The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker is appealing the decision made by the Workers Compensation Board ("WCB") that the overpayment of wage loss benefits has been correctly calculated. A file review was held on February 21, 2019 to consider the worker's appeal.

Issue

Whether or not the overpayment of wage loss benefits has been correctly calculated.

Decision

That the overpayment of wage loss benefits has not been correctly calculated.

Background

This claim has been the subject of three previous appeals. Please see Appeal Commission Decision Nos. 92/12, 07/15 and 139/15, dated August 22, 2012, January 23, 2015 and December 9, 2015, respectively. The background will therefore not be repeated in its entirety.

On April 26, 2010, the worker suffered injuries to his right index and middle fingers from a workplace accident. His claim for compensation was accepted and various types of benefits have been paid. In March 2012, the worker's file was referred to the WCB's vocational rehabilitation branch, and an occupational goal was later developed for the worker under National Occupational Classification ("NOC") 7412, Bus Driver.

Effective October 4, 2012, a deemed post-accident earning capacity based on NOC 7412 was implemented. The worker's wage loss benefits were reduced based on his established earning capacity of $505.16 per week and he was placed in long term wage loss payments.

The worker's long term wage loss benefits were reviewed annually, and his earning capacity adjusted accordingly, to reflect either his indexed annual percentage increase or his actual earnings.

In conducting its review to establish the worker's indexed annual rate effective May 1, 2018, Compensation Services requested copies of the worker's income tax information for the years 2016 and 2017. On June 19, 2018, Compensation Services determined that the worker's actual earnings in 2016 were less than his deemed earning capacity, such that no further review was required. Compensation Services further determined, however, that the worker's actual 2017 earnings, which were established at $711.87 per week, were greater than his deemed earning capacity and the worker had been overpaid in the amount of $5,118.56.

On July 3, 2018, Compensation Services advised the worker that in reviewing his 2017 income tax information, an overpayment had been discovered, as he had earned more than he reported to the WCB. The worker was advised that he was responsible for repaying the full amount of that overpayment, totaling $5,118.56.

On July 6, 2018, the worker requested that Review Office reconsider Compensation Services' decision. The worker agreed that he had been overpaid for 2017, but felt that the amount of the overpayment should be lower. He also felt that Compensations Services' calculations were incorrect, and that payments he made to his pension plan and various deductions for personal benefits should not have been included in the calculation of his earnings.

On August 14, 2018, Review Office determined that the overpayment of wage loss benefits had been calculated correctly. Review Office stated that the steps taken by Compensation Services to review and adjust the worker's annual earning capacity had been completed correctly and within the scope and intent of the WCB's policies, and established the worker had an overpayment of wage loss benefits for 2017.

Review Office noted that the worker had been in receipt of long term wage loss benefits for several years, with his established earning capacity and associated wage loss benefits being adjusted annually. Review Office found that after that length of time, the worker would be aware of the level of earnings he could make before he exceeded his potential maximum and that he needed to report these earnings to the WCB. Review Office concluded that the established overpayment of benefits was correct and the worker should have been aware his wages were exceeding the entitled levels. As such, he was required to repay the overpayment of benefits.

On October 6, 2018, the worker filed an appeal with the Appeal Commission and a file review was arranged.

Following the file review, the appeal panel requested additional information prior to discussing the case further. The requested information was subsequently received and was forwarded to the worker for comment. On April 18, 2019, the appeal panel met further to discuss the case and render its final decision on the issue under appeal.

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.

WCB Policy 44.80.80.20, Loss of Earning Capacity Reviews, (the "Earning Review Policy") applies to workers whose earning capacity may change during the period the worker is on benefits. The Earning Review 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, and describes how, and under what circumstances, the loss of earning capacity will be reviewed and adjusted.

The Earning Review Policy 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.

WCB Policy 35.40.50, Overpayment of Benefits (the "Overpayments Policy") deals with the recovery of overpayments when an injured worker has been paid more than they were entitled to under the Act. The Overpayments Policy establishes the framework for preventing, recovering and writing off overpayments.

Worker's Position

The worker was self-represented. The worker provided a number of written submissions in support of his appeal.

In his appeal form and attached submission dated October 6, 2018, the worker noted that he was not receiving a pension but was contributing to a pension plan for his future retirement. The worker submitted that these pension contributions were not like CPP and EI, and the WCB "had no right to deduct my pension contributions from income." The worker further noted that the WCB had claimed they paid him $26,913.48 in 2017 but they only paid him $26,169.66, a difference of $743.60.

In a subsequent submission dated December 30, 2018, the worker acknowledged that he had been overpaid, and provided a series of calculations setting out what he believed the correct amount of the overpayment to be. He also noted, however, that he had expenses on his income which should be taken into consideration, and submitted that based on his taxable income as shown on the income tax return, the WCB owed him a lot more than the amount of the overpayment.

