J.A. and Department of the Treasury, Internal Revenue Service, Richmond, VA (Board decision, June 9, 2010)

ECAB final decision. The Board affirmed OWCP's September 24, 2008 and February 5, 2009 decisions on J.A.'s schedule award and overpayment. It upheld the $81,263.96 debt and recovery through deductions of $200 every four weeks from continuing compensation. Under 20 C.F.R. § 501.6(d), this Board decision becomes final 30 days after issuance unless the Board fixed a different period in it. A party may petition the Board for reconsideration within 30 days unless this decision specifies another period, under 20 C.F.R. § 501.7(a). FECA compensation decisions are generally not subject to court review under 5 U.S.C. § 8128(b).

Plain-English summary

J.A., an IRS special agent, challenged his schedule award ratings of 12 percent left leg impairment and 8 percent right leg impairment after an accepted back injury. The Board agreed with OWCP's medical adviser that a higher rating had combined methods the A.M.A. Guides did not permit and added unsupported pain ratings. OWCP found that the earlier, larger award caused an $81,263.96 overpayment after a debt compromise. Although J.A. was not at fault, the Board found that he did not qualify for a waiver and that OWCP had considered his finances when setting recovery at $200 every four weeks. It affirmed both the impairment and overpayment decisions.

Decision snapshot

• Authority: Schedule awards under 5 U.S.C. § 8107 and overpayment recovery under 5 U.S.C. § 8129(a), (b) and 20 C.F.R. § 10.441(a).
• Outcome: September 24, 2008 and February 5, 2009 decisions affirmed; $81,263.96 overpayment recoverable in $200 deductions every four weeks.
• Key point: The allowable leg ratings supported a smaller award, and the record did not justify waiving recovery of the resulting debt.

Full text (ECAB public release)

United States Department of Labor
Employees’ Compensation Appeals Board

________
)
J.A., Appellant
)
)
and ) Docket No. 09-1678
) Issued: June 9, 2010
DEPARTMENT OF THE TREASURY,
)
INTERNAL REVENUE SERVICE,
)
Richmond, VA, Employer
)
__________ )

Appearances: Case Submitted on the Record
Thomas R. Uliase, Esq., for the appellant
Office of Solicitor, for the Director

DECISION AND ORDER

Before:
ALEC J. KOROMILAS, Chief Judge
COLLEEN DUFFY KIKO, Judge
JAMES A. HAYNES, Alternate Judge

JURISDICTION

On June 12, 2009 appellant filed a timely appeal from the September 24, 2008 and February 5, 2009 merit decisions of the Office of Workers’ Compensation Programs concerning a schedule award and an overpayment of compensation. Pursuant to 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 appellant met his burden of proof to establish that he has more than 12 percent permanent impairment of his left leg and 8 percent permanent impairment of his right leg, for which he received a schedule award; (2) whether appellant received an $81,263.96 overpayment of compensation; (3) whether the Office abused its discretion by refusing to waive recovery of the overpayment; and (4) whether the Office properly required repayment of the overpayment by deducting $200.00 from appellant’s compensation payments every four weeks. FACTUAL HISTORY

The Office accepted on April 9, 1996 that appellant, then a 43-year-old special agent, sustained a herniated disc at left L4-5 and lumbar radiculitis due to lifting a box of papers. Appellant received compensation from the Office for periods of disability.1

On June 30, 2003 Dr. David Weiss, an attending osteopath and Board-certified orthopedic surgeon, determined that appellant had an 18 percent permanent impairment of his right arm, a 22 percent permanent impairment of his left leg and an 11 percent permanent impairment of his right leg. He detailed appellant’s medical history and stated that he complained of daily pain and stiffness in his low back and right shoulder, weakness in his right arm and numbness, tingling and pain in his legs, left greater than right. On physical examination, appellant had tenderness at the tip of the right acromion and the acromioclavicular point tenderness. Range of motion showed flexion of 130 degrees, abduction of 110 degrees, adduction of 45 degrees and external rotation of 75 degrees. Dr. Weiss indicated that appellant had crepitance of the acromioclavicular joint. Sensory examination revealed a perceived sensory deficit over the L4, L5 and S1 dermatomes of the left leg and over the L4 and S1 dermatomes of the right leg. The gastrocnemius circumferential measurements were 48 centimeters on the right and 47 centimeters on the left.

