United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

S.S., Appellant

and

DEPARTMENT OF VETERANS AFFAIRS, 

MANN-GRANDSTAFF VETERANS AFFAIRS 

MEDICAL CENTER, Spokane, WA, Employer

__________________________________________

)

)

)

)

)

)

)

)

)

Docket No. 20-0776

Issued: March 15, 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

JANICE B. ASKIN, Judge

PATRICIA H. FITZGERALD, Alternate Judge

JURISDICTION

On February 19, 2020 appellant filed a timely appeal from a December 12, 2019 merit 

decision and a January 22, 2020 nonmerit 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 an overpayment of compensation in the 

amount of $1,094.07 for the period July 9 through 20, 2019 because she received wage-loss 

compensation for total disability after she had returned to part-time work; (2) whether OWCP 

 

1 5 U.S.C. § 8101 et seq.

2 The Board notes that, following the January 22, 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

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

precluding waiver of recovery of the overpayment; and (3) whether it properly denied appellant’s 

request for a prerecoupment hearing as untimely filed.

FACTUAL HISTORY

On May 1, 2018 appellant, then a 55-year-old registered nurse, filed a traumatic injury 

claim (Form CA-1) alleging that on April 30, 2018 she sustained bilateral knee, head, and back 

injuries when she fell forward while attempting to unjam a Xerox photocopy machine. OWCP 

accepted the claim for right knee contusion and neck muscle, fascia, and tendon strain, and 

subsequently expanded acceptance of the claim to include thoracic ligaments sprain, and 

permanent cervical disc aggravation. It paid appellant intermittent wage-loss compensation on the 

supplemental rolls for the period June 15, 2018 through March 30, 2019 and on the periodic rolls 

for the period March 31 through July 20, 2019. 

In a letter dated April 9, 2019, OWCP advised appellant that she would be paid on the 

periodic rolls, outlined her entitlement to compensation benefits, and advised her of her 

responsibility to return to work in connection with the accepted injury. In an attached EN-1049 

form, it related:

“OVERPAYMENTS: To minimize the possibility of an overpayment of 

compensation, NOTIFY THIS OFFICE IMMEDIATELY WHEN YOU GO 

BACK TO WORK. If you receive your compensation payments via paper check, 

the payment shows the period for which payment is made. If you have worked for 

any portion of this period, return the payment to this office, even if you have already 

advised OWCP that you are working. For payments sent by electronic funds 

transfer (EFT), a notification of the date and amount of payment appears on the 

statement from your financial institution. You are expected to monitor your EFT 

deposits carefully, at least every two weeks. If you have worked for any portion of 

the period for which a deposit was made, advise OWCP immediately so that the 

overpayment can be collected.” (Emphasis in the original.)

In a report dated July 8, 2019, Ann Mikel, a registered nurse, the field nurse assigned to 

appellant’s claim noted that appellant returned to light-duty work for four hours per day for two 

weeks on June 27, 2019, which would increase to six hours per day for two weeks, and then 

increase to eight hours per day. 

The record reflects that on July 20, 2019 appellant was paid wage-loss compensation on 

the periodic rolls for the period June 23 through July 20, 2019. 

Appellant filed a claim for intermittent wage-loss compensation (Form CA-7) for the 

period July 7 through 20, 2019. On the reverse side of the claim form the employing establishment 

noted that she was working reduced hours and performing limited duties. In an attached time 

analysis form (Form CA-7a), appellant noted that on July 8, 2019 she had used eight hours of leave 

without pay (LWOP) because she had not been released to return to duty work, and that she had 

worked four hours per day and taken four hours of LWOP for the period July 9 through 19, 2019. 
3

In an amended August 7, 2019 fiscal form, OWCP noted that appellant had returned to 

part-time work on July 9, 2019, but that it continued to pay her compensation for temporary total 

disability through July 20, 2019. On August 7, 2019 it calculated that she had been overpaid in 

the amount of $1,094.07 for the days she received compensation following her return to part-time 

work on July 9, 2019. OWCP noted that, during this period, appellant had been paid a net payment 

of $2,605.98, but she was only entitled to receive a net payment of $1,511.91 resulting in an 

overpayment of compensation in the amount of $1,094.07. 

On August 29, 2019 OWCP advised appellant of its preliminary determination that she had 

received an overpayment of compensation in the amount of $1,094.07 for the period July 9 through 

20, 2019 because she returned to part-time employment on July 9, 2019, but received wage-loss 

compensation for total disability through July 20, 2019. It further notified her of its preliminary 

finding that she was at fault in the creation of the overpayment because she accepted a payment 

that she knew or reasonably should have known, was incorrect. Additionally, OWCP informed 

appellant that, within 30 days, she could request a telephonic conference, a final decision based on 

the written evidence, or a prerecoupment hearing. It requested that she complete an enclosed 

overpayment recovery questionnaire (Form OWCP-20) and submit supporting financial 

documentation. There was no response from appellant.

By decision dated December 12, 2019, OWCP finalized its preliminary determination that 

appellant received an overpayment of compensation in the amount of $1,094.07 for the period 

July 9 through 20, 2019.3 It determined that she was at fault in the creation of the overpayment 

and was therefore precluded from waiver of recovery of the overpayment. OWCP required 

repayment in full within 30 days.

