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Code of Federal Regulations Pertaining to ESA |
| Employees' Benefits |
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| Office of Workers' Compensation Programs, Department of Labor |
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| Claims for Compensation Under the Federal Employees' Compensation Act, As Amended |
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| Special Provisions |
20 CFR 10.711 - How much of any settlement or judgment must be paid to the United States?
- Section Number: 10.711
- Section Name: How much of any settlement or judgment must be paid to the United States?
The statute permits a FECA beneficiary to retain, as a minimum, one-
fifth of the net amount of money or property remaining after a
reasonable attorney's fee and the costs of litigation have been deducted
from the third-party recovery. The United States shares in the
litigation expense by allowing the beneficiary to retain, at the time of
distribution, an amount equivalent to a reasonable attorney's fee
proportionate to the refund due the United States. After the refund owed
to the United States is calculated, the FECA beneficiary retains any
surplus remaining, and this amount is credited, dollar for dollar,
against future compensation for the same injury, as defined in
Sec. 10.719. OWCP will resume the payment of compensation only after the
FECA beneficiary has been awarded compensation which exceeds the amount
of the surplus.
(a) The refund to the United States is calculated as follows, using
the Statement of Recovery form approved by OWCP:
(1) Determine the gross recovery as set forth in Sec. 10.712;
(2) Subtract the amount of attorney's fees actually paid, but not
more than the maximum amount of attorney's fees considered by OWCP or
SOL to be reasonable, from the gross recovery (Subtotal A);
(3) Subtract the costs of litigation, as allowed by OWCP or SOL
(Subtotal B);
(4) Subtract one fifth of Subtotal B from Subtotal B (Subtotal C);
(5) Compare Subtotal C and the refundable disbursements as defined
in Sec. 10.714. Subtotal D is the lower of the two amounts.
(6) Multiply Subtotal D by a percentage that is determined by
dividing the gross recovery into the amount of attorney's fees actually
paid, but not more than the maximum amount of attorney's fees considered
by OWCP or SOL to be reasonable, to determine the Government's allowance
for attorney's fees, and subtract this amount from Subtotal D.
(b) The credit against future benefits (also referred to as the
surplus) is calculated as follows:
(1) If Subtotal C, as calculated according to paragraph (a)(4) of
this section, is less than the refundable disbursements, as defined in
Sec. 10.714, there is no credit to be applied against future benefits;
(2) If Subtotal C is greater than the refundable disbursements, the
credit against future benefits (or surplus) amount is determined by
subtracting the refundable disbursements from Subtotal C.
(c) An example of how these calculations are made follows. In this
example, a Federal employee sues another party for causing injuries for
which the employee has received $22,000 in benefits under the FECA,
subject to refund. The suit is settled and the injured employee receives
$100,000, all of which was for his injury. The injured worker paid
attorney's fees of $25,000 and costs for the litigation of $3,000.
(1) Gross recovery........................................... $100,000
Attorney's fees.......................................... -25,000
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(2) Subtotal A............................................... 75,000
(3) Costs of suit............................................ -3,000
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Subtotal B................................................. 72,000
One-fifth of Subtotal B.................................... -14,400
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(4) Subtotal C............................................... 57,600
Refundable Disbursements................................... 22,000
(5) Subtotal D (lower of Subtotal C or refundable 22,000
disbursements)..............................................
(6) Government's allowance for attorney's fees [25,000 / -5,500
100,000) x 22,000] (attorney's fees divided by gross
recovery then multiplied by Subtotal D).....................
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Refund to the United States................................ 16,500
(7) Credit against future benefits [57,600 - 22,000] 35,600
(Subtotal C minus refundable disbursements).................
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