United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

T.D., Appellant

and

U.S. POSTAL SERVICE, POST OFFICE, 

Jenkintown, PA, Employer

__________________________________________

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Docket No. 20-0972

Issued: January 28, 2021

Appearances: Case Submitted on the Record

Alan J. Shapiro, Esq., for the appellant1

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

ALEC J. KOROMILAS, Chief Judge

JANICE B. ASKIN, Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On April 1, 2020 appellant, through counsel, filed a timely appeal from a March 12, 2020 

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.3

 

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.

3 The Board notes that following the March 12, 2020 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

ISSUES

The issues are: (1) whether appellant has met her burden of proof to establish greater than 

three percent permanent impairment of her left upper extremity; (2) whether appellant received an 

overpayment of compensation in the amount of $9,175.92 for the period March 13 through June 7, 

2008, for which she was not at fault; (3) whether OWCP properly denied appellant’s request for 

waiver of recovery of the overpayment; and (4) whether OWCP properly required recovery of the 

overpayment by deducting $300.00 from appellant’s continuing compensation payments every 28 

days.

FACTUAL HISTORY

On March 13, 2006 appellant, then a 40-year-old letter carrier, filed an occupational 

disease claim (Form CA-2) alleging a left shoulder injury due to carrying a mailbag on her left 

shoulder while delivering mail at work. OWCP accepted her claim for rotator cuff tear of the left 

shoulder and, on January 4, 2007, appellant underwent OWCP-authorized arthroscopic left rotator 

cuff repair. It paid her wage-loss compensation on the supplemental rolls for disability from work 

commencing January 4, 2007.

On August 17, 2015 appellant filed a claim for a schedule award (Form CA-7) due to her 

accepted employment condition. 

Appellant submitted an October 1, 2015 report from Dr. Nicholas Diamond, an osteopath 

Board-certified in physical medicine and rehabilitation, who determined that appellant had 13 

percent permanent impairment of her left upper extremity under the standards of the sixth edition 

of the American Medical Association, Guides to the Evaluation of Permanent Impairment 

(A.M.A., Guides).4 Dr. Diamond applied the range of motion (ROM) method of evaluating 

permanent impairment by utilizing Table 15-34 on page 475. He found ratable deficits upon 

flexion, abduction, and internal rotation.

On April 28, 2016 OWCP referred appellant’s case to Dr. David Garelick, a Boardcertified orthopedic surgeon serving as an OWCP district medical adviser (DMA). It requested 

that he review Dr. Diamond’s October 1, 2015 report and provide an opinion on permanent 

impairment under the sixth edition of the A.M.A., Guides. In an April 28, 2016 report,

Dr. Garelick utilized the diagnosis-based impairment (DBI) rating method to find that, under Table 

15-5 (Shoulder Regional Grid), page 403, the class of diagnosis (CDX) for appellant’s left rotator 

cuff tear resulted in a class 1 impairment with a default value of five percent. He derived a grade 

modifier for functional history (GMFH), grade modifier for physical examination (GMPE), and 

grade modifier for clinical studies (GMCS). Dr. Garelick utilized the net adjustment formula, 

(GMFH - CDX) + (GMPE - CDX) + (GMCS - CDX), which resulted in a grade E or seven percent 

permanent impairment of the left upper extremity.5 He recommended against using Dr. Diamond’s 

rating because it was based on ROM.

 

4 A.M.A., Guides (6th ed. 2009).

5 Dr. Garelick did not identify the specific grade modifier values he used in the net adjustment formula.
3

By decision dated July 14, 2016, OWCP granted a schedule award for seven percent 

permanent impairment of her left upper extremity. The award ran for 21.84 weeks from January 8 

to June 8, 2008 and was based on the April 28, 2016 report of Dr. Garelick. 

On July 15, 2016 appellant, through counsel, requested a telephonic hearing before a 

representative of OWCP’s Branch of Hearings and Review. Prior to a hearing being held, OWCP’s 

hearing representative issued a January 4, 2017 decision setting aside the July 14, 2016 decision 

and remanding the case to OWCP for further consideration by Dr. Garelick of the validity of

Dr. Diamond’s permanent impairment rating under the ROM method. On remand, OWCP referred 

the case back to Dr. Garelick in his role as DMA and, on January 13, 2017, Dr. Garelick essentially 

reiterated his prior opinion in which he expressed his preference for utilizing the DBI rating 

method over the ROM method to evaluate permanent impairment.

