United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

K.E., Appellant

and

U.S. POSTAL SERVICE, POST OFFICE, 

Frankfurt, IL, Employer

__________________________________________

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Docket No. 18-0687

Issued: October 25, 2018

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

ALEC J. KOROMILAS, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On February 12, 2018 appellant filed a timely appeal from a January 24, 2018 merit 

decision of the Office of Workers’ Compensation Programs (OWCP).1 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 issues are: (1) whether OWCP properly determined that appellant received an 

overpayment of compensation in the amount of $504.06 during the period October 10 to 14, 2017; 

and (2) whether OWCP properly determined that appellant was at fault in the creation of the 

overpayment of compensation, thereby precluding waiver of recovery of the overpayment.

 

1 Appellant indicated on the AB-1 form that she was appealing from a January 29, 2018 OWCP decision. The 

Board notes, however, that the record does not contain an adverse final decision issued by OWCP on that date. The 

only final adverse decision within the Board’s jurisdiction is the January 24, 2018 merit decision. 

2 5 U.S.C. § 8101 et seq.
2

FACTUAL HISTORY

On July 6, 2015 appellant, then a 54-year-old rural letter carrier, filed an occupational 

disease claim (Form CA-2) alleging left hand carpal tunnel syndrome and trigger finger in the 

performance of her federal employment duties.

3

 On October 9, 2015 OWCP accepted the claim 

for left carpal tunnel syndrome and paid appellant wage-loss compensation and medical benefits

on the supplemental rolls as of July 15, 2016. 

On July 26, 2017 OWCP expanded acceptance of appellant’s claim to include left middle 

trigger finger. It authorized a tenovaginectomy and reconstruction of the A1 pulley of the left 

middle finger performed by Dr. James D. Schlenker, a Board-certified orthopedic hand surgeon,

on August 11, 2017. OWCP paid supplemental rolls payments for temporary total disability from

August 12 to September 16, 2017. 

On September 26, 2017 OWCP placed appellant on the periodic rolls and paid her 

temporary total disability compensation in the net amount of $2,822.76 from September 17 

through October 14, 2017. Appellant received the $2,822.76 direct deposit by electronic funds 

transfer (EFT) on October 14, 2017, representing her compensation for the period September 17 

to October 14, 2017. 

OWCP, by letter dated September 29, 2017, notified appellant of her continuing 

compensation payments and her responsibility to return to work if she no longer was totally 

disabled. To minimize the possibility of an overpayment of compensation, she was instructed to 

notify OWCP immediately when she went back to work. For payments sent by EFT, a notification 

of the date and amount of payment appeared on the statement from appellant’s financial institution. 

Appellant was expected to monitor her EFT deposits carefully, at least every two weeks. If she 

worked for any portion of the period for which a deposit was made, she was to advise OWCP 

immediately so that the overpayment could be collected. OWCP noted that appellant’s first 

payment would be for the period September 2 to 16, 2017 in the net amount of $1,512.19.

On October 19, 2017 appellant informed OWCP by telephone that she had returned to parttime, limited-duty work for the employing establishment on October 10, 2017. 

By letter dated November 8, 2017, OWCP advised appellant of its preliminary 

determination that she received a $504.06 overpayment of compensation for the period October 10 

to 14, 2017 because she continued to receive total disability compensation after her return to parttime, limited-duty work on October 10, 2017. It also made a preliminary finding that she was at 

fault in creating the overpayment because she was aware or should have been reasonably aware 

 

3 Appellant has a prior claim, in which OWCP accepted that she sustained right thumb trigger finger; right radial 

styloid tenosynovitis, right carpal tunnel syndrome, and right hand and thumb localized primary osteoarthritis on or 

after September 11, 2012 due to delivering and sorting mail. OWCP assigned that claim OWCP File No. xxxxxx899. 

On March 20, 2015 appellant underwent authorized right carpal tunnel release, tenovaginectomy of the first dorsal 

compartment, flap reconstruction of the retinacular pulley, right thumb tenovaginectomy of the annular pulley, 

resection arthroplasty with tendon implant of the trapeziometacarpal joint, reconstruction of the volar ligament with 

flexor carpi radialis tendon transfer, and bone graft of the metacarpal. OWCP File No. xxxxxx899 has been 

administratively combined with the present claim, OWCP File No. xxxxxx382, with File No. xxxxxx382, serving as 

the master file.
3

that it had incorrectly paid compensation. OWCP advised appellant that she could submit evidence 

challenging the fact, amount, or finding of fault and request waiver of recovery of the overpayment. 

