGAL PRECEDENT -- ISSUE 1

Section 8102 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 A claimant is only entitled to receive wage-loss compensation due to 

disability for those periods during which his or her work-related medical condition prevents him 

or her from earning the wages earned before the work-related injury.5

ANALYSIS -- ISSUE 1

OWCP terminated appellant’s wage-loss compensation benefits by decision dated 

September 29, 2016, effective October 16, 2016. A review of the record indicates that on 

September 29, 2016 appellant elected to receive retirement benefits from OPM, effective 

October 16, 2016. However, on November 12, 2016, OWCP issued appellant compensation for 

wage loss for the period October 16 through November 12, 2016. Since it had terminated 

appellant’s wage-loss compensation benefits effective October 16, 2016, appellant was clearly not 

entitled to receive compensation benefits after that date. As appellant received $3,256.30 in FECA 

benefits for the period October 16 to November 12, 2016, the Board finds that an overpayment of 

compensation in that amount was created.

 

4 5 U.S.C. § 8102(a).

5 20 C.F.R. § 10.500; see also E.S., Docket No. 17-0718 (issued August 23, 2017).
4

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.6 Section 10.433(a) of OWCP regulations provides that in determining whether 

a claimant is at fault, it will consider all pertinent circumstances. An individual is with fault in the 

creation of an overpayment who:

“(1) Made an incorrect statement as to a material fact which he knew or should have 

known to be incorrect, or 

“(2) Failed to provide information which he or she knew or should have known to 

be material; or 

“(3) Accepted a payment which he or she knew or should have known to be 

incorrect.”

7

The Board has held that an employee who receives payments from OWCP in the form of 

a direct electronic deposit may not be at fault the first time incorrect funds are deposited into his 

or her account, as the acceptance of the resulting overpayment lacks the requisite knowledge.8 The 

Board has also held in cases involving a series of incorrect payments, where the requisite 

knowledge is established by a letter or telephone call from OWCP or simply with the passage of 

time and a greater opportunity for discovery, the claimant will be at fault for accepting the 

payments subsequently deposited.9 Previous cases have held that receiving one erroneous direct 

deposit payment does not necessarily create the requisite knowledge to find that a claimant was at 

fault in the creation of the overpayment.10

ANALYSIS -- ISSUE 2

OWCP determined that appellant was at fault in the creation of the overpayment because 

she accepted a payment that she knew or should have known was incorrect. The Board finds, 

however, that OWCP failed to establish that, at the time she accepted the initial (and sole) payment 

of compensation, appellant knew or reasonably should have known the payment was incorrect. 

As discussed, in cases where a claimant receives compensation through direct deposit, 

OWCP must establish that, at that time, a claimant received the direct deposit in question that he 

 

6 5 U.S.C. § 8129(b).

7 20 C.F.R. § 10.433(a). 

8 See Tammy Craven, 57 ECAB 689 (2006). 

9 B.K., Docket No. 17-1562 (issued October 27, 2017). 

10 V.S., Docket No. 13-1278 (issued October 23, 2013).
5

or she knew or should have known that the payment was incorrect.11 The Board has held that an 

employee who receives payments from OWCP in the form of a direct deposit may not be at fault 

for the first incorrect deposit into his or her account since the acceptance of the overpayment, at 

the time of receipt of the direct deposit, lacks the requisite knowledge.12 Because fault is defined 

by what the claimant knew or should have known at the time of acceptance, one of the 

consequences of electronic fund transfers is that a claimant lacks the requisite knowledge at the 

time of the first incorrect payment.13 Whether or not OWCP determines that an individual is at 

fault with respect to the creation of an overpayment depends on the circumstances surrounding the 

overpayment.14 It is not appropriate, however, to make a finding that a claimant has accepted an 

overpayment via direct deposit until such time as a reasonable person would have been aware that 

this overpayment had occurred. This awareness could be established either through documentation

such as a bank statement or notification from OWCP or where a reasonable period of time has 

passed during which a claimant could have reviewed independent confirmation of the incorrect 

payment.15 

Appellant received wage-loss compensation by direct deposit every 28 days. The evidence 

of record does not establish that, as of the first direct deposit of compensation on November 12, 

2016 that appellant knew or should have known that she was accepting a direct deposit to which 

she was not entitled. There is no documentation or other evidence to demonstrate that appellant 

had knowledge at the time she received a direct deposit from OWCP that the payment was 

incorrect, or that a reasonable period of time passed during which she could have reviewed bank 

statements or been informed of the incorrect payment. Therefore, she is not at fault in the 

acceptance of the direct deposit covering the overpayment from October 16 through 

November 12, 2016. 

The Board will reverse OWCP’s finding of fault, and remand the case for consideration of 

whether appellant is entitled to a waiver of recovery of the overpayment.16 A finding of no fault, 

however, does not mean that the claimant may keep the money, only that OWCP must consider 

eligibility for waiver for this period and the case must be remanded for it to determine whether 

appellant is entitled to waiver for this period. After such further development as OWCP may find 

necessary, it should issue an appropriate decision on the issue of whether the overpayment should 

be waived for the relevant portion of the October 16, 2016 direct deposit.

 

11 See C.K., Docket No. 12-0746 (issued May 1, 2012).

12 See supra note 8; see also George A. Hirsch, 47 ECAB 520 (1996). 

13 Id.

14 Id.; see also K.D., Docket No. 13-0451 (issued April 12, 2013). 

15 See K.H., Docket No. 06-0191 (issued October 30, 2006). 

16 The Board rejects appellant’s argument that as she received a letter indicating that OWCP was seeking 

reimbursement from OPM, that she reasonably believed that she was entitled to the additional compensation payment.

As noted OWCP clearly terminated appellant’s compensation effective October 16, 2016. 
6

CONCLUSION

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

of compensation in the amount of $3,256.30 because she received FECA benefits for the period 

October 16 through November 12, 2016, after her wage-loss benefits were terminated and she 

elected receipt of OPM benefits. The Board further finds that OWCP improperly determined that 

appellant was at fault in the creation of the overpayment of compensation. The case shall be 

remanded for consideration of waiver of recovery of the overpayment. 

ORDER

IT IS HEREBY ORDERED THAT the decision of the June 28, 2017 decision of the 

Office of Workers’ Compensation Programs is affirmed in part and reversed in part, and that case 

is remanded for further action consistent with this decision. 

Issued: July 3, 2019

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