OWCP determined that a second opinion examination regarding appellant’s permanent 

impairment was necessary. On January 27, 2017 it referred appellant for this purpose to

Dr. Willie E. Thompson, a Board-certified orthopedic surgeon. In a report dated February 24, 

2017, Dr. Thompson determined that appellant had 12 percent permanent impairment of her left 

upper extremity under the ROM rating method of the sixth edition of the A.M.A., Guides. 

However, he did not list ROM findings for appellant’s left shoulder and he noted that an objective 

evaluation of appellant’s left shoulder was difficult due to her exaggerated responses to all 

measures of examination.

On July 9, 2017 OWCP referred appellant’s case to Dr. Todd Fellars, a Board-certified 

orthopedic surgeon serving as a DMA, and requested that he review Dr. Thompson’s report and 

provide an opinion on permanent impairment. In a July 11, 2017 report, Dr. Fellars indicated that 

he could not calculate an impairment rating for appellant’s left upper extremity utilizing the ROM 

rating method because Dr. Thompson did not list ROM findings. However, he utilized the DBI 

rating method to find that, under Table 15-5, the CDX for appellant’s left rotator cuff tear resulted 

in a class 1 impairment with a default value of five percent. Dr. Fellars derived a GMCS of 2 due 

to the moderate pathology seen in the studies. He could not include a score for GMFH due to 

appellant’s unreliable pain behavior and could not include a score for GMPE due to her minimal 

participation in the examination. He utilized the net adjustment formula, (GMFH - CDX) = (2 –

1) = +1, which resulted in a grade D or six percent permanent impairment of the left upper 

extremity.

By decision dated September 21, 2017, OWCP determined that appellant had not met her 

burden of proof to establish greater than seven percent permanent impairment of her left upper 

extremity, for which she previously received a schedule award. 

Following an additional request for a telephonic hearing, OWCP’s hearing representative 

issued a decision on May 25, 2018 which set aside the September 21, 2017 decision and remanded 

the case to OWCP for an additional examination to include a complete ROM measurement

evaluation, either by Dr. Thompson or another second opinion physician. On July 17, 2018 OWCP 

referred appellant for a second opinion examination with Dr. Noubar Didizian, a Board-certified 

orthopedic surgeon, in order to further evaluate permanent impairment. 

In an August 8, 2018 report, Dr. Didizian reported physical examination findings, noting 

that, when he asked appellant to move her left shoulder actively, she was highly erratic,
4

noncompliant, and nonphysiologic. He attempted to test appellant’s left shoulder ROM three times

for each type of motion, but indicated that “the numbers were just too erratic to be able to record 

anything to make any sense.” Dr. Didizian recorded other physical examination findings, noting 

no muscle weakness or peripheral nerve involvement in the left upper extremity. He then 

addressed appellant’s permanent impairment, noting that a ROM impairment rating was not 

possible “because of noncompliance.” Dr. Didizian utilized the DBI rating method to find that, 

under Table 15-5, the CDX for appellant’s left rotator cuff tear resulted in a class 1 impairment 

with a default value of five percent (available for cases of objective residual loss with normal 

motion). He derived a GMFH of 1 (based on QuickDASH score of 21), GMPE of 2, and GMCS 

of 2. Dr. Didizian utilized the net adjustment formula, (GMFH - CDX) + (GMPE - CDX) + 

(GMCS - CDX) = (1-1) + (2-1) + (2-1) = +2, which resulted in a grade E or seven percent 

permanent impairment of the left upper extremity. 

On November 21, 2018 OWCP referred appellant’s case to Dr. Kevin Kuhn, a Boardcertified orthopedic surgeon serving as a DMA, for further evaluation of permanent impairment. 

In a November 26, 2018 report, Dr. Kuhn cited appellant’s nonphysiologic responses on 

examination and noted that a permanent impairment rating evaluation under the ROM rating 

method would be invalid. He utilized the DBI rating method to find that, under Table 15-5, the 

CDX for appellant’s left rotator cuff tear resulted in a class 1 impairment with a default value of 

three percent (residuals symptoms without consistent objective findings). Dr. Kuhn calculated a 

GMFH of 1 (based on QuickDASH score of 21), GMPE of 0 (based on inconsistent findings), and 

GMCS of 2 (based on moderate findings). He utilized the net adjustment formula, (GMFH - CDX) 

+ (GMPE - CDX) + (GMCS - CDX) = (1-1) + (0-1) + (2-1) = +0, which he indicated resulted in a 

grade D or four percent permanent impairment of the left upper extremity. 

