The Appeal CommissionThe Workers Compensation Act of Manitoba

Issue 1: Whether or not the worker is required to repay $34,832.00 of his overpayment

Applicable Legislation and Policy

The Appeal Commission and its panels are bound by The Workers Compensation Act (the WCA). Subsection 109.2 of the WCA provides that where a worker receives an overpayment of compensation, the WCB may recover the overpayment as a debt due to the board. The Board of Directors made WCB Policy 35.40.50, Overpayments of Benefits, which sets out the principles established to guide the WCB in recovery of overpayments to workers.

Worker’s Position

The worker’s representative explained that the worker was in receipt of benefits from the WCB and WSIB relating to two injuries that affected different parts of his body. He advised that the worker successfully appealed a WSIB decision which resulted in a retroactive calculation of benefits and the payment of a lump sum. He noted that the lump sum payment and benefit adjustment from WSIB had an effect on the worker’s WCB benefit rate. The WCB recalculated the worker’s entitlement and found that he was overpaid.

The worker’s representative explained that the calculation of benefits on the worker’s claim was complicated because two jurisdictions are involved. He noted there is no mechanism for integrating various provincial compensation systems.

The worker’s representative submitted that the overpayment did not arise from a failure of the worker or the worker’s representative to disclose any kind of benefits the worker received in Ontario. The representative stated that he had advised the WCB of the worker’s appeal in Ontario. When asked whether he advised the WCB of the lump sum payment, the representative advised that he had not personally advised the WCB. The worker advised that he believed he had advised the WCB. The representative stated that any complications on the payment issue were clearly either a miscommunication or misunderstanding.

When asked about the amount of the lump sum payment, the worker advised that he did not know the amount. The worker’s representative also was not aware of the amount of the lump sum, but indicated that it was in the order of magnitude of $40,000.00 to $45,000.00.

With respect to the WCB policy dealing with overpayments, the worker’s representative argued that the WSIB decision that resulted in the lump sum payment was an adjudicative reversal and therefore the resulting overpayment in Manitoba was not to be recovered. In addition, the worker explained that the recovery of the overpayment would create financial hardship for him and his family. He also suggested the overpayment was the result of an administrative error by the WCB. He provided information on his income and financial responsibilities.

Analysis

The first issue before the panel was whether the worker is required to repay $34,832.00 of his overpayment. For the appeal of this issue to be successful, the panel must find that the overpayment need not be recovered or in other words that the overpayment can be forgiven. The panel was not able to make this determination. The panel finds that the worker is required to repay the overpayment.

The panel agrees that the calculation of benefits on this claim is complicated due to the involvement of two compensation systems and two injuries. However, the calculation of the benefits is not in issue, nor is the calculation of the overpayment. The only issue is the recovery of the overpayment.

As a preliminary matter, the panel has reviewed the claim file and finds no confirmation of the worker’s statement that he “believes” he advised the WCB of the receipt of the lump sum payment. The panel finds that the overpayment arose from the worker’s failure to advise the WCB about the lump sum payment and the adjustment to his benefit rate on a timely basis.

The recovery of overpayments is dealt with in WCB Policy 35.40.50. This policy provides that all overpayments will be pursued for recovery unless they fall within a limited range of exceptions. The worker’s representative referred to three exceptions provided by the policy.

The worker’s representative argued that the overpayment on this case arose from an appeal decision in that the worker successfully appealed the calculation of benefits on his Ontario claim and was awarded retroactive benefits by way of a lump sum payment and an ongoing adjustment to his benefit rate. He then argued that the first exception set out in subsection 3(i.) of the policy provides that overpayments resulting from an adjudicative reversal or a reconsideration decision by the WCB, or from a decision of the Appeal Commission need not be recovered.

The panel finds that the exception provided by subsection 3(i.) does not apply to this case. The panel finds that this exception applies only to adjudicative reversals of the Manitoba WCB or Appeal Commission. The panel also notes that the adjudicative reversal in Ontario resulted in a lump sum payment and not an overpayment. The overpayment in Manitoba arose from the failure of the worker to advise the WCB of the Ontario benefit changes and lump sum payment.