Dr. Weiss determined that, under the standards of the American Medical Association, Guides to the Evaluation of Permanent Impairment (5th ed. 2001), appellant had a six percent impairment due to limited right shoulder motion, comprised of a three percent impairment for limited right shoulder flexion and three percent impairment for limited right shoulder abduction. Dr. Weiss combined this 6 percent value, using the Combined Values Chart on page 604 of the A.M.A., Guides, with 10 percent impairment for his right distal clavicle resection acromioplasty to equal 15 percent impairment of the right arm. He then combined the 15 percent impairment rating with 3 percent rating for pain2 to conclude that appellant had 18 percent impairment of his right arm. Dr. Weiss stated that appellant had eight percent impairment of his left leg due to his left calf atrophy, four percent impairment of his left leg due to sensory deficit associated with the L4 nerve root, four percent impairment of his left leg due to sensory deficit associated with the L5 nerve root and four percent impairment of his left leg due to sensory deficit associated with the S1 nerve root.3 He added the sensory losses to equal 12 percent and combined this value with the 8 percent rating for atrophy to equal 19 percent. Dr. Weiss then combined the 19 percent value with 3 percent impairment rating for pain to equal 22 percent impairment of

1
In connection with another claim, the Office accepted that on October 2, 2001 appellant sustained a torn labrum of his right shoulder when an elevator closed on his right shoulder at work. On July 10, 2002 appellant underwent arthroscopic surgery of his right shoulder including debridement of his torn anterior labrum, subacromial decompression, anterior acriomioplasty and bursectomy. In connection with the right shoulder injury, the Office issued a decision on February 10, 2004 granting appellant a schedule award for 18 percent permanent impairment of his right arm. 2 Dr. Weiss indicated that his pain ratings were based on Figure 18-1 on page 574 of the A.M.A., Guides.
3
Dr. Weiss derived the atrophy rating from Table 17-6 on page 530 of the A.M.A., Guides and the sensory loss ratings from Tables 15-15 and 15-18 on page 424. It appears that he determined that appellant had a Grade 2 (80 percent) sensory loss in connection with his left L4, L5 and S1 nerves. See A.M.A., Guides 424, Table 15-15.

2 appellant’s left leg. Dr. Weiss stated that appellant had four percent impairment of his right leg due to sensory deficit associated with the L4 nerve root and a four percent impairment of his right leg due to sensory deficit associated with the S1 nerve root.4 He added these values to equal 8 percent and then combined the 8 percent value with a 3 percent impairment rating for pain to equal 11 percent impairment of appellant’s right leg.

Appellant filed a claim for a schedule award related to his accepted conditions. In January 2004 an Office medical adviser reviewed the medical evidence, including the June 30, 2003 report of Dr. Weiss, and concluded that appellant had an 18 percent permanent impairment of his right arm and 22 percent permanent impairment of his left leg. He indicated that the 18 percent impairment of the right arm was calculated by combining 10 percent impairment rating for the right acromioplasty with 3 percent rating and 6 percent rating for limited right shoulder motion (comprised of 3 percent impairment for limited right shoulder flexion and 3 percent impairment for limited right shoulder abduction). The 22 percent impairment of appellant’s left leg was calculated by combining 8 percent impairment for left leg atrophy, 12 percent impairment for sensory loss associated with the L4, L5 and S1 nerves and 3 percent impairment for pain.

On March 16, 2004 the Office granted appellant a schedule award for 40 percent permanent impairment of his legs. The award ran for 115.2 weeks from June 30, 2003 to September 13, 2005.

On June 7, 2007 another Office medical adviser reviewed the medical evidence, including the June 30, 2003 report of Dr. Weiss, and concluded that appellant had 12 percent permanent impairment of his left leg and 8 percent permanent impairment of his right leg. The Office medical adviser stated that the 12 percent impairment of appellant’s left leg was comprised of 4 percent impairment due to sensory deficit associated with the left L4 nerve root, 4 percent impairment due to sensory deficit associated with the left L5 nerve root and 4 percent impairment due to sensory deficit associated with the left S1 nerve root. The eight percent impairment of appellant’s right leg was comprised of four percent impairment due to sensory deficit associated with the right L4 nerve root and four percent impairment due to sensory deficit associated with the right S1 nerve root. The Office determined that the three percent pain ratings for each leg were not warranted under Chapter 18 of the A.M.A., Guides and that Table 17-2 prohibited the combination of 8 percent rating for left-sided muscle atrophy with the 12 percent rating for left-sided peripheral nerve injury.

