United States Department of Labor

Employees’ Compensation Appeals Board

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R.K., Appellant

and

U.S. POSTAL SERVICE, POST OFFICE, 

Baltimore, MD, Employer

__________________________________________

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Docket No. 20-1322

Issued: May 27, 2021

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

ALEC J. KOROMILAS, Chief Judge

PATRICIA H. FITZGERALD, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On June 22, 2020 appellant filed a timely appeal from an April 28, 2020 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 $68,988.07 because she continued to receive 

FECA wage-loss compensation for the period July 22, 2018 through February 29, 2020 following 

 

1 5 U.S.C. § 8101 et seq.

2 The Board notes that, following the April 28, 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 evidence for 

the first time on appeal. Id. 
2

the termination of her benefits; and (2) whether it properly determined that appellant was at fault 

in the creation of the overpayment, thereby precluding waiver of recovery of the overpayment.

FACTUAL HISTORY

On December 16, 1989 appellant, then a 36-year-old letter sorter, filed an occupational 

disease claim (Form CA-2) alleging that she sustained bilateral hand conditions due to the

repetitive use of her hands while the performance of duty. OWCP accepted her claim for bilateral

hand and wrist tenosynovitis, bilateral carpal tunnel syndrome, left lateral epicondylitis, right 

elbow and forearm sprain, and strain of an unspecified muscle, fascia and tendon at the right wrist 

and hand level. The record reflects that OWCP paid appellant wage-loss compensation on the 

periodic rolls as of February 2, 2002.

On June 4, 2018 OWCP issued appellant a proposed notice of termination of her wage-loss 

compensation and medical benefits, as the weight of the evidence established that she no longer 

had any employment-related residuals or disability due to her accepted employment injuries. It 

afforded her 30 days to submit additional evidence or argument if she disagreed with the proposed 

termination. No response was received.

By decision dated July 6, 2018, OWCP terminated appellant’s wage-loss compensation 

and medical benefits, effective July 22, 2018. However, it continued to pay her wage-loss 

compensation benefits.3

On July 13, 2018 appellant requested an oral hearing before a representative of OWCP’s

Branch of Hearings and Review. The hearing was held on December 20, 2018. By decision dated 

March 6, 2019, OWCP’s hearing representative affirmed OWCP’s July 6, 2018 termination 

decision.

A compensation termination record dated March 12, 2020 reflects that appellant received 

an overpayment of compensation for the period July 22, 2018 through February 29, 2020. It 

indicated that OWCP had not terminated appellant’s compensation as ordered in its July 6, 2018 

decision. A March 27, 2020 compensation payment history sheet documented that OWCP 

continued to pay appellant wage-loss compensation from July 22, 2018 through February 29, 2020

and calculated that the overpayment totaled $68,988.07.

A March 13, 2020 OWCP intra-office memorandum indicated that appellant was overpaid 

because OWCP did not terminate her compensation as ordered in its July 6, 2018 termination 

decision. It included information about her compensation payments from July 22, 2018 through 

February 29, 2020 and calculated that she received an overpayment of $68,988.07. 

On March 27, 2020 OWCP issued a preliminary overpayment determination and

memorandum, which indicated that appellant was overpaid for the period July 22, 2018 through 

 

3 On August 18, 2018 appellant received a payment via electronic funds transfer (EFT) in the amount of $3,249.00 

for the period July 22 through August 18, 2018. On September15, 2018 she received a payment via EFT in the amount 

of $3,249.00 for the period August 19 through September 15, 2018. OWCP continued to pay appellant compensation 

on the periodic rolls through February 29, 2020.
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February 29, 2020 because it continued to pay her compensation after its July 6, 2018 decision 

terminating appellant’s compensation, effective July 22, 2018. It calculated that she received an 

overpayment of $68,988.07. OWCP further advised that it found that appellant was at fault in the 

creation of the overpayment because she accepted payments that she knew or reasonably should 

have known to be incorrect. It requested that she complete the enclosed overpayment recovery 

questionnaire (Form OWCP-20) and submit supporting financial documentation. 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. No 

information was received.

