The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker is appealing the decisions made by the Workers Compensation Board ("WCB") that established his average earnings prior to his compensable injury, that he had been overpaid and is required to repay the overpayment. A hearing was held on February 9, 2015 to consider these matters.

Issue

Whether or not the worker's average earnings are correct;

Whether or not the worker has been overpaid; and

Whether or not the overpayment must be repaid to the WCB.

Decision

That the worker's average earnings are correct;

That the worker has been overpaid; and

That the overpayment must be repaid to the WCB.

Decision: Unanimous

Background

The worker has an accepted claim with the WCB for a left foot injury occurring in the workplace on September 8, 2003.

Over the course of the claim, the worker was paid various benefits from the WCB which included vocational rehabilitation assistance. File records indicated that a deemed post accident earning capacity was implemented and the worker's benefits were reduced.

On July 20, 2011, the WCB advised the worker that he had been overpaid compensation benefits in the amount of $13,869.38 as it was determined that his actual earnings in 2010 were significantly higher that his earning capacity on file.

On April 19, 2012, Review Office determined that it was correct to base the worker's average earnings on $1,111.00. Review Office noted that the worker's average earnings were indexed effective October 1, 2005 to $1,149.45. At that time, the maximum earnings for accidents occurring in 2003 was $1,106.63 and the worker's wage loss benefits was based on this amount. "This meant that, ignoring the effect of a deem or a collateral benefit, the worker's benefits increased from $590.87 to $617.40 and this was indexed each October since."

Review Office referred to the worker's submission that "WCB erred when calculating what my income would have been if I had been able to work to full capacity as an iron worker welder." Review Office interpreted this to mean that the worker assumed that his average earnings would increase in lockstep with increases in the rate of pay of an uninjured journeyman welder. Review Office noted "They do not. They are initially limited by the maximum and the only increase provided for is the indexing detailed above. It follows that the Review Office is of the opinion that the worker's average earnings have been correctly calculated."

Review Office noted that in 2010, the worker's benefits were based on a deem of $720.25 [per week] from January 1 and $716.76 beginning October 1. Any amount he earned above that amount would result in him being overpaid. Review Office noted that the worker had been routinely advised of this by letter dated November 16, 2010 and that the same or similar letter was sent to the worker annually. The worker earned $1,218.40 [per week] and as a result, he was overpaid $13,869.38. Review Office indicated that based on the WCB's overpayment policy, the worker was required to repay the overpayment. On October 18, 2014, the worker appealed Review Office's decision to the Appeal Commission and an oral hearing was arranged.

Reasons

Applicable Legislation and Policy

The Appeal Commission and its panels are bound by The Workers Compensation Act (the “Act”), regulations and policies of the Board of Directors.

The worker has an accepted claim for an injury to his left foot. The worker appealed the following issues to the Appeal Commission:

1. Whether or not his average earnings are correct.

Section 45 of the Act deals with the calculation of average earnings. Subsection 45(1) of the Act provides:

Calculation of average earnings

45(1) The board shall calculate a worker’s average earnings before the accident on such income from employment and employment insurance benefits, and over such period of time, as the board considers fair and just, but the amount of average earnings shall not exceed the maximum annual earnings established under section 46.

Section 46 of the Act provides for maximum annual earnings for claims arising after December 31, 1991. This provision applied to claims between 1991 and 2005.

2. The worker is appealing the WCB determination that he has been overpaid.

Subsection 109.2 of the Act provides:

Recovery of overpayments

109.2 Where a person receives an overpayment of compensation, being an amount that the board determines is in excess of that to which the person is entitled, the board may recover the overpayment from the person, or from the executors or administrators of the person, as a debt due to the board.

3. The worker is appealing the WCB decision that he must repay the overpayment.

WCB Board Policy 35.40.50 (the “Overpayments Policy”) deals with recovery of overpayments of benefits. The Overpayments Policy sets out the principles established by the WCB Board of Directors to guide the WCB in its recovery of overpayments.

Worker's Position

The worker was self-represented. He outlined his reasons for appealing the WCB decisions.

The worker described the workplace accident which resulted in a serious injury to his left foot. He noted that as a result of the injury the WCB placed medical restrictions on his ability to work. Over time, he recovered to the point that he felt he could return to his prior trade, but the WCB refused to lift his medical restrictions even though his family physician found him fit to return to work. He said that eventually he returned to work in his trade and has been steadily employed since then. He also said the WCB lifted the restrictions after he underwent testing at the WCB.

The worker submitted that he lost income as a result of the restrictions. He also said that he lost pension contributions because he was not able to return to his trade. He does not feel that he owes the WCB anything.

The worker said that he did not understand the formula used by the WCB to calculate his average earnings but acknowledged it was explained to him. He said that his pre-accident benefits included a housing allowance when on projects out of town which increased his total income but was not taxable.

Regarding the WCB's efforts to collect the overpayment, he said that the staff spoke to him in a demeaning manner.

Regarding his foot, the worker said that it hurts every day. He advised that he has lost mobility in his foot. He takes an Advil each morning for stiffness.

He told the panel that his trade has changed and that he is now able to work safely in his trade. He believes his fitness level is higher now than 7 or 8 years ago. His duties vary, some days he stands in one place, others he is walking all day.