In September 21, 2007 decision, the Office granted appellant a “corrected” schedule award for 12 percent permanent impairment of his left leg and 8 percent permanent impairment of his right leg. The award ran for 57.6 weeks from June 30, 2003 to August 6, 2004.

In a November 5, 2007 notice, the Office advised appellant of its preliminary determination that he received an $89,489.71 overpayment of compensation. It indicated that appellant received schedule award benefits in the amount of $182,226.96 for the period June 30, 2003 to October 15, 2004 which was based on a 40 percent impairment rating of his lower

4
It appears that Dr. Weiss determined that appellant had a Grade 2 (80 percent) sensory loss in connection with his right L4 and S1 nerves. See A.M.A., Guides 424, Table 15-15.

3 extremities. The Office determined that appellant was only entitled to receive schedule award benefits in the amount of $92,737.26 for the period June 30, 2003 to August 6, 2004 which were based on 20 percent impairment rating of his lower extremities.5 It also made a preliminary determination that he was not at fault in the creation of the overpayment. The Office advised appellant that he could submit evidence challenging the fact, amount, or finding of fault and request waiver of the overpayment. It informed appellant that he 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. The Office requested that appellant complete and return an enclosed financial information questionnaire within 30 days even if he was not requesting waiver of the overpayment.

Appellant requested a hearing before an Office hearing representative. At the January 16, 2008 hearing, appellant argued that the Office made an improper determination regarding his entitlement to schedule award compensation. He claimed that there was a conflict in the medical evidence between the June 30, 2003 report of Dr. Weiss and the June 7, 2007 evaluation of the Office medical adviser. Appellant claimed that overpayment found by the Office should be waived because he detrimentally relied on the extra monies he received to buy a Florida property. He alleged that he sustained a $90,000.00 loss on the property as a result of the current market value of that property. Appellant also alleged that he loaned monies that he otherwise would not have loaned.6

In a March 12, 2008 decision, the Office hearing representative affirmed the Office’s September 21, 2007 decision finding that appellant had 12 percent permanent impairment of his left leg and 8 percent permanent impairment of his right leg. The Office hearing representative determined that the evidence established that appellant received a $89,489.71 overpayment of compensation because he received schedule award benefits in the amount of $182,226.96 for the period June 30, 2003 to October 15, 2004 (based on 40 percent impairment rating of his lower extremities) but was only entitled to receive $92,737.26 for the period June 30, 2003 to August 6, 2004 (based on 20 percent impairment rating of his lower extremities). He found that the overpayment should be reduced to $81,263.96 under Office procedure concerning debt compromise because recovery of the overpayment in full with five percent interest would exceed appellant’s life expectancy.7

The Office hearing representative found that appellant was not at fault in the creation of the overpayment but that the overpayment was not subject to waiver. He indicated that appellant listed an asset in the form of a second home in New Jersey which was worth $71,500.00 after mortgages and other expenses were deducted. The Office hearing representative noted that

5
The Office indicated that, based on the June 7, 2007 evaluation of an Office medical adviser, it was determined that appellant had 12 percent permanent impairment of his left leg and 8 percent permanent impairment of his right leg. It then issued its September 21, 2007 decision granting a schedule award in the correct amount. 6 Appellant submitted a completed financial information questionnaire and various financial documents. His listed monthly income of $9,134.00 and monthly expenses of $8,624.00. He also listed an asset in the form of a second home in New Jersey which was worth $71,500.00 after mortgages and other expenses were deducted. 7 See Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Debt Liquidation, Chapter 6.300.6 (May 2004).

4 appellant listed monthly income of $9,134.00 and monthly expenses of $8,624.00. He stated that after deducting expenses which he felt were not ordinary and necessary (such as those related to cable television and entertainment costs) that appellant’s monthly income exceeded his monthly expenses by $592.00. The Office hearing representative further found that appellant had not detrimentally relied on the overpayment amount. He stated that appellant had not shown that he would not have bought the property in Florida if he had not received the extra monies from the overpayment and noted that he had not suffered a loss in connection with the home because he had not yet sold it.8 For these reasons, the Office hearing representative found that appellant failed to establish that recovery of the overpayment in compensation would defeat the purpose of the Act or be against equity and good conscience. He required repayment of the overpayment by deducting $592.00 from appellant’s compensation payments every four weeks.

