From Department of Labor, Office of Workers’ Compensation:

April 10, 2013

PURPOSE: This circular is being issued to provide supplemental guidance on the necessary claims actions when a claimant in receipt of disability compensation receives a lump-sum incentive payment from the United States Postal Service (USPS) as the result of (1) choosing optional retirement pursuant to a Voluntary Early Retirement Authority (VERA), or (2) voluntarily resigning.

BACKGROUND: Certain eligible full-time employees of the USPS who voluntarily elected to retire or resign by December 2012 qualified for a $15,000 lump-sum incentive, with $10,000 to be paid on or about May 24, 2013, and $5,000 to be paid on or about May 23, 2014. Part-time employees were also eligible for the incentive, with the amount to be prorated based upon hours worked.

An offset is required only where the claimant receives an incentive payment when in receipt of (or eligible to receive) compensation for temporary total disability (TTD). No offset is required when the claimant is in receipt of compensation for loss of wage-earning capacity (LWEC), schedule award, etc.

ACTIONS: Upon receipt of documentation (e.g. personnel action form or other documentation from the USPS) that a claimant in receipt of compensation for TTD has received a separation incentive payment, the claims examiner (CE) should take the following steps:

(1) Review PM 2-1000.17 with respect to separation pay. For purposes of this offset, TTD compensation should be suspended effective the date of each lump-sum incentive payment. (note: link added by PostalReporter.com)

(2) Determine the claimant’s weekly salary at the time of separation.

(3) Divide the amount of the incentive payment by the weekly salary amount.

(4) The resulting number is the number of weeks that the claimant is not entitled to compensation. If the resulting number is a decimal, use the following to calculate the number of days equivalent to the decimal.

.1	=	1 day	.6	=	4 days
.2	=	1 day	.7	=	5 days
.3	=	2 days	.8	=	6 days
.4	=	3 days	.9	=	6 days
.5	=	4 days

 

(5) Determine the correct time period (weeks plus days) that the claimant is not entitled to compensation.

(6) Complete a memo for the file outlining the offset calculation and period.

(7) Terminate compensation effective the date of the incentive payment. Send the claimant a letter outlining the period of ineligibility for FECA benefits. This letter should advise the claimant to submit a Form CA-7 at the expiration of the period if he/she wishes to resume FECA benefits in an effort to verify employment status and payment eligibility to avoid improper payments.

8) If a CA-7 is received at the end of the period (and the claimant is not working or in receipt of retirement benefits), the claimant should be placed back on the periodic roll as long as new medical evidence has not been received in the interim period indicating that the claimant’s condition has resolved or he/she can return to full duty.

• If the claimant is in receipt of retirement benefits, an election of benefits is required, and compensation should not be paid until OPM confirms annuity payments have stopped.

(9) If TTD compensation resumes at the expiration of the offset period, send the claimant a CA-1049. In the first payment, HB/LI deductions should be made retroactive to the date compensation was suspended (if applicable and if not made by OPM). This should be explained in the CA-1049.

(10) Set a reminder for early May, 2014 to check the case to ascertain whether the second incentive payment is still scheduled to be made on May 23, 2014 as planned so that appropriate actions can be taken.

Note – A claimant, if eligible, may elect to receive benefits from OPM on or before the date of the incentive payment. Such an election should be processed consistent with established procedure.

DOUGLAS C. FITZGERALD
Director for
Federal Employees’ Compensation