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Senator calls for review of federal employee workers' comp

January 18, 2011

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Washington – The system that provides benefits for injured federal employees should be reviewed by the Government Accountability Office, according to Sen. Susan Collins (R-ME).

Some 49,000 federal workers receive benefits under the Federal Employees' Compensation Act while they recuperate from work-related injuries before returning to the job. Collins is concerned the program could be exposed to fraud and may be awarding benefits to employees who have no intention of returning to work.

Under FECA, employees receive, on average, nearly 75 percent of their gross pay, which is tax-free and includes annual cost-of-living adjustments, according to Collins. By comparison, she said, an employee after 30 years of work who retires under the Civil Service Retirement System receives an average 56 percent of his or her pay, which is taxed.

As a result, a federal employee would receive more pay by maintaining employment and receiving compensation under FECA than he or she would upon retiring. As evidence of this possible fraud, Collins cited figures concerning employees at the U.S. Postal Service, where about 1,000 workers at least 80 years old currently are receiving FECA benefits.

"If recipients are gaming this crucial benefit at taxpayers' expense, they must be exposed and the underlying program must be reformed," Collins said.

The senator asked GAO to audit the program and report how long employees remain in the program, how many employees may be receiving benefits but who are past the federal retirement age, and how the program compares with state workers' compensation best practices. Additionally, GAO was asked to compare FECA records with both the Social Security Administration's Death Master File and civilian payroll databases to ensure no "double-dipping" is taking place.

Collins is the ranking member of the Senate Homeland Security and Governmental Affairs Committee, which has jurisdiction over matters related to federal employees, including compensation and benefits.

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