Appellant submitted additional financial records documenting his expenses. In a September 24, 2008 decision, the Office affirmed its March 12, 2008 overpayment determination with respect to the fact, amount and waiver issues.9 It modified the method of overpayment recovery issue by reducing appellant’s required payments every four weeks to $200.00. The Office considered the new financial information submitted by appellant in reaching this determination.

Appellant requested reconsideration and presented arguments concerning his claim of detrimental reliance. He clarified that he actually made gifts of monies, rather than loans, in reliance on the overpayment amounts he received. Appellant asserted that he needed more than $61,000.00 of cash in hand before he could sell his property in Florida. In a February 5, 2009 decision, the Office affirmed its September 24, 2008 decision.

LEGAL PRECEDENT -- ISSUE 1

The schedule award provision of the Federal Employees’ Compensation Act10 and its implementing regulations11 set 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, the Act 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 to all claimants, good administrative practice necessitates the use of a single set of tables so that there may be uniform standards applicable to all claimants. The A.M.A., Guides (5th ed. 2001) has been adopted by the implementing regulations as the appropriate standard for evaluating schedule losses.12 Chapter 18 of the A.M.A., Guides should not be used to rate pain-related impairments

8
It appears from the record that appellant lives in the home that he purchased in Florida.
9
The Office again determined that the overpayment was created by the fact that appellant was only entitled to receive schedule award compensation for a 12 percent impairment of his left leg and an 8 percent impairment of his right leg. 10 5 U.S.C. § 8107.
11
20 C.F.R. § 10.404 (1999).
12
Id.

5 for any condition that can be adequately rated on the basis of the body and organ impairment systems given in other chapters of the A.M.A., Guides.13 Table 17-2 of the A.M.A., Guides (Guide to the Appropriate Combination of Evaluation Methods) provides that it is not permissible to combine a value for impairment due to a peripheral nerve injury with a value for impairment due to muscle atrophy.14

ANALYSIS -- ISSUE 1

The Board finds that the Office properly determined that appellant did not meet his burden of proof to establish that he has more than 12 percent permanent impairment of his left leg and 8 percent permanent impairment of his right leg, for which he received a schedule award.

The only proper assessment of appellant’s lower extremity impairment is the June 7, 2007 evaluation of the Office medical adviser who reviewed the medical evidence, including the June 30, 2003 report of Dr. Weiss, an attending osteopath and Board-certified orthopedic surgeon, and concluded that appellant had 12 percent permanent impairment of his left leg and 8 percent permanent impairment of his right leg. The Office medical adviser properly found that the 12 percent impairment of appellant’s left leg was comprised of 4 percent impairment due to sensory deficit associated with the left L4 nerve root, 4 percent impairment due to sensory deficit associated with the left L5 nerve root and 4 percent impairment due to sensory deficit associated with the S1 nerve root. He also properly determined that eight percent impairment of appellant’s right leg was comprised of four percent impairment due to sensory deficit associated with the right L4 nerve root and four percent impairment due to sensory deficit associated with the right S1 nerve root.15

On appeal, appellant’s attorney alleged that there was a conflict in the medical evidence between the June 7, 2007 evaluation of the Office medical adviser and the June 30, 2003 report of Dr. Weiss. However, the Office medical adviser properly identified errors in Dr. Weiss’ impairment rating which reduced the total impairment of appellant’s lower extremities to 12 percent in the left leg and 8 percent in the right leg. Dr. Weiss combined 8 percent rating for left-sided muscle atrophy with the 12 percent rating for left-sided peripheral nerve injury. However, the Office medical adviser noted that Table 17-2 on page 526 of the A.M.A., Guides provides that it is not permissible to combine a value for impairment due to a peripheral nerve injury with a value for impairment due to muscle atrophy.16 Dr. Weiss also included pain-related 13 See Federal (FECA) Procedure Manual, Part 3 -- Medical, Schedule Awards, Chapter 3.700 Exhibit 4 (June 2003). See also Philip A. Norulak, 55 ECAB 690 (2004) (a separate pain calculation under Chapter 18 is not to be used in combination with other methods to measure impairment due to sensory pain as outlined in Chapters 13, 16 and 17 of the fifth edition of the A.M.A., Guides). 14 A.M.A., Guides 526, Table 17-2.
15
The maximum value for sensory loss associated with the L4, L5 and S1 nerves is five percent for each nerve.
Given that the Office medical adviser found that appellant had a 4 percent sensory loss impairment in each identified nerve on the left and right, it appears that it was determined that appellant had a Grade 2 (80 percent) sensory loss in connection with his left L4, L5 and S1 nerves and his right L4 and S1 nerves. The Board notes that this assessment seems appropriate given that appellant’s sensory loss prevented some activities. See A.M.A., Guides 424, Tables 15-15 and 15-18. 16 See supra note 11.