By decision dated April 28, 2020, OWCP finalized the preliminary overpayment 

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

of $68,988.07, for the period July 22, 2018 through February 29, 2020, because it continued to pay 

her wage-loss compensation through February 29, 2020 despite terminating appellant’s 

compensation benefits in its July 6, 2018 decision, effective July 22, 2018. It found that she was 

at fault in the creation of the overpayment because she accepted payment that she knew or should 

have known to be incorrect. OWCP explained that appellant received a compensation payment 

deposited by EFT and over 30 days had elapsed since the deposit was made. It additionally stated 

that she should have known that the payment was incorrect because the dates overlapped with a 

period she worked, specifically August 18, 2018 through February 1, 2020, and more recently 

February 29, 2020. OWCP required recovery of the overpayment by requesting that appellant 

forward the full amount of the overpayment within 30 days of the date of the decision.

LEGAL PRECEDENT -- ISSUE 1

Section 8102 of FECA 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.4

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 or she may 

not receive salary, pay, or remuneration of any type from the United States, except in limited 

circumstances.5 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 condition prevents him or her from earning the wages earned before the work-related 

injury.6

Section 8129(a) of FECA provides that, when an overpayment of compensation has been 

made to an individual because of an error of fact or law, adjustment shall be made under regulations 

 

4 Supra note 1 at § 8102.

5

Id. at § 8116(a).

6 20 C.F.R. § 10.500(a).
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prescribed by the Secretary of Labor by decreasing later payments to which the individual is 

entitled.7

ANALYSIS -- ISSUE 1

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

of compensation in the amount of $68,988.07 for the period July 22, 2018 through February 29, 

2020 because she continued to receive wage-loss compensation through February 29, 2020 after

her compensation benefits were terminated by OWCP effective July 22, 2018. 

The record reflects that OWCP terminated appellant’s wage-loss compensation and 

medical benefits in its decision dated July 6, 2018, effective July 22, 2018, and an OWCP hearing 

representative affirmed its decision on March 6, 2019. However, appellant continued to receive 

wage-loss compensation on the periodic rolls from July 22, 2018 through February 29, 2020. 

Thus, the record establishes that she received an overpayment of FECA wage-loss compensation

for the period July 22, 2018 through February 29, 2020.

OWCP calculated that appellant was overpaid $68,988.07 for the period July 22, 2018 

through February 29, 2020. The Board has reviewed OWCP’s March 27, 2020 overpayment 

memorandum, which provided calculations for the above-noted overpayment and finds that an

overpayment of compensation in the amount of $68,988.07 was created for the period July 22, 

2018 through February 29, 2020. 

LEGAL PRECEDENT -- ISSUE 2

5 U.S.C. § 8129(b) provides: “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 FECA or would be against equity and good 

conscience.”

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 A claimant who is at fault in the creation of the overpayment is not entitled to 

waiver.9 On the issue of fault 20 C.F.R. § 10.433(a) provides that an individual will be found at 

fault if he or she has done any of the following: (1) made an incorrect statement as to a material 

fact, which he or she knew or should have known to be incorrect; (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 was incorrect.10

Section 10.433(b) of OWCP’s regulations provides that whether or not an individual was 

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

 

7 5 U.S.C. § 8129(a).

8

Id. at § 8129(b).

9 See K.P., Docket No. 19-1151 (issued March 18, 2020); R.G., Docket No. 18-1251 (issued November 26, 2019); 

C.Y., Docket No. 18-0263 (issued September 14, 2018).

10 20 C.F.R. § 10.433(a).
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the overpayment. The degree of care expected may vary with the complexity of those 

circumstances and the individual’s capacity to realize that he or she is being overpaid.11

ANALYSIS -- ISSUE 2

The Board finds that appellant was not at fault in creation of the overpayment for the period 

July 22 through August 18, 2018.