By decision dated January 23, 2019, OWCP determined that appellant had not met her 

burden of proof to establish greater than seven percent permanent impairment of her left upper 

extremity, for which she previously received a schedule award.

Following another request for a telephonic hearing, OWCP’s hearing representative issued 

a decision on July 9, 2019 which set aside the January 23, 2019 decision and remanded the case to 

OWCP in order to request an opinion from Dr. Didizian regarding Dr. Kuhn’s November 26, 2018 

impairment rating. 

On August 15, 2019 OWCP requested that Dr. Didizian review Dr. Kuhn’s November 26, 

2018 impairment rating and provide an opinion on the permanent impairment rating provided 

therein. In a September 4, 2019 report, Dr. Didizian noted that he concurred with Dr. Kuhn’s 

assessment of appellant’s CDX and grade modifiers as provided in his November 26, 2018 report. 

He indicated that, under Table 15-5, the CDX for appellant’s left rotator cuff tear resulted in a 

class 1 impairment with a default value of three percent (residuals symptoms without consistent 

objective findings). Dr. Didizian derived a GMFH of 1 (based on QuickDASH score of 21), 

GMPE of 0 (based on inconsistent findings), and GMCS of 2 (based on moderate findings). He 

utilized the net adjustment formula, (GMFH - CDX) + (GMPE - CDX) + (GMCS - CDX) = (1-1) 

+ (0-1) + (2-1) = +0, which resulted in no movement from the grade C default value of three 

percent permanent impairment of the left upper extremity. Dr. Didizian indicated that Dr. Kuhn 

used the same grade modifiers in his November 26, 2018 report, but advised that he improperly 

noted a net adjustment of +1, thereby resulting in a grade D or four percent permanent impairment 

of the left upper extremity.
5

On September 18, 2019 OWCP referred appellant’s case back to Dr. Kuhn in order for him 

to comment on Dr. Didizian’s September 4, 2019 report. In an October 17, 2019 report, Dr. Kuhn 

concurred with Dr. Didizian’s assessment that appellant had three percent permanent impairment 

of her left upper extremity. He provided a net adjustment formula calculation, (GMFH - CDX) + 

(GMPE - CDX) + (GMCS - CDX) = (1-1) + (0-1) + (2-1) = +0, and thereby acknowledged that he 

had previously erred when he inadvertently calculated a net adjustment of +1. Dr. Kuhn repeated 

his earlier opinion, provided on November 26, 2018, that appellant’s nonphysiologic responses on 

examination by Didizian meant that a permanent impairment rating evaluation under the ROM 

rating method would be invalid. 

By decision dated October 22, 2019, OWCP determined that, based on the opinions of

Dr. Didizian and Dr. Kuhn, appellant only had three percent permanent impairment of her left 

upper extremity. It found that, as appellant was previously paid a schedule award for seven percent 

permanent impairment of her left upper extremity, the medical evidence did not support an increase 

in the permanent impairment already compensated. OWCP indicated, “Additionally, an 

overpayment for 4 percent of the Left Upper Extremity will be pursued. You will receive separate

correspondence regarding this.”

In an October 25, 2019 notice, OWCP advised appellant of its preliminary determination 

that she received a $9,175.92 overpayment of compensation for the period March 13 through 

June 7, 2008.

6

 It also made a preliminary determination that she was not at fault in the creation of 

the overpayment. OWCP advised appellant that she could submit evidence challenging the fact or 

amount of the overpayment, or request waiver of recovery of the overpayment. It informed her

that she could submit additional evidence in writing or at prerecoupment hearing, but that a 

prerecoupment hearing must be requested within 30 days of the date of the written notice of 

overpayment. OWCP requested that appellant complete and return an overpayment recovery 

questionnaire (Form OWCP-20) within 30 days even if she was not requesting waiver of recovery 

of the overpayment. It requested that she submit supporting financial documentation, including 

copies of income tax returns, bank account statements, bills, pay slips, and any other records to 

support income and expenses. OWCP advised appellant that it would deny waiver of recovery of 

the overpayment if she failed to furnish the requested financial information within 30 days.

