The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker is appealing the decision made by the Workers Compensation Board ("WCB") that the worker had been overpaid benefits in the amount of $3,086.68 for 2016 and $703.44 for 2017 and that the overpayments must be repaid. A file review was held on January 15, 2018 to consider the worker's appeal.

Issue

Whether or not the worker was overpaid benefits in the amount of $3,086.68 for 2016 and $703.44 for 2017; and

Whether or not the overpayments must be repaid.

Decision

The worker has been overpaid benefits in the amount of $3,086.68 for 2016 and $703.44 for 2017; and

The overpayments must be repaid.

Background

The worker injured her lower back on December 12, 2000 while working as a registered nurse. Her claim was accepted by the WCB and various benefits were paid. Vocational rehabilitation assistance, including educational upgrading, was provided to the worker as she could not return to the position she had prior to the accident due to compensable restrictions. The worker found alternative employment and she was advised by the WCB on November 4, 2011 of her deemed established earning capacity and the partial wage loss benefits that would be paid. She was also advised that her pre-accident gross average earnings and post-accident earnings/earning capacity would be indexed annually in January.

On August 19, 2016, the worker advised the WCB that she had received a pay increase and retroactive benefits and submitted two paystubs indicating the retroactive pay on one and the pay increase on the second. During a conversation with the WCB on September 9, 2016, the worker was advised that her new earnings were within the 5% threshold and no change was required to her established earning capacity. On December 6, 2016, the worker submitted her current paystub with her year-to-date earnings, as requested by the WCB on November 24, 2016 as part of its yearly indexing. The worker also advised the WCB that she accepted a new position and would be starting on January 30, 2017. She was advised that her new hourly salary would make her earnings greater than the threshold for her earning capacity. A re-calculation was performed by the WCB after receipt of further information from the worker's employer. On May 15, 2017, the worker was advised that she was overpaid $3,086.68 for 2016 and as she was no longer entitled to wage loss benefits due to her new position, she was overpaid $803.44 for 2017.

The worker requested reconsideration of the WCB's decision to the Review Office on June 5, 2017 as she felt that she had provided the WCB with the requested information regarding her rate of pay and that the WCB had erred in their calculations of her wage loss entitlement.

In their June 29, 2017 decision, Review Office determined that there was an overpayment of $3,086.68 for 2016 and $703.44 for 2017. Review Office found that the overpayment for 2016 occurred as a result of the worker's retroactive wage increase and that it would have been reasonable for the worker to know that an overpayment would occur. Regarding the overpayment for 2017, Review Office noted that the worker's actual income from her employment was higher than her established pre-accident earnings and accordingly, she would not have been entitled to partial wage loss benefits. Review Office also noted that $100.00 had been withheld from one of the worker's payments in 2017 (applied towards the 2016 overpayment) and accordingly, the overpayment was reduced to $703.44. As the 2016 and 2017 overpayments were more than 5% compared to the estimated wage used to calculate the worker's partial wage loss benefits, Review Office determined that the amounts must be repaid.

The worker filed an application to appeal with the Appeal Commission on August 18, 2017. An oral hearing was arranged for January 15, 2018.

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 worker has an accepted claim for an accident occurring on in 2000 when she sustained an injury while working as a nurse. The worker returned to work and continued to receive wage loss benefits. There are 2 issues in this case, the worker appealed the WCB's decisions that she has been overpaid and that she must repay the overpayment.

The statutory provisions and relevant WCB Board policies are:

WCB Board Policy 44.80.80.20, Loss of Earning Capacity Review, (the "Earnings Review Policy") applies to worker's whose earning capacity may change during the period the worker is on benefits. In this case the worker's earning were subject to change and accordingly the policy is relevant in addressing the issues raised by the worker. The policy sets out a process for the review of a worker's loss of earning capacity. The policy acknowledges that a worker's loss of earning capacity may change several times during the period the worker is receiving benefits. The policy describes how, and under what circumstances, the loss of earning capacity will be reviewed and adjusted. It provides, in part: 

2. When loss of earning capacity reviews will be conducted for workers injured on or after January 1, 1992 

… 

iii) At any time there is a significant change in circumstances that may affect the worker's actual or potential earnings;

4. Purpose of the loss of earning capacity review 

• To adjust the previous benefits based on a comparison between the worker’s actual loss of earning capacity at the date of the review and the loss of earning capacity estimated at the time of the previous review. 

