Printing - FECA-PT2 - National Association of Letter Carriers

e. Effective Date.
(1) In fraud cases, compensation should be terminated effective the date of the
conviction, which is the date of the verdict or, in the case of a plea bargain, the date the
claimant made the plea in open court (not the date of sentencing or the date court papers
were signed). The Office of the Inspector General and the Regional Solicitor may be able to
help obtain documents and/or determine the date of the conviction.
(2) In cases involving convictions for felonies unrelated to claims under the FECA, but
which result in imprisonment, the CE will need to suspend or adjust benefits effective the
date of imprisonment. The CE should advise the claimant by letter of the action taken, the
reason for it, and the need to notify OWCP upon release from prison so that benefits can be
adjusted if warranted.
f. Termination in Cases Involving Fraud.
(1) District office staff who learn that such legal action is under way and that a
conviction may result should ask the investigatory body to keep them advised of the
proceedings so that benefits can be promptly terminated if the conviction occurs. Where a
conviction appears imminent, it may be advisable to terminate periodic roll benefits and pay
compensation on the daily roll to help avoid overpayments.
(2) No pre-termination notice is required before issuing a formal decision, which should
be prepared for the District Director's signature. The decision should take the form of a
letter which terminates further entitlement to FECA benefits and contains appeal rights.
See the sample letter shown as Exhibit 10.
g. Payments in Cases with Felony Conviction/Imprisonment.
(1) If the claimant has eligible dependents, payment should be calculated by applying
the percentages of section 8133(a)(1) through (5) to the claimant's gross current
entitlement, i.e., 50 percent of gross current entitlement to the spouse if there is no child,
or 45 percent to the spouse if there is a child (children), with 15 percent to each child, not
to exceed 75 percent of gross current entitlement.
The CE should manually calculate the entitlement using the appropriate percentage as
stated above and set up the payment using the gross override function with appropriate
deductions for health benefits and optional life insurance. Adjudication and status codes
should remain the same. The check should be made payable to the beneficiary or guardian,
in the case of a minor.
(2) If the decision concerning entitlement is pending when the claimant is convicted and
sent to prison, and compensation is due for a period of time prior to imprisonment, payment
for that period may not be made until the claimant's release. Direct payment may be made
to dependents for periods of disability during imprisonment, however.
(3) When the claimant is released from prison, the benefits must be restored to the
FECA-PT2 Printed: 06/08/2010 626