On October 31, 2019 appellant, through counsel, requested a telephonic hearing before a 

representative of OWCP’s Branch of Hearings and Review with respect to OWCP’s October 22, 

2019 schedule award decision. 

On November 6, 2019 appellant requested a prerecoupment hearing before a representative 

of OWCP’s Branch of Hearings and Review regarding the claimed overpayment. She disagreed 

that the overpayment occurred and requested waiver of recovery of the overpayment. In an 

overpayment recovery questionnaire, signed on November 20, 2019, appellant reported $3,146.12 

in monthly income, $2,690.00 in the monthly expenses, and $255.00 in assets (cash, checking 

account, and savings account). Appellant’s monthly expenses consisted of $1,000.00 for 

 

6 The case record contains payment records and worksheets showing that appellant received $15,827.63 in schedule 

award payments for seven percent permanent impairment of her left upper extremity and that she would have received 

$6,651.71 in schedule award payments if she had been properly paid for three percent permanent impairment of her 

left upper extremity.
6

rent/mortgage, $300.00 for food, $200.00 for utilities, $440.00 for credit card payments, and 

$750.00 for miscellaneous expenses.

During a February 10, 2019 hearing addressing both the schedule award and overpayment 

matters, counsel indicated that he disagreed with OWCP’s assessment that appellant only had three 

percent permanent impairment of her left upper extremity. He generally argued that principles of 

stare decisis and res judicata prevented OWCP’s declaration of an overpayment. Appellant 

provided testimony regarding her monthly expenses, noting that she had $87,000.00 in her Thrift 

Savings Plan (TSP) account.

By decision dated March 12, 2020, OWCP’s hearing representative affirmed the 

October 22, 2019 decision finding that appellant had no greater than three percent permanent 

impairment of her left upper extremity, noting that the determination was properly based on the 

opinions of Dr. Didizian and Dr. Kuhn. She found that appellant received an overpayment of 

compensation in the amount of $9,175.92 for the period March 13 through June 7, 2008, for which 

she was not at fault. The hearing representative determined that although appellant was not at fault 

in the creation of the overpayment, the overpayment was not subject to waiver because appellant’s 

monthly income exceeded her monthly expenses by more than $50.00 and her assets exceeded the 

allowable resource base. She noted that payment documents in the case record showed that 

appellant had income of $3,118.16 every 28 days, which equaled $3,378.01 per month, and that it 

was accepted that she had monthly expenses of $2,690.00, as reported on her overpayment 

recovery questionnaire. Appellant also had $87,000.00 in assets in her TSP account. The hearing 

representative required recovery of the overpayment by deducting $300.00 from appellant’s 

continuing compensation payments every 28 days.7

LEGAL PRECEDENT -- ISSUE 1

The schedule award provision of FECA,8and its implementing federal regulation,9set forth 

the number of weeks of compensation payable to employees sustaining permanent impairment 

from loss, or loss of use, of scheduled members or functions of the body. However, FECA does 

not specify the manner in which the percentage of loss shall be determined. For consistent results 

and to ensure equal justice under the law for all claimants, OWCP has adopted the A.M.A., Guides 

as the uniform standard applicable to all claimants.10 As of May 1, 2009, the sixth edition of the 

A.M.A., Guides is used to calculate schedule awards.11

 

7 The case record contains a second decision dated March 12, 2020 of OWCP’s hearing representative which 

contains similar language, but it appears to be a draft decision.

8 5 U.S.C. § 8107.

9 20 C.F.R. § 10.404.