Additionally, it informed her that, within 30 days, she could request a telephone conference, a final 

decision based on the written evidence, or a prerecoupment hearing. OWCP requested that 

appellant complete the enclosed overpayment recovery questionnaire (Form OWCP-20) and 

submit supporting financial documents. 

The record includes OWCP computer print-outs of overpayment worksheets indicating that 

appellant returned to part-time, limited-duty work on October 10, 2017. The worksheets contained 

calculations showing that from September 17 to October 14, 2017 she received compensation in 

the net amount of $2,822.76, when she was entitled to only the net amount of $2,318.70 for the 

period September 17 to October 9, 2017. This yielded an overpayment of compensation in the 

amount of $504.06 for the period October 10 to 14, 2017.

On November 21, 2017 OWCP received appellant’s November 16, 2017 overpayment 

recovery questionnaire, which listed monthly income, monthly expenses, and additional funds. 

Appellant requested that OWCP make a decision based on the written evidence regarding the 

issues of fault and possible waiver of recovery of the overpayment. 

By decision dated January 24, 2018, OWCP finalized the overpayment determination that 

an overpayment of compensation in the amount of $504.06 was created for the period October 10 

to 14, 2017 for which appellant was with fault as she had accepted compensation payments she 

knew or reasonably should have known she was not entitled. It requested that she repay the full 

amount of $504.06 within 30 days.

LEGAL PRECEDENT -- ISSUE 1

Section 8102(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 his duty.4 Section 8129(a) of FECA provides, in pertinent part, that when an 

overpayment has been made to an individual under this subchapter 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 an individual is entitled.5

Section 8116(a) of FECA provides that, while an employee is receiving compensation or 

if he or she has been paid a lump sum in commutation of installment payments until the expiration 

of the period during which the installment payments would have continued, the employee may not 

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

instances.6 Section 10.500 of OWCP’s regulations provides that compensation for wage loss due 

to disability is available only for any periods during which an employee’s work-related medical 

 

4 5 U.S.C. § 8102(a).

5

Id. at § 8129(a).

6

Id. at § 8116(a). 
4

condition prevents him or her from earning the wages earned before the work-related injury.7 A 

claimant is not entitled to receive temporary total disability (TTD) benefits and actual earnings for

the same time period.8 OWCP procedures provide that an overpayment of compensation is created 

when a claimant returns to work, but continues to receive wage-loss compensation for TTD.9

ANALYSIS -- ISSUE 1

The Board finds that appellant received an overpayment of compensation in the amount of 

$504.06 for the period October 10 to 14, 2017.

The evidence of record shows that appellant returned to part-time, limited-duty work for 

the employing establishment on October 10, 2017, but continued to receive TTD compensation on 

the periodic rolls through October 14, 2017. 

As noted above, a claimant is not entitled to receive compensation for total disability during 

a period in which he or she had actual earnings.10 Therefore, an overpayment of compensation 

was created in this case.11

Appellant received disability compensation in the net amount of $2,822.76 for the period

September 17 to October 14, 2017, but she was only entitled to the net amount of $2,318.70 for 

the period September 17 to October 9, 2017. This yielded an overpayment of compensation in the 

amount of $504.06 for the period October 10 to 14, 2017. Thus, the Board finds that appellant 

received an overpayment of compensation in the amount of $504.06 during the period October 10 

to 14, 2017.12 Appellant has not challenged either the fact or amount of overpayment.

LEGAL PRECEDENT -- ISSUE 2

5 U.S.C. § 8129(b) provides that adjustment or recovery by the United States may not be 

made when incorrect payment has been made to an individual who is without fault and when 

adjustment or recovery would defeat the purpose of this subchapter or would be against equity and 

good conscience.13 A claimant who is at fault in the creation of the overpayment is not entitled to 

waiver.14 On the issue of fault, 20 C.F.R. § 10.433(a) provides that an individual is with fault in 

 

7 20 C.F.R. § 10.500(a).

