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Printing - FECA-PT2 - National Association of Letter Carriers

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notify the claimant <strong>of</strong> the lump-sum option and the commuted value <strong>of</strong> the remaining period <strong>of</strong> the<br />

award. A sample letter to the claimant is shown at Exhibit 3.<br />

In a case where the claimant is receiving a schedule award and requests a lump-sum payment, yet<br />

it has not been established that the schedule award is not the claimant's source <strong>of</strong> regular income,<br />

the CE must obtain the necessary information. In a letter, the CE should advise the claimant <strong>of</strong><br />

the best interest standard and request the information which would establish whether or not the<br />

claimant has another source <strong>of</strong> regular income sufficient to meet his or her living needs. Exhibit 4<br />

provides a sample letter for this purpose.<br />

The CE should further advise the claimant that if he or she elects a lump-sum payment <strong>of</strong> a<br />

schedule award, it will be paid at the four percent discount rate, and that it represents full and final<br />

compensation payment for the period <strong>of</strong> the award, even if he or she suffers a recurrence <strong>of</strong> total<br />

disability. The claimant must sign an agreement to this effect before any lump-sum award is<br />

issued. Exhibit 3.<br />

c. Death Benefits. A beneficiary in a death case should be advised that the lump-sum<br />

payment to a spouse <strong>of</strong> a deceased employee may not exceed 60 months <strong>of</strong> compensation. Any<br />

such lump-sum award would also be subject to the proviso that the periodic payment <strong>of</strong> survivor's<br />

benefits was not the main source <strong>of</strong> income for the beneficiary.<br />

However, a surviving spouse who remarries before age 55 is still entitled as a matter <strong>of</strong><br />

right to a lump-sum payment equal to 24 months <strong>of</strong> compensation. There is no<br />

discretion in the application <strong>of</strong> section 8135(b) <strong>of</strong> the Act.<br />

If applicable, the CE should also advise the claimant that a lump-sum payment to a widow or<br />

widower under section 8135(a) will not result in an increase in the amount <strong>of</strong> compensation paid to<br />

dependent children. On the other hand, in cases <strong>of</strong> a lump-sum payment under subparagraph (b),<br />

which relates to remarriage before age 55, the claimant should be advised in the letter from the CE<br />

that the lump-sum payment to the widow or widower does result in an increase in the periodic<br />

compensation payments to the dependent children.<br />

<strong>FECA</strong>-<strong>PT2</strong> Printed: 06/08/2010 594

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