Decision #158/17 - Type: Workers Compensation

Preamble

The worker is appealing the decision made by the Workers Compensation Board ("WCB") that the repayment of the overpayment on his claim would not result in financial hardship. A file review was held on October 23, 2017 to consider the worker's appeal.

Issue

Whether or not repayment of the overpayment would result in financial hardship.

Decision

That repayment of the overpayment would not result in financial hardship.

Background

The worker has an accepted claim with the WCB for a right wrist injury that occurred in October 2009 during the course of his employment as a machine operator.

On March 8, 2017, the worker's case was the subject of a file review at the Appeal Commission as the worker disagreed with the decision made by the WCB that recovery of his overpayment from the annuity fund did not result in a financial hardship for the worker.

On March 14, 2017, under Decision No. 28/17, it was determined by the appeal panel that it was inappropriate for the WCB to remove funds from the worker's annuity. The appeal panel also stated that it made no further findings as to whether the overpayment would result in financial hardship as the issue had not been fully addressed by the WCB.

In a note to file dated March 28, 2017, a collections supervisor stated:

A property search confirmed the owner (worker) owns his own property. Collections has determined that hardship does not exist. To secure the overpayment a lien may be placed against the property to secure the debt. The worker would then be responsible for paying all of the legal costs involved with the registering of the lien.

In a WCB decision dated April 5, 2017, the worker was advised that after a check of his assets, it was the WCB's opinion that hardship did not exist with consideration given to Policy 35.40.50. As such, it was confirmed that he was to repay the overpayment in the amount of $3,281.78 that was in keeping with the decision made by the Appeal Commission. On May 2, 2017, a worker advisor, acting on the worker's behalf, appealed the decision to Review Office.

In a decision dated May 26, 2017, Review Office confirmed that financial hardship did not exist, and that collections may continue on the overpayment.

Review Office noted that it reviewed the financial statement sent in by the worker on June 24, 2016 and saw calculation errors (discrepancies) in his numbers that show hardship. It found that the evidence did not support repayment of the overpayment would create a financial hardship for the worker or his family. The worker's financial obligations, offset by his wage loss entitlement and his demonstrated financial wherewithal, show there was no financial hardship.

On May 31, 2017, the worker advisor appealed Review Office's decision to the Appeal Commission and a file review 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 WCB's Board of Directors.

The issue before the panel was whether the worker is required to repay the overpayment of compensation benefits. Subsection 109.2 of the Act provides that where a worker receives an overpayment of compensation, the Board may recover the overpayment from the worker.

In accordance with the Act, the WCB Board of Directors established WCB Policy 35.40.50, Overpayment of Benefits (the “Policy”) which sets out principles with respect to recovery of overpayments to workers. The policy applies to overpayment decisions made on or after May 1, 2017. The Review Office decision was made on May 26, 2017, and accordingly that Policy is applicable in this appeal.

Section D of the Policy sets out the situation in which the WCB will not pursue an overpayment. Subsection (2) provides that WCB may decide not to pursue an overpayment when recovery of the overpayment, in whole or in part, would create financial hardship for the injured worker or the worker's dependents.

Section E of the Policy provides that overpayments which remain outstanding will continue as a receivable for up to six years, during which time recovery action may be reinstated if the circumstances contributing to non-recovery change. For example, an overpayment may be pursued at a later time if the conditions creating financial hardship no longer exist.

The worker is appealing the collection of the overpayment on the grounds of financial hardship.

Worker's Position

The worker was represented by a worker advisor. His representative submitted that in accordance with the Overpayment Policy as it was applicable in June 2016, the overpayment should be written off. The worker's representative asserted that financial hardship does exist, because the worker is unable to repay the overpayment. She submitted that:

It is our position that prior to any recovery process, the WCB has an obligation to do a proper investigation and acquire the necessary financial information prior to any recovery process to assess whether any worker is able to repay the overpayment. Decisions should not be made on speculation, assumptions and injection of personal opinion, as it has been done in this case.

The worker's representative submitted, in part, that:

• financial hardship exists 

• the worker's Monthly Financial Statement of June 2016 shows the worker did not have the financial ability to repay the overpayment without causing undue hardship to his family 

• the worker's benefits are the only source of income in the household where his wife does not work and there are 4 dependents. 

• the WCB considered information which was based on personal opinions 

• the worker is in an even greater state of hardship than in June 2016 because his vocational rehabilitation plan has ended and he has been deemed capable of earning the minimum wage. 

• the worker's weekly benefits have been reduced to $270.00

The worker's representative asked the panel to find there is a financial hardship and to write off the full amount of the overpayment, $3881.78. Further, the worker's representative noted that certain deductions were taken off the worker's weekly benefits before the worker had provided financial information to support his claim for hardship. She noted that $600.04 was deducted and asked that the amount be repaid to the worker.

Analysis

The issue before the panel is whether repayment of the overpayment would result in financial hardship.

For the worker's appeal to be approved, the panel must find that the repayment of the overpayment would cause a hardship to the worker or his dependents. The panel did not find that repayment would result in a financial hardship.

In reaching this decision, the panel considered the factors listed in the Administrative Guidelines attached to the Overpayments Policy. While the Guidelines are not binding on the panel, the panel found them to be reasonable for the purpose of our decision. The factors include but are not limited to:

• employment status 

• earning capacity current sources of income, including income assistance, employment insurance benefits, CPP, investments, etc. 

• opportunities for re-employment, if not currently employed 

• medical restrictions, which may prevent the worker from increasing earning capacity 

• personal or vocation characteristics which may have an impact on earning capacity 

• the nature of current expenses, i.e. mortgage, vehicle payments, family support, childcare 

• assets, i.e. vehicles, property, home 

• statements available from a financial/credit counseling agency 

• declaration of bankruptcy where the WCB has been listed as a creditor, bankruptcy proceedings or discharge in personal bankruptcy 

The panel notes that the worker provided a list of expenses on June 24, 2016. The panel reviewed this list and concluded, taking into account the factors noted above, that the worker would have sufficient income to begin repaying his indebtedness. The panel notes that the worker listed a significant number of discretionary lifestyle-oriented expenses.

The panel notes that the Administrative Guideline to the Policy provides:

In general a minimum recovery rate of 20% of the total benefit payable to the debtor, will be recovered toward the overpayment.

While the amount of the weekly or biweekly recovery is not before it, the panel is of the view that using the minimum recovery rate of 20% of the total benefit payable to the debtor from the worker's benefits payable would be a reasonable payment. The worker's current benefit is $540.00 biweekly, accordingly 20% would be approximately $108.00 bi-weekly.

Regarding the sum of $600.00 which the WCB has already collected, the panel notes that the sum of $200.00 was deducted from 3 biweekly payments. This is approximately 20% of the benefit payable at the time that the deduction was made which the panel considers to have been reasonable given the worker's benefit payable at that time. The panel finds that it is not reasonable for the WCB to repay this sum which was owed by the worker.

The worker's appeal is dismissed.

Panel Members

A. Scramstad, Presiding Officer
A. Finkel, Commissioner
M. Kernaghan, Commissioner

Recording Secretary, B. Kosc

A. Scramstad - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 21st day of November, 2017

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