Printing - FECA-PT2 - National Association of Letter Carriers

2-1300-3 Requests for Lump-Sum Payments
3. Requests for Lump-Sum Payments. When an application for a lump-sum payment is received, the
Claims Examiner (CE) should first determine whether the benefit being paid the claimant or survivor is for
compensation under sections 8105 or 8106; a schedule award under section 8107; survivor's benefits
under section 8135; or, survivor’s benefits under section 8133--as described in section 8135(b). The
claimant should then be advised by the appropriate letter (see exhibits and details below) about the
regulations and how they affect the question of lump-sum payments.
a. Wage Loss Benefits. A beneficiary who initially inquires about the availability of a lump-sum
payment of his or her claim for wage-loss benefits should be advised that such lump-sum
payments will not be considered. The letter should refer the claimant to the rules at 20 C.F.R. §
10.422, which state that "OWCP has determined that lump-sum payments will not be made . . ."
and that "OWCP will not exercise further discretion in the matter." A sample letter to the claimant
is provided as Exhibit 1 for inquiries concerning wage-loss benefits. No appeal rights should
accompany the letter of explanation to the claimant.
However, should the claimant or representative persist in requesting a lump-sum award, a decision
with appeal rights will be issued. This decision should simply refer to the regulation (20 C.F.R. §
10.422(a)) and deny consideration of the lump-sum request, as set forth in Exhibit 2.
b. Schedule Benefits. A lump-sum payment of schedule award benefits may still be made
where the evidence shows that such a payment would be in the claimant's best interest. The
regulations make it clear that there is no absolute right to a lump-sum payment of schedule
benefits and every case must be considered on its individual merits using the best interest test.
The regulations also state that a lump-sum payment of schedule benefits will not generally be
considered in the claimant's best interest where the compensation payments are relied upon as a
substitute for lost wages.
In cases where the claimant is back to work or is receiving an OPM annuity of a sufficient amount,
the schedule award is not replacing the claimant's regular income which is necessary to meet his or
her living needs, and consequently a lump-sum settlement may well be in his or her best interest.
Any decision denying a request for a lump-sum payment of schedule benefits should include an
analysis of the facts in the case considered when exercising discretion.
One factor precluding payment of a lump-sum schedule award is garnishment of compensation
benefits. Although schedule award payments may be garnished, no future payment may be
garnished. Because a lump sum award is a payment of future benefits, the party entitled to
payments from garnishment would no longer be able receive these payments. Therefore, a
claimant whose benefits are being garnished should not be awarded a lump sum for schedule
benefits.
For administrative convenience, where the claimant is working or receiving an OPM annuity
adequate to meet living expenses, the CE should advise the claimant of his or her eligibility for a
lump-sum payment in cases where a schedule award is being paid. Payment of a lump sum for a
schedule award should be considered as early in the period of the award as possible. When a
schedule award letter is issued in a case meeting the above requirements, the CE should routinely
FECA-PT2 Printed: 06/08/2010 593