Workers' Compensation

Senator Collins Shines Light On Federal Workers Comp Waste

Senator Collins suspects some recipients gaming the system, seeks reforms to bring overly generous federal system in line with states

WASHINGTON, D.C. - U.S. Senator Susan Collins, Ranking Member of the Homeland Security and Governmental Affairs Committee, has called for a thorough review of the program that provides federal employees with protection against loss of income from work-related injuries.

The Federal Employee Compensation Act (FECA) pays benefits to roughly 49,000 federal employees to ensure that injured employees receive income while they recuperate pending their return to work.  Senator Collins asked the Government Accountability Office to audit FECA and report on the length of time individuals remain on the program, the number of recipients who exceeded the standard federal retirement age, and how the federal program compares to state workers' compensation best practices.  Senator Collins also asked GAO to compare records against the Death Master File and the civilian payroll database to search for deceased individuals receiving benefits or recipients "double dipping."

"I am increasingly concerned that individuals with no intention of returning to work continue to receive these benefits," said Senator Collins.  "At the U.S. Postal Service, for example, 1,000 employees currently receiving federal workers' compensation benefits are 80 years or older.  Incredibly, 132 of these individuals are 90 and older and there are three who are 98.  This abuse may extend across the government where the Department of Labor regularly pays benefits to employees in their 70s, 80s, 90s, and even 100s.  The lack of benefit caps and requirements for regular third-party certifications of continued need further expose the FECA program to possible fraud.  If recipients are gaming this crucial benefit at taxpayers' expense, they must be exposed and the underlying program must be reformed."

FECA is more generous than federal retirement since on average employees on FECA receive nearly three quarters of their gross pay, tax-free.  Under FECA, there also is an annual cost-of-living adjustment.   By comparison, a federal employee with 30 years of service would retire under CSRS with an average of just over 56 percent of his or her gross pay, which is taxed.  Under this scenario, a retired federal employee would receive 27 percent less annually than a comparable federal employee on FECA.   FECA has no limits on the amount of time spent in the program or the amount of money given to recipients.  FECA has no caps or cut-off periods, which is why there are reported cases of recipients in their 90s and 100s still receiving workers' compensation benefits.

Source: Office of Senator Susan Collins (ME)