GAO: Proposed FECA changes lower injured workers’ take-home compensation

November 28, 2012

Washington – Proposed changes to the Federal Employees’ Compensation Act program would reduce the median wage replacement rate that injured workers receive, according to a new Government Accountability Office report (.pdf file).

Under the current FECA program, the benefits for federal employees injured on the job is based on their wages at the time of injury and whether they have any eligible dependents. Beneficiaries unable to return to work and who have a dependent receive 75 percent of gross wages; those without a dependent receive slightly more than 66 percent.

In a Department of Labor proposal approved by the Senate as part of a reform bill, total disability benefits for federal workers would be set at 70 percent, regardless of whether a beneficiary has a dependent. Based on a simulation of the new proposal, GAO found the median take-home pay replaced by FECA for federal workers with total disability fell to 77 percent from 80 percent.