In cases where a claimant receives compensation through direct deposit, the Board has held 

that 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.12 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.13 Because fault is defined 

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

consequences of EFT is that the claimant lacks the requisite knowledge at the time of the first 

incorrect payment.14 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.15 

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.16

On August 18, 2018 OWCP paid appellant wage-loss compensation in the amount of

$3,249.00 for the period July 22 through August 18, 2018, even though her entitlement to 

compensation benefits had been terminated as of July 22, 2018. The evidence of record does not 

establish that, on the date of the first direct deposit of compensation following the termination of 

her compensation, appellant knew or should have known that she was accepting a direct deposit 

to which she was not entitled. The record does not contain documentation or other evidence to 

demonstrate that appellant had knowledge at the time of the August 18, 2018 direct deposit 

covering the initial period July 22 through August 18, 2018 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. Thus, the Board finds that, when the initial direct deposit was 

made, appellant had no knowledge that this direct deposit was incorrect. Appellant, therefore, 

cannot be found to be at fault in the acceptance of the initial August 18, 2018 direct deposit. The 

 

11 Id. at § 10.433(b); see also D.M., Docket No. 17-0983 (issued August 3, 2018).

12 S.N., Docket No. 19-1018 (issued November 12, 2019). See Claude T. Green, 42 ECAB 174, 278 (1990).

13 K.K., Docket No. 19-0978 (issued October 21, 2019); see Tammy Craven, 57 ECAB 689 (2006).

14 Id. 

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

16 S.N., supra note 12; see K.H., Docket No. 06-0191 (issued October 30, 2006).
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case must therefore be remanded for OWCP to determine whether she is entitled to waiver of the 

recovery of the overpayment for the first incorrect compensation payment made on 

August 18, 2018.17

The Board further finds, however, that appellant was at fault in the creation of the 

overpayment of compensation for the period August 19, 2018 through February 29, 2020 and is,

therefore, precluded from waiver of recovery of the overpayment for this remaining period.

When OWCP issued the compensation payment on September 15, 2018 covering the 

period August 19 through September 15, 2018, appellant should have known that she was no 

longer entitled to compensation as OWCP had notified her that her compensation was formally 

terminated, effective July 22, 2018. OWCP continued to pay appellant compensation on the 

periodic rolls through February 29, 2020. Therefore, the Board finds that she was at fault in the 

creation of the remaining period of the overpayment for the period August 19, 2018 through 

February 29, 2020 as she knew or should have known at the time of the second incorrect payment 

that she was no longer entitled to additional wage-loss compensation. The Board, thus, finds that 

appellant was at fault in the creation of the remaining period of the overpayment.18

As appellant’s eligibility for waiver for a portion of the overpayment cannot yet be 

determined, on remand she will be granted an opportunity to submit and have OWCP consider 

relevant financial evidence on this issue. Following this and all other development deemed 

necessary, OWCP shall issue a de novo decision.

CONCLUSION

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

of compensation in the amount of $68,988.07 for the period July 22, 2018 through February 29, 

2020 because her compensation benefits were terminated by OWCP, effective July 22, 2018, and 

she continued to receive compensation benefits through February 29, 2020. With regard to 

OWCP’s finding of fault, the Board finds that appellant was not at fault in the creation of the 

overpayment for the period July 22 through August 18, 2018, but was at fault in the creation of the 

overpayment of compensation for the period August 19 through February 29, 2020 and was, 

thereby, precluded from waiver of recovery for that remaining period. 

 

17 E.N., Docket No. 19-1687 (issued May 27, 2020).

18 See T.N., Docket No. 17-0387 (issued November 28, 2018); K.H., supra note 16.
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ORDER

IT IS HEREBY ORDERED THAT the April 28, 2020 decision of the Office of Workers’

Compensation Programs is affirmed in part and set aside in part, and the case is remanded for 

further proceedings consistent with this decision of the Board.

Issued: May 27, 2021

Washington, DC

Alec J. Koromilas, 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