On December 31, 2019 OWCP received appellant’s September 5, 2019 request for a 

prerecoupment telephonic hearing before an OWCP hearing representative, postmarked 

December 20, 2019. 

By decision dated January 22, 2020, OWCP denied appellant’s request for a 

prerecoupment hearing as she did not request a prerecoupment telephonic hearing within 30 days 

of the preliminary overpayment finding. It also noted that a final overpayment decision was not 

subject to the hearing provisions of 5 U.S.C. § 8124(b). 

LEGAL PRECEDENT -- ISSUE 1

Section 8102 of FECA4 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.5

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 

 

3 OWCP noted the period as June 23 through July 20, 2019, but calculated the overpayment based on appellant’s

July 9, 2019 return to work. 

4 Supra note 1 at § 8102.

5

Id. at § 8116.
4

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

circumstances.6 OWCP’s procedures provide that an overpayment in compensation is created 

when a claimant returns to work, but continues to receive wage-loss compensation.7

ANALYSIS -- ISSUE 1

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

of compensation for the period July 9 through 20, 2019.

The evidence of record establishes that appellant returned to work in a modified position

at the employing establishment for four hours a day on July 9, 2019, but she continued to receive 

wage-loss compensation for temporary total disability through July 20, 2019. 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. Therefore, an overpayment of compensation was created in this case.8

In determining the amount of overpayment, OWCP calculated the net amount of disability 

compensation that appellant had received from July 9 through 20, 2019. It properly determined 

that she had been paid a net payment of $2,605.98, but was only entitled to receive a net payment 

of $1,511.91 resulting in an overpayment of $1,094.07. Thus, the Board finds that she received 

an overpayment of compensation in the amount of $1,094.07 during the above-noted period.

LEGAL PRECEDENT -- ISSUE 2

Section 8129(b) of FECA provides as follows 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.9 No waiver of recovery of an overpayment is possible if the 

claimant is at fault in the creation of the overpayment.10

On the issue of fault, 20 C.F.R. § 10.433(a) provides that an individual is with fault in 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; (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.11

 

6

Id. at § 8116(a).

7 C.A., Docket No. 18-0092 (issued April 2, 2018); Danny E. Haley, 56 ECAB 393 (2005); Federal (FECA) 

Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Action, Chapter 6.200.2(a) (September 2018).

8

Id.

9 5 U.S.C. § 8129(b).

10 B.W., Docket No. 19-0239 (issued September 18, 2020); C.L., Docket No. 19-0242 (issued August 5, 2019).

11 20 C.F.R. § 10.433(a).
5

With respect to whether an individual is without fault, section 10.433(b) of OWCP 

regulations provides that whether or not OWCP determines that an individual was at fault with 

respect to the creation of an overpayment depends on the circumstances surrounding 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.12

ANALYSIS -- ISSUE 2

The Board finds that OWCP improperly determined that appellant was at fault in the 

creation of the overpayment from July 9 through 20, 2020.

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

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

he or she knew or should have known that the payment was incorrect.13 The Board has held that 

a claimant 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.14 Because fault is defined 

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

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

first incorrect payment.15

Appellant returned to work on July 9, 2019. OWCP paid her compensation for the period 

July 9 through 20, 2019 in a direct deposit payment on July 20, 2019. There is no documentation 

to demonstrate that appellant had clear knowledge at the time the bank received the July 20, 2019

direct deposit that the payment was incorrect.16 The Board thus finds that she was without fault in 

accepting the initial direct deposit covering the period July 9 through 20, 2019.

The Board therefore finds that this case is not in posture for decision regarding the issue 

of waiver of recovery of the overpayment for the period July 9 through 20, 2019. The Board will 

set aside the December 12, 2019 decision regarding the issue of fault for that period and remand 

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

overpayment covering the period July 9 through 20, 2019.17

CONCLUSION

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

$1,094.07 for the period July 9 through 20, 2019, because she continued to receive wage-loss 

compensation after she returned to part-time work. The Board further finds that she was without 

 

12 Id. at § 10.433(b).

13 See C.H., Docket No. 19-1470 (issued January 24, 2020); see also Claude T. Green, 42 ECAB 174, 278 (1990).

14 C.H., id.; see Tammy Craven, 57 ECAB 589 (2006); see also George A. Hirsch, 47 ECAB 520 (1996).

15 Id.

16 See B.W., supra note 10; K.E., Docket No. 19-0978 (issued October 25, 2018).

17 M.P., Docket No. 20-1035 (issued December 1, 2020).
6

fault in the creation of the overpayment and the case will be remanded to OWCP to consider waiver 

of recovery of the overpayment.

18

ORDER

IT IS HEREBY ORDERED THAT the January 22, 2020 decision of the Office of 

Workers’ Compensation Programs is affirmed in part and set aside in part. The December 12, 

2019 decision of the Office of Workers’ Compensation Programs is set aside and the case is 

remanded for further proceedings consistent with this decision of the Board. 

Issued: March 15, 2021

Washington, DC

Alec J. Koromilas, Chief Judge

Employees’ Compensation Appeals Board

Janice B. Askin, Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Alternate Judge

Employees’ Compensation Appeals Board

 

18 In light of the Board’s disposition of issue 2, issue 3 is rendered moot.