In another submission dated January 26, 2019, the worker noted that the WCB had forced him to work as a bus driver. The worker submitted that the wages were low, and he was not working full-time hours. The worker submitted that in 2013 to 2015, he made less money that the WCB "wanted me to make" yet the WCB did not pay him the difference as required by WCB policy. The worker submitted that if the WCB had the right to recover the 2017 overpayment because he made more money from the job they chose for him, then they had to pay him for the same job when he was making less money.

Employer's Position

The employer did not participate in the appeal.

Analysis

The issue before the panel is whether or not the overpayment of wage loss benefits has been correctly calculated. For the worker's appeal to be successful, the panel must find that the overpayment of wage loss benefits was not calculated in accordance with the Act and Earning Review Policy. The panel is able to make that finding, as indicated below.

Based on our review of all of the information which is before us, on file and as subsequently provided at the panel's request, the panel is satisfied that an error was made in the calculation of the overpayment, as detailed below. The panel is further satisfied that, with that one exception, the overpayment of wage loss benefits was correctly calculated, in accordance with the Act and the Earning Review Policy.

The panel notes that the worker has acknowledged he was overpaid wage loss benefits in 2017, but disputes the amount of the overpayment. The worker provided a series of calculations in his December 30, 2018 submission leading to what he suggested was the correct amount of overpayment. The panel carefully reviewed those calculations, as well as other calculations which the worker provided and are on file, but is unable to agree with them.

The worker submitted that he had other expenses, as indicated on his tax return, including pension plan contributions and union, professional or like dues, and the calculations should be based on his taxable income as indicated on his tax return. The panel does not agree. The panel finds that the Earning Review Policy identifies specific criteria which are to be applied in determining earning capacity and that the personal expenses listed by the worker do not fall within those criteria and are therefore not to be taken into consideration.

The worker further argued in his submissions that he had been underpaid in previous years, notably in 2012 through 2015 and in 2016, and that the WCB owed him wages in respect of those years. To the extent that the worker appears to suggest that these wages should be offset against his overpayment, it is the panel's understanding that earnings and any overpayments are treated discretely or on their own in each year. The panel is satisfied that the Overpayments Policy does not allow for such an offset. The panel further understands that the issue of any particular underpayment to the worker in previous years has not been adjudicated by the WCB, and would have to be referred to them by the worker for a determination.

With respect to the worker's further argument that he had been forced into a position in NOC 7412, that his wages had been low and he had not been able to work full-time in previous years, and his apparent suggestion that this position was inappropriate, the panel notes that this issue was decided by a previous panel of the Appeal Commission, who determined that a deemed post-earning capacity in NOC 7412 was appropriate and was to be implemented effective October 4, 2012. That determination is binding on this appeal panel.

Based on our review of the information before us, the panel is therefore satisfied that the overpayment was calculated in accordance with the applicable criteria under the Earning Review Policy.

The panel further notes that the worker's 2017 actual earnings are greater than 5% of the estimated earning capacity for a year as set out in section 5 of the Earning Review Policy, which is the threshold where the Policy provides that the WCB will establish an overpayment.

As noted previously, however, in the course of our review, the panel noted an inconsistency in the amounts of wage loss benefits said to have been paid to the worker in 2017. Following the hearing, the panel requested that the WCB provide an explanation for this inconsistency as noted in the worker's 2017 T5007 ($26,169.88) and in Compensation Services' Memorandum to File dated June 19, 2018 ($26,913.48). On April 2, 2019, the WCB payment assessor responded, in part, as follows:

The workers' (sic) T5007 of $26,169.88 does not reflect the workers' (sic) total wage loss paid from January 12, 2017 to December 31, 2017. It reflects the wage loss benefits issued to the worker in the 2017 calendar year.

As such, the workers' (sic) T5007 would reflect the period December 29, 2016 to December 27, 2017 as this was the period issued in the 2017 calendar year.

In further review of the Overpayment Calculation however, an error was identified in the calculation.

As per "Recalculation of Overpayment" memo on file from April 3, 2019, the total benefits paid from January 1, 2017 to December 31, 2017 was initially calculated as $26,913.48. When reviewed further, the amount was actually $26,181.29.

Therefore, the overpayment amount should have been calculated at $4,386.37 for the period instead of $5,118.56.

$5,118.56 - $4,386.37 = $732.19.

The workers' (sic) overpayment will be reduced by $732.19 to reflect this error in the calculation.

The panel accepts the payment assessor's revised calculation of the overpayment, and finds that the overpayment amount should have been $4,386.37, as opposed to $5,118.56 as originally calculated.

Based on the foregoing, and due to the error in calculation referred to above, the panel finds that the overpayment of wage loss benefits was not calculated in accordance with the Earning Review Policy. In all other respects, the overpayment of wage loss benefits has been correctly calculated.

The worker's appeal is therefore successful, in part.

Panel Members

M. L. Harrison, Presiding Officer
A. Finkel, Commissioner
M. Kernaghan, Commissioner

Recording Secretary, J. Lee

M. L. Harrison - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 12th day of June, 2019