The worker’s representative also suggested that the overpayment was due to administrative error by the WCB. Subsection 3(ii.) of the policy provides that overpayments caused by administrative error by the WCB are not recovered. The representative stated that he advised the worker’s case manager about the Ontario appeal decision and that she responded that the WCB would catch the change in benefits on the next questionnaire sent to the worker. The panel notes the representative’s evidence that he did not advise the WCB about the actual lump sum payment and our earlier finding that the worker also did not advise the WCB about the lump sum payment. The panel notes that the WCB routinely adjusts worker’s wage loss benefits up or down based on periodic reviews of the income information received, often on a retrospective basis (such as T4’s). These adjustments are required in order to keep to the WCB’s mandated levels of wage loss benefits (90% or 80%). These adjustments require the full participation of the worker and when made, do not qualify as administrative errors. The panel finds that in regards to the overpayment of $34,832.00, there was no administrative error by the WCB as contemplated in the policy and that the overpayment is not forgiven under this portion of the policy.

The panel notes that the total overpayment was approximately $68,000.00 but that the WCB is only recovering the sum of $34,832.00. The WCB determined that the remainder of the overpayment resulted from a calculation error made by the WCB and was therefore not recoverable pursuant to the policy.

The representative also advised that the repayment of the overpayment was creating a hardship for the worker. Subsection 3(v.) provides that recovery of an overpayment will not be pursued if the recovery, in whole or in part, would create financial hardship for the worker. The worker provided information on the financial impact of the recovery upon him and his family. The panel notes that Appendix A to the policy identifies factors to be considered in assessing hardship. The panel has considered the factors and finds that the evidence does not establish a financial hardship as contemplated by the policy.

The panel finds that the worker is required to repay $34,832.00 of the overpayment. The worker’s appeal on this issue is denied.

Issue 2: Whether or not the effective date of the worker’s permanent partial disability award has been correctly calculated

Applicable legislation and Policy

As the worker was injured in 1969, his benefits including his permanent partial disability are assessed under the WCA as it existed at that time. Subsection 32(1) of the WCA provides for the payment of a PPD award. This provision provides for periodic lifetime payments to a worker to compensate for the physical loss occasioned by a disability.

In accordance with the WCA, the Board of Directors enacted the Permanent Impairment Rating Schedule. Pursuant to this schedule, impairment is assessed when treatment is completed, or when, the medical condition has stabilized and no further improvement is expected. In the case of an injury to the wrist, the schedule provides that permanent impairment is measured by a loss of movement of the wrist or reduction in range of motion.

Worker’s Position

The worker disagrees with the effective date of his PPD award. The worker has asked that an earlier date be implemented. His representative submitted that the original treating orthopedic surgeon contemplated in his progress report that the worker would have a permanent disability. He noted that the orthopedic surgeon reported reduced dorsi flexion. Given the orthopedic surgeon’s reports, the representative submitted that the worker’s disability was complete in 1969. Alternatively he submitted it was complete upon the usual healing times postoperatively by mid 1972.

The representative suggested there is enough medical evidence on the existence of a permanent disability in June 1972. He also referred to a ganglion which was reported in the 1980’s as being a clinical marker.

The representative noted that the claim file was closed by the WCB and as result, with the passage of time, there has been the inability to gather medical and income information. He noted that the worker eventually appealed the WCB decision and the WCB accepted responsibility for the worker’s condition.

He stated that the worker suffered a disabling functional physical impairment, not just limited in the sense of range of motion. He advised that as a result of the injury, the worker had to leave the electrical trade and suffered a loss of income as a result.

Regarding the 1992 effective date, the representative commented that the worker’s condition “went from zero to a hundred” in 1992. He suggested that the date is further back than 1992 and that an orthopedist or professional assessor could make an appropriate determination, a judgment based ruling, based on the medical evidence.