10 Id.

11 Federal (FECA) Procedure Manual, Part 2 -- Claims, Schedule Award and Permanent Disability Claims, Chapter 

2.808.5a (March 2017); Federal (FECA) Procedure Manual, Part 3 -- Medical, Schedule Awards, Chapter 3.700.2 and 

Exhibit 1 (January 2010).
7

In determining impairment for the upper extremities under the sixth edition of the A.M.A., 

Guides, an evaluator must establish the appropriate diagnosis for each part of the upper extremity 

to be rated. With respect to the shoulder, the relevant portion of the arm for the present case, 

reference is made to Table 15-5 (Shoulder Regional Grid) beginning on page 401. After the CDX 

is determined from the Shoulder Regional Grid (including identification of a default grade value), 

the net adjustment formula is applied using the GMFH, GMPE, and GMCS. The net adjustment 

formula is (GMFH - CDX) + (GMPE - CDX) + (GMCS - CDX).12 Under Chapter 2.3, evaluators 

are directed to provide reasons for their impairment rating choices, including choices of diagnoses 

from regional grids and calculations of modifier scores.13

ANALYSIS -- ISSUE 1

The Board finds that appellant has not met her burden of proof to establish greater than 

three percent permanent impairment of her left upper extremity.

The Boards find that the opinions of Dr. Didizian, OWCP’s referral physician, and

Dr. Kuhn, the DMA, show that appellant only has three percent permanent impairment of her left 

upper extremity under the sixth edition of the A.M.A., Guides. The Board notes that it was proper 

for OWCP to refer appellant to Dr. Didizian due to the deficiencies of reports produced by prior 

OWCP referral physicians 

In an August 8, 2018 report, Dr. Didizian reported physical examination findings, noting 

that, when he asked appellant to move her left shoulder actively, she was highly erratic, 

noncompliant, and nonphysiologic. He attempted to test appellant’s left shoulder ROM three times 

for each type of motion, but indicated that “the numbers were just too erratic to be able to record 

anything to make any sense.” Dr. Didizian recorded other physical examination findings, noting 

no muscle weakness or peripheral nerve involvement in the left upper extremity. He then 

addressed appellant’s permanent impairment, noting that a ROM impairment rating was not 

possible “because of noncompliance.” Dr. Didizian utilized the DBI rating method of Table 15-5 

to find that appellant had seven percent permanent impairment of her left upper extremity.

14

In a November 26, 2018 report, Dr. Kuhn cited appellant’s nonphysiologic responses on 

examination and noted that a permanent impairment rating evaluation under the ROM rating 

method would be invalid. He utilized the DBI rating method to find that, under Table 15-5, the 

CDX for appellant’s left rotator cuff tear resulted in a class 1 impairment with a default value of 

three percent (residuals symptoms without consistent objective findings). Dr. Kuhn calculated a 

GMFH of 1 (based on QuickDASH score of 21), GMPE of 0 (based on inconsistent findings), and 

GMCS of 2 (based on moderate findings). He utilized the net adjustment formula, (GMFH - CDX) 

 

12 See A.M.A., Guides (6th ed. 2009) 405-12. Table 15-5 also provides that, if motion loss is present for a claimant 

with certain diagnosed conditions, permanent impairment may alternatively be assessed using Section 15.7 (ROM 

impairment). Such a ROM rating stands alone and is not combined with a DBI rating. Id. at 401-05, 475-78.

13 Id. at 23-28.

14 A.M.A., Guides 403, Table 15-5.
8

+ (GMPE - CDX) + (GMCS - CDX) = (1-1) + (0-1) + (2-1) = +0, which he indicated resulted in a 

grade D or four percent permanent impairment of the left upper extremity.15

In a September 4, 2019 report, Dr. Didizian noted that he concurred with Dr. Kuhn’s 

assessment of appellant’s CDX and grade modifiers as provided in his November 26, 2018 report. 

He indicated that, under Table 15-5, the CDX for appellant’s left rotator cuff tear resulted in a 

class 1 impairment with a default value of three percent (residuals symptoms without consistent 

objective findings). Dr. Didizian derived a GMFH of 1 (based on QuickDASH score of 21), 

GMPE of 0 (based on inconsistent findings), and GMCS of 2 (based on moderate findings). He 

utilized the net adjustment formula, (GMFH - CDX) + (GMPE - CDX) + (GMCS - CDX) = (1-1) 

+ (0-1) + (2-1) = +0, which resulted in no movement from the grade C default value of three 

percent permanent impairment of the left upper extremity. Dr. Didizian indicated that Dr. Kuhn 

used the same grade modifiers in his November 26, 2018 report, but advised that he improperly 

noted a net adjustment of +1, thereby resulting in a grade D or four percent permanent impairment 

of the left upper extremity. In an October 17, 2019 report, Dr. Kuhn concurred with Dr. Didizian’s 

assessment that appellant had three percent permanent impairment of her left upper extremity. He 

acknowledged that he had previously erred when he inadvertently calculated a net adjustment of 

+1. Dr. Kuhn repeated his earlier opinion, provided on November 26, 2018, that appellant’s 

nonphysiologic responses on examination by Dr. Didizian meant that a permanent impairment 

rating evaluation under the ROM rating method would be invalid.