8 See M.S., Docket No. 16-0289 (issued April 21, 2016); L.S., 59 ECAB 350, 352-53 (2008).

9 B.H., Docket No. 09-0292 (issued September 1, 2009); Federal (FECA) Procedure Manual, Part 6 -- Debt 

Management, Initial Overpayment Actions, Chapter 6.200.2(a) (May 2004).

10 See supra notes 7 and 8.

11 See supra note 9.

12 A.J., Docket No. 17-0622 (issued August 9, 2017).

13 5 U.S.C. § 8129(b).

14 Gregg B. Manston, 45 ECAB 344, 354 (1994).
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the creation of an overpayment who: (1) made an incorrect statement as to a material fact which 

the individual knew or should have known to be incorrect; or (2) failed to furnish information 

which the individual knew or should have known to be material; or (3) with respect to the overpaid 

individual only, accepted a payment which the individual knew or should have been expected to 

know was incorrect.15

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

direct 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.16 It is not 

appropriate to make a finding that a claimant has accepted an overpayment through direct deposit 

until such a time as a reasonable person would have been aware that this overpayment had 

occurred.17 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.18 Previous cases have held that receiving one or two 

erroneous direct deposit payments does not necessarily create the requisite knowledge to find that 

a claimant was at fault in the creation of the overpayment.19

ANALYSIS -- ISSUE 2

OWCP applied the third standard, as set forth above, and 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 it failed to establish that appellant

knew or should have known that the initial payment she received after she resumed work on 

October 10, 2017 was erroneous.

In cases where a claimant receives compensation through direct deposit, OWCP must 

establish that at the time a claimant received the direct deposit in question that he or she knew or 

should have known that the payment was incorrect.20 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.21 Because fault is defined by what the 

claimant knew or should have known at the time of acceptance, one of the consequences of EFT

 

15 20 C.F.R. § 10.433. See Kenneth E. Rush, 51 ECAB 116, 118 (1999).

16 D.B., Docket No. 15-0258 (issued February 1, 2016).

17 P.L., Docket No. 16-0127 (issued May 3, 2016).

18 Tammy Craven, 57 ECAB 689, 693 (2006).

19 V.S., Docket No. 13-1278 (issued October 23, 2015).

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

21 Supra note 18.
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is that the claimant lacks the requisite knowledge at the time of the first incorrect payment.22 

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.23 It is inappropriate, 

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.24

OWCP paid appellant compensation by EFT every 28 days. Appellant returned to work 

on October 10, 2017. On October 14, 2017 OWCP paid her compensation for the period 

September 17 through October 14, 2017. There is no documentation or other evidence to 

demonstrate that appellant had clear knowledge at the time the bank received the October 14, 2017 

direct deposit that a portion of the payment was incorrect.25 The Board thus finds that appellant 

was without fault in accepting the initial direct deposit covering the period of the overpayment 

October 10 through 14, 2017.

The Board finds that the case is not in posture for decision regarding the issue of waiver of 

recovery of the overpayment for the period October 10 through 14, 2017. The Board will set aside 

the January 24, 2018 decision regarding the issue of fault for this period and remand the case for 

OWCP to determine whether appellant is entitled to waiver of recovery of the overpayment 

covering the period October 10 through 14, 2017.

CONCLUSION

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

of compensation in the amount of $504.06 for the period October 10 to 14, 2017. The Board 

further finds that appellant was without fault for the period of the overpayment from October 10 

to 14, 2017. The case will be remanded for OWCP to consider waiver of recovery of the 

overpayment from October 10 to 14, 2017.

 

22 Id.

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

24 See V.S., supra note 19.

25 See M.M., Docket No. 15-0265 (issued May 27, 2015); Danny E. Haley, 56 ECAB 393 (2005).
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ORDER

IT IS HEREBY ORDERED THAT the January 24, 2018 decision of the Office of 

Workers’ Compensation Programs is affirmed in part and set aside in part. The case is remanded 

for further proceedings consistent with this decision of the Board.

Issued: October 25, 2018

Washington, DC

Patricia H. Fitzgerald, Deputy 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