Failing to Submit Documentation Leaves Letter Carrier on Hook for $18,748.26 Overpayment

Federal Focus

A computer error caused a FECA benefits recipient to receive more than $18,000 through no fault of his. But his failure to turn in financial information meant that he couldn't escape paying it back. Simply Research subscribers have access to the full text of the decision.

Case

K.C. and U.S. Postal Service, No. 24-0459 (ECAB 12/04/25)

What Happened

A mail carrier filed an occupational disease claim, alleging that he sustained injury to his left hip, back, and legs due to factors of federal employment, which required repetitive standing, lifting, bending, carrying, walking, driving, and standing with heavy loads.

The Office of Workers' Compensation Claims Programs initially accepted the claim for lumbar sprain and subsequently expanded the acceptance to include temporary aggravation of degenerative disc disease, temporary aggravation of unilateral primary osteoarthritis, temporary aggravation of avascular necrosis, thrombosis of left femoral vein, bilateral pulmonary embolism, and unilateral primary osteoarthritis.

OWCP paid the carrier wage-loss compensation on the supplemental rolls as of Oct. 21, 2015, on the periodic rolls from July 19, 2020, through Feb. 27, 2021, and again on the supplemental rolls intermittently from Feb. 28, 2021.

On Nov. 13, 2023, OWCP issued a preliminary overpayment determination, finding the carrier had received an overpayment of compensation in the amount of $18,748.26 due to a computer error and through no fault of the carrier's.

OWCP requested that the carrier complete an enclosed overpayment recovery questionnaire (Form OWCP-20) and submit supporting financial documentation. Because it did not receive documentation from the carrier, OWCP denied waiver of recovery of the overpayment and required repayment of the debt in full.

The carrier sought review from by the Employees' Compensation Appeals Board.

Rule of Law

Section 8129 of the Federal Employees' Compensation Act provides that an individual who is without fault in creating or accepting an overpayment is still subject to recovery of the overpayment, unless adjustment or recovery would defeat the purpose of FECA or would be against equity and good conscience.

Recovery of an overpayment will defeat the purpose of FECA, if such recovery would cause hardship to a beneficiary because the beneficiary from whom OWCP seeks recovery needs substantially all of his current income, including compensation benefits, to meet current ordinary and necessary living expenses, and the beneficiary’s assets do not exceed a specified amount as determined by OWCP.

Additionally, 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 in attempting to repay the debt or when an individual, in reliance on such payment or on notice that such payments would be made, gives up a valuable right or changes his position for the worse.

What ECAB Said

ECAB determined that OWCP properly denied wavier of recovery of the overpayment. ECAB reasoned that the carrier did not establish that recovery of the overpayment would defeat the purpose of FECA or be against equity and good conscience because the carrier did not provide financial documentation to support his claimed income, assets, or expenses.

"As he did not submit the information required under section 10.438 of OWCP's regulations, which was necessary to determine his eligibility for waiver, the Board finds that OWCP properly denied waiver of recovery of the overpayment," ECAB wrote.

Verdict: ECAB affirmed OWCP's denying waiver of the recovery of the overpayment of $18,748.26

Takeaway

A federal workers' compensation claimant seeking a waiver of recovery of an overpayment should submit an OWCP-20 and supporting financial documentation including copies of income tax returns, bank account statements, bills, pay slips, and any other records to support income and expenses.

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