The Board finds that both Dr. Didizian and Dr. Kuhn ultimately properly applied the DBI 

rating method under standards of the sixth edition of the A.M.A, Guides to determine that appellant 

had three percent permanent impairment of her left upper extremity. Although Dr. Didizian 

previously used the DBI rating method to determine that appellant had seven percent permanent 

impairment of her left upper extremity, he had inappropriately used a level of class 1 impairing 

diagnosis, found at Table 15-5, for individuals with objective residual loss and normal motion. He 

later appropriately rated appellant under a level of class 1 impairing diagnosis for individuals, such 

as appellant, with residual symptoms without consistent objective findings.16 In addition,

Dr. Kuhn acknowledged that he had previously erred when he inadvertently calculated a net 

adjustment of +1, instead of the proper net adjustment of +0.17 Both physicians properly 

determined that it was not possible to use the ROM rating method due to the fact that appellant 

consistently provided invalid ROM findings.18 As such, the Board finds that appellant has no more 

than three percent permanent impairment of her left upper extremity.

Appellant may request a schedule award or increased schedule award at any time based on 

evidence of a new exposure or medical evidence showing progression of an employment-related 

condition resulting in permanent impairment or increased impairment.

 

15 See supra note 12.

16 A.M.A., Guides 403, Table 15-5.

17 See supra note 12. 

18 A.M.A., Guides 464 (providing detailed procedures for obtaining valid ROM findings).
9

LEGAL PRECEDENT -- ISSUE 2

Section 8102(a) of FECA19 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.20 Section 8129(a) of FECA provides, in pertinent part:

“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.”

21

If a claimant received a schedule award and the medical evidence does not support the

degree of permanent impairment awarded, an overpayment of compensation may be created.22 

Claims for an increased schedule award based on the same edition of the A.M.A., Guides are 

subject to overpayment.23

ANALYSIS -- ISSUE 2

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

$9,175.92 for the period March 13 through June 7, 2008, for which she was not at fault.

In the present case, appellant received $15,827.63 in schedule award compensation for 

seven percent permanent impairment of her left upper extremity. However, for the reasons 

explained above, appellant was only entitled to receive $6,651.71 in schedule award compensation 

for three percent permanent impairment of her left upper extremity. The difference between these 

two amounts, $9,175.92, constitutes an overpayment. As noted above, OWCP’s procedures allow 

for the declaration of such an overpayment as both awards were calculated under the same edition 

of the A.M.A., Guides.

24

 Therefore, OWCP properly determined that appellant received a 

$9,175.92 overpayment.

 

19 Supra note 2.

20 Id. at § 8102(a).

21 Id. at § 8129(a).

22 Federal (FECA) Procedure Manual, Part 2 -- Claims, Schedule Awards and Permanent Disability Claims, Chapter 

2.808.9(e) (February 2013).

23 Id. See also W.M., Docket No. 13-0291 (issued June 12, 2013).

24 See notes 23 and 24. Counsel generally argued that principles of stare decisis and res judicata prevented OWCP’s 

declaration of an overpayment, but he did not provide support for this argument.
10

LEGAL PRECEDENT -- ISSUE 3

The waiver or refusal to waive an overpayment of compensation by OWCP is a matter that 

rests within OWCP’s discretion pursuant to statutory guidelines.25 Section 8129 of FECA26

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.27

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 

OWCP from data provided by the Bureau of Labor Statistics.28 An individual’s liquid assets 

include, but are not limited to, cash on hand, the value of stocks, bonds, savings accounts, mutual 

funds, and certificates of deposits. 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 TSP

or 401(k)), jewelry, and artwork.29

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 

or her position for the worse.30 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.31

 

25 See L.D., Docket No. 18-1317 (issued April 17, 2019); P.J., Docket No. 18-0248 (issued August 14, 2018); 

Robert Atchison, 41 ECAB 83, 87 (1989).

26 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).