The worker confirmed the income used by the WCB in calculating his income for 2010. He also confirmed that for the years 2010 to 2013, his earnings exceeded the Canada Pension Plan maximum assessable earnings.

Employer's Position

The employer did not participate in the hearing.

Analysis

1. Whether the worker's average earnings are correct.

For the worker's appeal to be successful, the panel must find that the calculation is not correct. The panel was not able to make this finding.

While there are numerous formulas for determining the amount of a worker's average earnings, in this case the amount of average earnings was limited by subsection 46(2) of the Act which provided a restriction on the amount of the worker's earnings that are covered by the WCB. In 2003, the maximum covered income was $1069.62 per week ($55,620.00 annually). The WCB calculated the worker's earnings as $1,111.00 per week. Because of the above noted subsection of the Act, his average earnings for WCB purposes were calculated at $1069.62 per week. This sum was indexed annually, pursuant to subsection 40(2) of the Act, commencing in 2005, resulting in his indexed 2010 average earnings being calculated as $1347.11.

The panel considered the calculations made by the WCB, including indexing since 2005, and finds that the worker's average earnings were correctly calculated.

The worker was concerned that he was earning more than the average earnings amount and that the annual indexing did not represent his true annual increase in income. As already noted, the worker's average earnings were limited by the provisions of the Act. The panel is not able to make an adjustment for this.

The worker also noted that he wanted his medical restrictions to be removed so that he could return to his trade. He said the WCB's initial refusal to remove the restrictions and the delay in removing them prevented him from returning to work in this trade, resulting in a significant loss of income. The panel finds that this issue is not before it and is unable to make a decision on this concern.

The worker's appeal of this matter is dismissed.

2. Whether the worker has been overpaid.

In calculating the amount of the earnings, the WCB relied upon information provided by the worker. As it had in prior years, the WCB wrote to the worker on November 16, 2010. The letter stated in part:

"This letter is being sent to confirm any other income you may be receiving.

The amount the Workers Compensation Board pays you can be affected by other income you receive. To make sure the amount we are paying you is correct, it is important that we know about any other money you are receiving. Examples of other income includes overtime, wage increases, bonuses, second jobs, collateral benefits from other sources, etc. (as outlined in the attached sheet.)...

You can help us prevent overpayments and the inconvenience they can cause by telling us of any change in your income. If we pay more than you are entitled to receive, we have to collect it back from you."

In response, the worker completed the form that was attached to the letter. He noted that he had a second job with a welding company but did not indicate the amount of income. The WCB continued to issue wage loss benefits without knowing that the worker had an increased income.

The panel considered the amount of wage loss benefits paid to the worker and the income earned by the worker. The panel noted that calculations made by the WCB found that the worker had been overpaid wage loss benefits in the amount of $13,869.38. For the period from January 1 to September 30, 2010 (39 weeks), the worker was paid wage loss of $293.77 but should have only been paid $25.39 per week. For the period of October 1 to December 31, 2010 (13.2 weeks), the worker was paid wage loss benefits of $298.45 per week but should have only been paid $40.68 per week. The panel reviewed the calculations and found the total overpayment of wage loss benefits was $13,869.38.

The panel finds that the worker was overpaid. The worker's appeal of this issue is dismissed.

3. Whether or not the worker must repay the overpayment of wage loss benefits.

The recovery of overpayments from workers is dealt with under Policy 35.40.50, Overpayments of Benefits.

The policy provides that all overpayments, exceeding $5.00, will be recovered subject to the following:

3. All overpayments receivable will be pursued for recovery, unless:

(i) they resulted from an adjudicative reversal or a reconsideration decision by the WCB, or from a decision of the Appeal Commission; or

(ii) they resulted from either an administrative error by the WCB, or the receipt of incorrect information from an employer that affected eligibility or the amount payable. The exception to this provision is that the overpayment will be pursued if the WCB considers that the error or incorrect information was so material or obvious that the worker should have recognized it and reported it to the WCB; or

(iii) new information relevant to entitlement was known to the worker and was not provided to the WCB, but it resulted in an overpayment of less than $50; or

(iv) the amount receivable is not cost-effective to pursue; or

(v) recovery of the overpayment, in whole or in part, would create financial hardship for the worker and/or the worker's dependants; or

(vi) the worker has died, unless it is clear that the estate has sufficient funds available

(vii) to repay the overpayment; or

(vii) the overpayment occurred more than three years prior to its discovery by the WCB.

The panel has reviewed the criteria and finds that the circumstances of this appeal do not fall into the exceptions noted above. The overpayment resulted from the worker's failure to advise the WCB of his increased earnings. The panel specifically considered whether the collection of the overpayment would result in a hardship to the worker and found that no hardship would result. The worker is a qualified trades welder and has been employed in his trade since he returned to work in late 2010. While, at the time of the hearing, he was not working, he believes that he will be able to find work in his field in the near future. The panel finds that the requirement to repay the overpayment does not create a hardship for the purposes of the policy.

The worker is required to repay the overpayment of wage loss benefits. The worker's appeal of this issue is dismissed.

Panel Members

A. Scramstad, Presiding Officer
B. Simoneau, Commissioner
P. Walker, Commissioner

Recording Secretary, B. Kosc

A. Scramstad - Presiding Officer

Signed at Winnipeg this 19th day of February, 2015