The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

An Appeal Panel hearing was held on February 23, 1999, at the request of the claimant. The hearing was adjourned sine die and was reconvened on May 20, 1999. On September 1, 1999, the Panel met to render its final decision.

Issue

Whether the claimant has been overpaid; and

Whether the claimant must repay the overpayment.

Decision

That the claimant has been overpaid; and

That the claimant must repay the overpayment.

Background

In August 1995, the claimant sustained right elbow and shoulder injuries when he fell off a roof. The claim was accepted by The Workers Compensation Act (WCB) and benefits were paid accordingly.

Further file documentation revealed that, unknown to the WCB, the claimant was receiving collateral benefits from a private insurance company and these were not taken into consideration when calculating his compensation benefits. As a result, the WCB eventually determined that the claimant had been overpaid in the amount of $7,314.72 and that the overpayment must be fully repaid. With the assistance of a worker advisor, the claimant appealed the decision to the WCB's Review Office.

On October 10, 1997, Review Office confirmed that private insurance benefits were considered to be a collateral benefit and the receipt of which created an overpayment of WCB wage loss benefits paid to the worker. Review Office relied on Section 41(1) and 39(5) when rendering its decision. Review Office then referred the case to the Assessment Committee to determine whether the overpayment would cause undue financial hardship for the claimant.

The Assessment Committee met on November 4, 1997 to discuss the case. The Committee recommended that the claimant seek assistance through Community Financial Counseling Services. On November 27, 1997, the claimant provided financial information to the counseling service but as he did not submit the proper materials, the service was unable to pursue the matter. In a letter, dated March 12, 1998, the claimant's worker advisor requested that the following issues be considered: "Whether collection of any overpayment on this claim would cause undue financial hardship on the claimant." and "Whether collection of any overpayment should therefore be waived." The worker advisor contended that the financial information provided by the claimant showed that the claimant would be in a deficit position if the WCB collected the monies that they say were owing.

On August 12, 1998, a meeting was arranged which included a WCB representative, the claimant, and worker advisor. The claimant was asked to provide his 1997 Income Tax Statement, Notice of Assessment, Property Tax Statement, Mortgage Statement and current credit card statements. File documentation showed that the claimant provided the following documents: a copy of his Property Tax Statement and his 1997 Income Tax and Benefit Return statement.

On September 28, 1998, the Assessment Committee determined that the claimant was required to pay the overpayment in the amount of $7,314.72 to the WCB. The Committee referred to WCB policy 35.40.50 in its decision. The Committee stated, "To determine undue hardship, a claimant's income is reviewed in line with the guideline for Basic Social Assistance in Manitoba. Income figures under this program relating to a husband and wife is $9,636.00 per year or $803.00 per month. In the case at hand, the combined income of the claimant and his spouse is approximately at a net figure of $1,886.61 per month. This places the claimant over the Basic Social Assistance guideline. Furthermore, the committee reviewed monthly income in comparison to monthly expenses and also considered the claimant's assets in place to settle the overpayment." The Committee pointed out that without the claimant's full disclosure, it was left with no choice, but to base its decision on the available information.

The above decision was appealed by the claimant in December 1998. On February 23, 1999, an Appeal Panel hearing was held and was adjourned sine die in order for the claimant to submit the following information before reconvening the hearing: a copy of his application for disability benefits and a full and complete financial statement regarding his financial status.

On May 20, 1999, a reconvened hearing was held with the claimant's daughter in attendance. The hearing was again adjourned sine die. The Panel suggested to the claimant that his daughter prepare a financial statement on his behalf and then arrange a meeting with the WCB's Collection Officer. The purpose of the meeting would be to discuss the claimant's suggested financial hardship and to develop an appropriate repayment plan.

The claimant's daughter subsequently provided an income/expense report for 1997/1998. On July 26, 1999, the Collection Officer wrote to the claimant indicating that "In accordance with the definition of hardship stated in the overpayment guidelines, your income for both years exceeds the amounts outlined. You are required to pay the outstanding balance."

In a memo, dated August 5, 1999, the Collection Officer documented a telephone conversation he had with the claimant. Basically, the claimant stated he was prepared to repay $3,500.00 as full and final settlement in October 1999. The claimant indicated that he did not wish to pursue appealing the overpayment further and felt that the whole overpayment issue/collateral benefits was unfair.

On August 16, 1999, the claimant was provided with a copy of the above memo and was asked to provide rebuttal argument. On September 1, 1999, the Panel met to render its final decision.

Reasons

The claimant attended the hearing process before the Appeal Commission on two occasions, once in the company of his wife and secondly with his daughter. Initially, he appeared not to understand that he had been overpaid benefits or appreciate that both the Workers Compensation Act (the Act) and the policy of the WCB required repayment of the overpayment in full.

File documents record a number of discussions having taken place between the WCB and the claimant with respect to the overpayment issue. None of these discussions, however, had any apparent impact upon the claimant's gaining a better understanding of his predicament. Eventually, the WCB was left with no alternative but to commence collection proceedings including garnisheeing his bank account. This course of action produced the desired effect and once again the claimant initiated discussions in an attempt to resolve the question of overpayment.

The Appeal Panel attempted to explain to the claimant and his wife how the overpayment had arisen and what financial information would be needed to be provided in order for him to qualify under the hardship provisions of the WCB's policy. Since the claimant did not have this information readily available, the hearing was adjourned to a future date. The claimant's daughter was invited to attend the next hearing as she had been assisting the claimant with the preparation of his financial statements and tax returns.

At the reconvened hearing, the Appeal Panel explained to the claimant's daughter about the overpayment and what further information was needed before we could make an informed decision regarding the issue being appealed. Specifically, the daughter was asked to assist her father with the preparation and the filing of updated financial statements with the WCB so that it could reconsider whether the collection of the overpayment would cause undue hardship for the claimant.

According to the financial information filed, the claimant's economic standing did not come within the meaning of hardship as defined in the WCB policy guidelines. In this case we see no reason why the guidelines should not be applied. We, therefore, find that the claimant has been overpaid in the amount of $7,314.72 as a result of his receiving collateral benefits while at the same time he was collecting WCB benefits. The sum of $7,314.72 must be repaid and we encourage the claimant to contact the WCB to make mutually agreeable arrangements for the repayment of this overpayment. Should no contact with the WCB be made, then the claimant should bear in mind that the WCB has the legislative mandate to pursue its right of recovery for this money.

Panel Members

R. W. MacNeil, Presiding Officer
A. Finkel, Commissioner
R. Frisken, Commissioner

Recording Secretary, B. Miller

R. W. MacNeil - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 14th day of September, 1999