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

28 20 C.F.R. § 10.436. OWCP’s procedures provide that a claimant is deemed to need substantially all of his or her 

current net income to meet current ordinary and necessary living expenses if monthly income does not exceed monthly 

expenses by more than $50.00. Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment 

Determinations, Chapter 6.400.4a(3) (September 2018). OWCP’s procedures further provide that 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. Id. at Chapter 6.400.4a(2).

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

30 20 C.F.R. § 10.437(a), (b).

31 Id. at § 10.437(b)(1).
11

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 

of recovery of the overpayment.32

ANALYSIS -- ISSUE 3

The Board finds that OWCP properly denied appellant’s request for waiver of recovery of 

the overpayment.

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. The Board notes that the case record reflects that appellant has $87,000.00 in assets 

in her TSP account, an amount which exceeds the allowable resource base of $11,500.00 for an 

individual, such as appellant, who has two dependents within the meaning of FECA.33 As 

appellant’s current assets exceed the allowable resource base, she has not established that recovery 

of the overpayment would defeat the purpose of FECA.

34

 Because appellant has not met the 

second 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 first prong of the test, i.e., whether 

she needs substantially all of her current income to meet current ordinary and necessary living 

expenses.

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.35

Because appellant has failed to establish that recovery of the overpayment would defeat 

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

abused its discretion by refusing to waive recovery of the overpayment.

 

32 Id. at § 10.438.

33 See supra note 29. The case record also reflects that appellant has monthly income of $3,378.01 and monthly 

expenses of $2,690.00.

34 See id.

35 See L.D., Docket No. 18-1317 (issued April 17, 2019); William J. Murphy, 41 ECAB 569, 571-72 (1989).
12

LEGAL PRECEDENT -- ISSUE 4

The Board’s jurisdiction over recovery of an overpayment is limited to reviewing those 

cases where OWCP seeks recovery from continuing compensation under FECA.36 Section 10.441 

of Title 20 of the Code of Federal Regulations provides that if an overpayment of compensation 

has been made to one entitled to future payments, proper adjustment shall be made by decreasing 

subsequent 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.”

37

 When an individual fails to provide the 

requested information on income, expenses and assets, OWCP should follow minimum collection 

guidelines, which state in general that government claims should be collected in full and that, if an 

installment plan is accepted, the installments should be large enough to collect the debt promptly.38

ANALYSIS -- ISSUE 4

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

$300.00 from her continuing compensation payments every 28 days.

The record supports that, in requiring recovery of the overpayment by deducting $300.00 

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 any resulting hardship on appellant.39 OWCP 

followed minimum collection guidelines by requiring installments large enough to collect the full 

debt promptly. Therefore, the Board finds that it properly required recovery of the overpayment 

by deducting $300.00 from appellant’s continuing compensation payments every 28 days.

CONCLUSION

The Board finds that appellant has not met her burden of proof to establish greater than 

three percent permanent impairment of her left upper extremity. The Board also finds that 

appellant received an overpayment of compensation in the amount of $9,175.92 for the period 

March 13 through June 7, 2008, for which she was not at fault. The Board further finds that OWCP 

properly denied appellant’s request for waiver of recovery of the overpayment and properly 

required recovery of the overpayment by deducting $300.00 from her continuing compensation 

payments every 28 days.

 

36 R.W., Docket No. 19-0451 (issued August 7, 2019); C.A., Docket No. 18-1284 (issued April 15, 2019); Albert 

Pinero, 51 ECAB 310 (2000); Lorenzo Rodriguez, 51 ECAB 295 (2000).

37 20 C.F.R. § 10.441; see A.F., Docket No. 19-0054 (issued June 12, 2019); Donald R. Schueler, 39 ECAB 1056, 

1062 (1988).

38 R.O., Docket No. 18-0076 (issued August 3, 2018); Gail M. Roe, 47 ECAB 268 (1995).

39 OWCP’s hearing representative noted that appellant had monthly income of $3,378.01, monthly expenses of 

$2,690.00, and assets of $87,000.00.
13

ORDER

IT IS HEREBY ORDERED THAT the March 12, 2020 decision of the Office of 

Workers’ Compensation Programs is affirmed.

Issued: January 28, 2021

Washington, DC

Alec J. Koromilas, Chief Judge

Employees’ Compensation Appeals Board

Janice B. Askin, Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board