• To provide a new estimate of the loss of earning capacity to establish the worker’s benefits until the next review. 

5. Adjustments to the previous year’s benefits based on the comparison of actual to estimated loss of earning capacity for the previous year.

• When the actual post-accident earnings are within 5% of the estimated earning capacity, there will be no adjustment to the worker’s benefit. 

• When the actual post-accident earnings are less than the estimated earning capacity by 5% or more, the worker will receive a retroactive benefit payment. 

• When the actual post-accident earnings are greater than the estimated earning capacity by 5% or more, the WCB will establish an overpayment.

  Subsection 109.2 of the Act deals with cases where a worker has been overpaid. It 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.

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's letter of appeal indicated, in part, that:

I am appealing this decision because I was completely forth coming (sic) with my Case manager as any increase came through. August 26/16 I faxed the current wage increase on PP16 an increase to $34.928/hr. along with the retro-pay PP14 $2416.57, pay stub. I had also received a 2nd retro pay PP016 of $946.97, August 19/16. All this information was sent to my case manager. On Aug 30/16 [case manager] sent a claim note to [payment assessor] to "please review the worker's recent pay stub…" response from [payment assessor] Sept. 2/16 11:02 "prior and current earnings are still within 5% variance.

I phoned my CM and spoke with him and he told me that there was no over payment everything was within range…

The pay assessor had the YTD earning on both occasions. Memo on file from payment assessor Sept. 2/16 states 2016: Pay period "July 24/16 - Aug 06 = @2109.42 wks = 1054.75/wk ECA 1109.86."

"It is within the allowable 5% variance." My YTD at that time was $43,004.82. Which a payment assessor specialist should have seen a Huge red flag.

I see this as a huge incompetent oversight when so many eyes have been over it that the Retro payments were not discovered until doing the December 8/16 annual review. …I was also made to feel as I had done something wrong and deliberately withheld information, when indeed it was just the opposite. The case manager withheld information, which caused this situation to become out of control, ending in this outrageous amount I am being asked to repay.

I respectfully ask that the board claim responsibility for this large discrepancy and take ownership of their error and forgive the over payment in its entirety.

In the over payment (sic) claim for 2017 for partial wage loss in the amount of $80.44 also be reevaluated as I was still eligible for wage loss benefits until January 29/17. I started my new position Jan.30.17. I am sure I do not owe 800 dollars for one day. I had also asked that no further payments were to be sent out after Christmas until this situation had been resolved. However WCB continued to send out payments. …

Employer's Position

The employer did not participate in this appeal.

Analysis

The panel notes that the WCB has established wage loss benefit overpayments to the worker for both 2016 and 2017, based on documentation that it received. The worker's overpayment occurred due to ongoing adjustments to wages paid to the worker by her employer in 2016 and 2017 that were greater than the estimated wages (and partial wage loss benefits) that had been established as of January 1, 2016. Some of the adjustments were retro-active in nature.

Pursuant to the Earnings Review Policy, the WCB is required to review and make adjustments to the previous year's benefits based on the comparison of actual to estimated loss of earning capacity for the previous year. In our review of this Policy and the attached Administrative Guidelines, the timing of the adjustments can be variable, but there is a clear framework for when and how the adjustments are done. The panel interprets the Policy and Guidelines as setting out a standard practice of an annual earnings review, at which time discrepancies are identified, overpayments/underpayments are established, and adjustments to estimated wage loss benefits for the next year are implemented. The Policy further provides that a review may be triggered (outside of the annual review) where there is a significant change in earnings circumstances (Policy provision A.2.iii), which is clarified as 5% of the estimated earning capacity.

1. Whether the worker has been overpaid benefits.

The panel reviewed the 2016 and 2017 overpayments that were established by the WCB, to determine whether they are accurate, based upon the information and calculations in the file. The panel finds that the worker was overpaid benefits for the two years in question, and agrees with the WCB calculations as to the amount of the overpayments.

2016 Overpayment

The panel reviewed the WCB's calculation for the 2016 overpayment and finds that the calculation is correct. The overpayment for 2016 was calculated at $3,086.68. The worker's pre-accident earnings as of January 1, 2016 were compared to the worker's actual income earned in 2016.