6 impairment ratings of three percent for each leg. He did not adequately explain how these ratings were derived in accordance with the standards of the A.M.A., Guides and the Office medical adviser properly excluded them. For these reasons, appellant did not show that he has more than 12 percent permanent impairment of his left leg and 8 percent permanent impairment of his right leg.

LEGAL PRECEDENT -- ISSUE 2

Section 8102(a) of the Act 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.17 Section 8129(a) of the Act 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.”18

Section 8116(a) of the Act provides that while an employee is receiving compensation or if he 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.19

ANALYSIS -- ISSUE 2

In the present case, the report contains evidence which shows that appellant received schedule award benefits in the amount of $182,226.96 for the period June 30, 2003 to October 15, 2004 which were based on a 40 percent impairment rating of his lower extremities. For the reasons explained above, the Office properly determined that appellant was only entitled to receive schedule award benefits in the amount of $92,737.26 for the period June 30, 2003 to August 6, 2004 which were based on a combined 20 percent impairment rating of his lower extremities.20 Therefore, appellant received $89,489.71 in compensation to which he was not entitled. The Office hearing representative reduced this amount to $81,263.96 under the debt compromise provisions of Office procedure.21 Therefore, the Office properly determined that appellant received an $81,263.96 overpayment of compensation.

17
5 U.S.C. § 8102(a).
18
Id. at § 8129(a).
19
Id. at § 8116(a).
20
The Board notes that it does not appear that appellant has contested the Office’s findings about how much money he received in connection with his schedule awards.
21
See supra note 7.

7
 LEGAL PRECEDENT -- ISSUE 3

The waiver or refusal to waive an overpayment of compensation by the Office is a matter that rests within the Office’s discretion pursuant to statutory guidelines.22 These statutory guidelines are found in section 8129(b) of the Act which states: “Adjustment or recovery [of an overpayment] 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.”23 If the Office finds a claimant to be without fault in the matter of an overpayment, then, in accordance with section 8129(b), the Office may only recover the overpayment if it determined that recovery of the overpayment would neither defeat the purpose of the Act nor be against equity and good conscience.

According to 20 C.F.R. § 10.436, recovery of an overpayment would defeat the purpose of the Act if recovery would cause hardship because the beneficiary needs substantially all of his 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 the Office from data provided by the Bureau of Labor Statistics.24 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 position for the worse.25

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. Donations to charitable causes or gratuitous transfers of funds to other individuals are not considered relinquishments of valuable rights.26 An individual must show that he made a decision he otherwise would not have made in reliance on the overpaid amount and that this decision resulted in a loss.27 Conversion of the

22
See Robert Atchison, 41 ECAB 83, 87 (1989).
23
5 U.S.C. § 8129(b).
24
20 C.F.R. § 10.436. An individual is deemed to need substantially all of his monthly income to meet current and ordinary living expenses if monthly income does not exceed monthly expenses by more than $50.00. Desiderio Martinez, 55 ECAB 245 (2004). Office procedure provides that assets must not exceed a resource base of $4,800.00 for an individual or $8,000.00 for an individual with a spouse or dependent plus $960.00 for each additional dependent. Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 6.200.6(a) (October 2004). 25 20 C.F.R. § 10.437(a), (b); see W.P., 59 ECAB ____ (Docket No. 08-202, issued May 8, 2008).
26
20 C.F.R. § 10.437(b)(1).
27
See Wayne G. Rogers, 54 ECAB 482 (2003); 20 C.F.R. § 10.437(b)(2).

8 overpayment into a different form (such as food, consumer goods, real estate, etc.) from which the claimant derived some benefit does not constitute loss for this purpose.28

ANALYSIS -- ISSUE 3

As noted earlier, the Office found appellant not at fault for this overpayment, rendering him eligible for waiver, if repayment would defeat the purpose of the Act or be against equity or good conscious. Appellant has not established though, that recovery of the overpayment would defeat the purpose of the Act because he has not shown both that he needs substantially all of his current income to meet ordinary and necessary living expenses and that his assets do not exceed the allowable resource base. The record reflects that appellant has an asset in the form of a second home in New Jersey which was worth $71,500.00 after mortgages and other expenses were deducted. Therefore, his assets exceed the allowable resources base.29

Because appellant has not met the second prong of the two-prong test of whether recovery of the overpayment would defeat the purpose of the Act, it is not necessary for the Office to consider the first prong of the test, i.e., whether appellant’s needs substantially all of his current income to meet current ordinary and necessary living expenses.

