Decision #144/07 - Type: Workers Compensation
Preamble
A file review was held on September 4, 2007 at the worker’s request.Issue
Whether or not the worker was overpaid in the 1998 calendar year; and
Whether or not the worker was responsible to repay the overpayment that occurred in 1998.
Decision
That the worker was overpaid in the 1998 calendar year; and
That the worker is responsible to repay the overpayment that occurred in 1998.
Decision: Unanimous
Background
On October 24, 1985, the worker sustained a compensable injury to her low back during the course of her employment in a manufacturing plant.
At the time of her compensable injury, the worker’s wage was $7.28 an hour for a forty hour work week which equaled to regular weekly earnings of $295.20. The worker’s earnings in the 12 months prior to her compensable injury were $13,480.58 which averaged $259.24 per week. As her regular weekly earnings were higher than her average earnings, the higher earnings were used as the basis to establish her pre-accident weekly wage and benefit entitlement.
The worker then obtained new employment as an order desk clerk at $5.00 per hour and received regular wage increases. The worker was paid partial wage loss benefits which were periodically reviewed to make sure they were paid accurately.
On November 23, 1988, the employer provided the WCB with wage increases that the worker would have received if she had remained in their employ. These wage increases were then used to recalculate the worker’s benefit entitlement when the worker was assessed for a permanent partial disability award and the worker received retroactive increases in her wage loss benefits. On October 17, 1995, the WCB received further wage information that resulted in a further increase to the worker’s pre-accident wages up to December 31, 1992. Later, pre-accident wage increases were based on standard indexation rates as per legislation that became effective on January 1, 1992.
On June 30, 1999, the worker was advised that based on a review of her 1998 income tax information, she was overpaid benefits in the amount of $1,290.45. She was told by the WCB that the full amount of the overpayment had to be paid back. Attached with the decision letter was a calculations sheet explaining how the overpayment was arrived at. This overpayment amount was paid in full by the worker to the WCB.
After reviewing the worker’s 1999 income tax information, it was determined that the worker was overpaid benefits in the amount of $250.51. The worker repaid the full amount to the WCB.
File information showed the worker did not receive payments for the 2004 calendar year onward as her average weekly earnings which were inclusive of overtime and profit sharing earnings were higher than her indexed pre-accident wage.
On May 6, 2007, the worker appealed the WCB’s decision that she was overpaid benefits in the amount of $1290.45. She felt that the WCB should not have used her profit sharing and overtime earnings in her wage loss calculations. The case was then forwarded to Review Office for consideration.
On May 17, 2007, Review Office confirmed that the worker was overpaid in the 1998 calendar year and that she was responsible to repay the overpayment that occurred in 1998.
Review Office stated the inclusion of overtime, profit sharing and other bonuses in the calculations of a worker’s post-accident earnings is not discretionary but rather required under both the current legislation and the legislation that was in effect at the time of the worker’s injury. In its decision Review Office made reference to WCB board directive 77/85 and section 45 of The Workers Compensation Act (the Act). The worker subsequently appealed Review Office’s decision to the Appeal Commission and a file review was arranged.
Reasons
Overview
Considering the record as a whole, the panel finds, based on a balance of probabilities, that the worker was overpaid in the 1998 calendar year and that the worker is responsible to repay the overpayment that occurred in 1998.
The Issue
Before examining the applicable section of the Act and the relevant policy, it is important to set out the central issue before the panel. There is no dispute that the worker was partially disabled as a result of her workplace accident, resulting in a loss of earning capacity.
There is also no dispute regarding the general formula in 1985 by which disability benefits (now wage loss benefits) were to be calculated. Essentially, wage loss benefits for temporary partial disability were calculated by:
1) taking the difference between the weekly earnings of the worker after she returns to work (now post accident earnings) and her average weekly earnings at the time of the accident (now pre-accident weekly wage and benefit entitlement); then,
2) dividing the difference by the worker’s average weekly earnings at the time of the accident; then,
3) multiplying the quotient by the maximum weekly compensation to which the worker would have been entitled if she had been totally disabled.
Finally, there is no dispute regarding the appropriate figure for the worker’s pre-accident weekly wage and benefit entitlement.
The central matter in dispute is the appropriate figure to be used for the worker’s post accident earnings in the 1998 year. The worker argues the WCB was wrong to use her profit sharing and overtime hours as part of the post accident earnings calculation. She suggests the overpayment is unlawful in that the WCB erroneously included profit sharing and overtime hours as part of her post accident earnings calculation.
The Relevant Sections of the Act and Policy
At the date of claim, the relevant piece of legislation was The Workers Compensation Act (the Act), W200 as amended by S.M. 1985, c. 51. Section 36(2) of the Act provides for the payment, in the case of temporary partial disability, of wage loss benefits under the formula set out above.
The applicable policy is section 44.80.30.10 which addresses the issue of post accident earning capacity. As the general purpose section of the policy proclaims:
A wage loss system pays a worker based upon the difference between the worker's average earnings before the accident and what the WCB determines the worker is capable of earning after the accident. The policy describes the methods that will be used to calculate the worker's post-accident earning capacity.
In circumstances when the worker is receiving temporary partial disability benefits, the policy is explicitly applicable to the calculation of benefits payable to workers who were disabled as a result of an accident taking place before January 1, 1992.
Section 3 a) of the policy sets out the sources of post-accident earnings from employment. Subsection (i) specifically provides for the inclusion of any income the worker earns from employment. Section 4 provides a list of specific exclusions from post accident earnings, but makes no reference to profit sharing or overtime.
Application of the Policy
In the panel’s view, there can be no doubt that overtime and profit sharing earned from one’s job fit the definition of income from employment as set out under policy 44.80.30.10. They are explicitly captured under ss. 3 a) i) and are not excluded under section 4.
Accordingly, the panel finds, based on a balance of probabilities, that income earned from employment such as overtime and profit sharing is properly included in the calculation of the worker’s post accident earnings in the 1998 calendar year. As a result, the calculation of the overpayment is upheld.
The panel is not aware of any factor which would suggest that the worker should not be responsible to repay the overpayment.
Conclusion
The panel finds that the worker was overpaid in the 1998 year and that the worker is responsible to repay the overpayment that occurred in 1998.
The appeal is denied.
Panel Members
B. Williams, Presiding OfficerA. Finkel, Commissioner
M. Day, Commissioner
Recording Secretary, B. Kosc
B. Williams - Presiding Officer
Signed at Winnipeg this 31st day of October, 2007