The worker's actual gross earnings for 2016, as provided to WCB by the worker's employer, was divided by the number of work weeks and average $1,222.94 per week. The partial wage loss calculation established weekly earnings of $1,109. The worker was entitled to WCB wage loss benefits in the amount of $5,937.01 ($113.54 per week) for 2016. However, the worker was paid wage of $9,023.69 and therefore was overpaid $3,086.68.

The panel notes that the review process of calculating the worker's 2016 wage loss benefit entitlements identified significant increases to the worker's actual 2016 earnings that were triggered by her receipt of retroactive lump sum payments under a new collective agreement and other pay increases.

2017 Overpayment

The panel reviewed the calculation for the 2017 overpayment. The information on the file indicates that in early 2017, the worker was paid $177.52 and $525.92 for a total of $703.44 in wage loss by the WCB. The evidence discloses that the worker had taken on a term position that provided a significant increase in her wages that placed her actual earnings above her pre-accident earnings. Accordingly, she was not entitled to wage loss for 2017. The panel finds that the worker was overpaid benefits in 2017, as calculated by the WCB, in the amount of $703.44.

2. Whether or not the overpayments must be repaid.

2016 Overpayment

The worker's submission emphasizes that she had contacted her case manager in August 2016 and flagged her increase in wages and her desire to adjust her WCB benefits at that time in order to avoid an overpayment at the end of the year. The worker's position was that the case manager had advised that there was no overpayment and that a WCB payment assessor had stated that the "prior and current earnings are still within 5% variance." This left a huge overpayment which was as a result of a WCB error issue that should be forgiven in its entirety. The worker has also stated that the case manager's comments that there was no overpayment, because of the small size of the variance being within range, meant that there was no overpayment.

With due regard to the worker's position, the panel takes a different view of the WCB's actions in August and September 2016. The panel finds that the WCB case manager and payment assessor were simply implementing the Earnings Review Policy, and there was no administrative error at that time. The panel does note that the worker did identify an increase in her wages (and the potential for an overpayment) to her case manager, but finds that, by Policy, the WCB was not automatically obliged to initiate a full loss of earnings capacity review at that time; as noted earlier, these reviews are usually done annually (with the process starting in November) and it is only where there is a significant change that the process would start earlier. In this case, the panel notes that there was substantial and significant financial information added to the file that was only available after year end that affected the size of the overpayment. This evidence was not available to the payment assessor at the time that the file was reviewed on September 2, 2016, and the panel finds the preliminary assessment, of a less than 5% variance, to have been reasonable.

The panel further finds that the WCB's decision not to initiate an earlier review does not, in any event, automatically warrant a decision that the overpayment established as part of the annual review should be forgiven. The file evidence discloses that the worker has struggled with overpayments and repayment issues in previous years with WCB. In this case, the panel notes that the worker's initial contact with her WCB case manager in August 2016 indicates that the worker was fully aware of an impending overpayment, and later evidence suggests that the worker was unable to pre-plan her finances to avoid the overpayment once it was finally calculated. This does not remove the worker's obligation to repay the overpayment that she had been knowingly receiving from WCB.

Section 5 of the Loss of Earning Capacity Review Policy provides that the WCB will establish an overpayment when the worker receives actual post-accident earnings that are more than 5% greater than the worker's estimated earning capacity. The 2016 overpayment in this case falls into this category. Accordingly, the panel finds that the 2016 overpayment must be repaid.

2017 Overpayment

The evidence discloses that the worker started the 2017 year in a position that would have entitled her to ongoing partial wage loss benefits but on January 30, 2017, she transferred to a term positon that paid her more than her pre-accident earnings. In that new position, the worker would not be entitled to wage loss benefits as there was no loss of earnings capacity at that time. However, the evidence discloses that the WCB continued to pay the worker wage loss benefits totaling $703.44, before stopping the payments.

The panel finds that it was obvious to the worker that she was being overpaid. Although she took action to avoid being overpaid by asking that no further benefits be paid after Christmas 2016, the panel notes that she received and had the benefit of the funds to which she was not entitled.

The panel finds that the 2017 overpayment should be repaid.

The worker's appeal is denied.

Panel Members

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

Recording Secretary, J. Lee

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

Signed at Winnipeg this 14th day of February, 2018