On appeal, appellant’s attorney claimed that overpayment found by the Office should be waived because appellant detrimentally relied on the extra monies he received to buy a Florida property. He alleged that appellant sustained a $90,000.00 loss on the property as a result of the current market value of that property. Appellant’s attorney also alleged that appellant gave away monies that he otherwise would not have given away.

In this case, appellant does not qualify for waiver under the principle of detrimental reliance because the evidence does not establish that he gave up a valuable right or changed his position for the worse in reliance on anticipated payments. Moreover, he has not shown that, if required to repay the overpayment, he would be in a worse position after repayment than if he had never received the overpayment at all. With respect to the house he bought in Florida, appellant has not shown that he would not have bought the property if he had not received the extra monies from the overpayment and he has not suffered a loss in connection with the house because he has not yet sold it. Under Office procedure, conversion of the overpayment into a different form (such as real estate) from which the claimant derived some benefit does not constitute loss for this purpose. Appellant continues to have the benefit of possession and ownership of the house.

With respect to appellant’s giving of gifts, Office regulations provide that gratuitous transfers of funds to other individuals are not considered relinquishments of valuable rights. The Office properly found that appellant was not entitled to waiver on the grounds that recovery

28
See Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 6.200.6b(3) (October 2004); K.K., 61 ECAB ____ (Docket No. 09-207, issued October 2, 2009). 29 The record reflects that appellant has at least one dependent and therefore his resource base would be $8,000.00 plus $960.00 for each additional dependent. It is not certain whether appellant has any additional dependents but the Board notes it is clear that appellant’s assets far exceed his resource base even if he had such additional dependents.

9 would be against equity and good conscience. As appellant failed to establish that recovery of the overpayment in compensation would defeat the purpose of the Act or be against equity and good conscience, the Board finds that the Office did not abuse its discretion in denying waiver of recovery.

Appellant also has not established that recovery of the overpayment would be against equity and good conscience because he has not shown, for the reasons noted above, that he would experience severe financial hardship in attempting to repay the debt or that he relinquished a valuable right or changed his position for the worse in reliance on the payment which created the overpayment.30

LEGAL PRECEDENT -- ISSUE 4

Section 10.441 of Title 20 of the Code of Federal Regulations provide in pertinent part:

“When an overpayment has been made to an individual who is entitled to further payments, the individual shall refund to [the Office] the amount of the overpayment as soon as the error is discovered or his or her attention is called to the same. If no refund is made, [the Office] shall decrease later 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.”31

ANALYSIS -- ISSUE 4

The record supports that, in requiring repayment of the overpayment by deducting $200.00 from appellant’s compensation payments every four weeks, the Office took into consideration the financial information submitted by appellant as well as the factors set forth in section 10.321 and found that this method of recovery would minimize any resulting hardship on appellant. Therefore, the Office properly required repayment of the overpayment by deducting $200.00 from appellant’s compensation payments every four weeks.

CONCLUSION

The Board finds that appellant did not meet his burden of proof to establish that he has more than 12 percent permanent impairment of his left leg and 8 percent permanent impairment of his right leg, for which he received a schedule award. The Board further finds that appellant received an $81,263.96 overpayment of compensation, was not at fault but that the Office did not abuse its discretion by refusing to waive recovery of the overpayment. The Office properly required repayment of the overpayment by deducting $200.00 from appellant’s compensation payments every four weeks.

30
See William J. Murphy, 41 ECAB 569, 571-72 (1989).
31
20 C.F.R. § 10.441(a); see Donald R. Schueler, 39 ECAB 1056, 1062 (1988).

10
 ORDER

IT IS HEREBY ORDERED THAT the February 5, 2009 and September 24, 2008 decisions of the Office of Workers’ Compensation Programs are affirmed.

Issued: June 9, 2010
Washington, DC

Alec J. Koromilas, Chief Judge
Employees’ Compensation Appeals Board

Colleen Duffy Kiko, Judge
Employees’ Compensation Appeals Board

James A. Haynes, Alternate Judge
Employees’ Compensation Appeals Board

11