Document name

Overpayment Recovery – Compensation

Document number

PRO 17/2016

Demand letter means a letter sent to the debtor advising them of the overpayment. The letter may include, but is not limited to:

• The overpayment amount.
• The cause of the overpayment.
• A repayment request.
• A request to contact the WCB to discuss repayment options.
• A deadline to respond to the repayment request (usually 10 days from the date of the letter).

POL 17/2016, Overpayment Recovery – Compensation establishes guidelines for recovering overpayments.

Overpayment Registration

1. WCB staff will identify that an overpayment has or may have occurred.
2. If an overpayment has occurred, Operations will:
   1. Find the cause of the overpayment.
   2. Calculate the overpayment.
   3. Record the overpayment on the claim file, which will establish the date of discovery of the overpayment;, and
   4. Determine if the overpayment is recoverable.
3. If an overpayment is generated by a Board Appeal Tribunal decision or a breach of the Act, Service Excellence staff will review Operations’ calculation.

Overpayments Subject to Recovery

4. Overpayments subject to recovery include, but are not limited to, the following circumstances:
   1. An advance of benefits in excess of actual entitlement.
   2. Earnings loss benefits paid beyond the date of return to work.
   3. Duplication of benefits from another source for the same injury (e.g., CPP disability benefits).
   4. Retroactive suspension of benefits.
   5. Clerical, documentation or calculation errors.
   6. Incomplete or incorrect wage or exemption information, or
   7. Actual, verified earnings exceed estimated earnings.
5. Staff may pursue overpayment recovery from a worker’s estate beyond the date of death:
   1. When an overpayment results from WCB paying benefits beyond the date of death; or
   2. When an outstanding overpayment exists at the time of the worker’s death.

However, staff will not reduce funeral costs, if payable, to recover overpayments.

Overpayments Not Subject to Recovery

6. WCB will not normally recover overpayments that result from the following:
   1. WCB changes a decision based on new information that the debtor could not have known is required at the time the original decision is made (e.g., medical investigation results in a diagnostic change), or
   2. WCB reverses a decision that is originally based on best judgment or benefit of doubt (POL 23/2014, Reversing Decisions).
7. Legal recovery efforts must start within the time limits set in the limitations of actions legislation in force detailed below. However, the overpayment will remain a debt due to the WCB. The WCB will set off the debt against any future entitlement which may be payable to the worker.
8. Operations staff will document reasons when overpayment recovery is not pursued.
9. If staff determine that the overpayment will not be recovered, overpayments will be written off (see section below, Authority Level for Writing-Off Overpayment).

Limitation Periods for Overpayment Recovery

10. Civil recovery efforts will follow the time limits set in the limitations of actions legislation in force. The limitation period begins when the:
    1. Overpayment occurs, or
    2. As soon as WCB staff could reasonably have discovered the overpayment.
11. The WCB has two years from the date of discovery to:
    1. Recover the overpayment, or
    2. Register a Board Order as a judgment of the Court.

This period can be extended for an additional two years from the date the debtor acknowledges the debt (in writing) or from the date the debtor makes a voluntary payment.

12. Once the WCB registers the Board Order, all civil recovery actions to recover the overpayment must be completed within 10 years from the date of registration. The WCB can request extension of the Board Order for additional 10-year periods. If the WCB does not renew the Board Order, all civil recovery actions to recover the overpayment will stop.

Set-Off

13. Overpayments set-off against present and future benefits are not subject to any limitation period.

Recovery Methods

14. WCB staff will recover overpayments with every cost effective, legal means available, taking into account the financial circumstances of the debtor. WCB staff will make every attempt to reach agreement with the debtor as to the methods and rates of repayment, but such agreement is not necessary to proceed with collection efforts.
15. If, at the time of the discovery of the overpayment, payments are still being made on a claim, the amount of any overpayment will be recovered as follows:
    1. WCB staff may start recovering the overpayment as soon as the first pay period after the initial verbal notice.
    2. Recovery will not exceed more than 25 per cent of earnings loss benefits. However, staff will apply up to 100 per cent of earnings loss benefits to the overpayment if a breach of the Act such as suspected or alleged fraud, deliberate misrepresentation or withholding of information affecting entitlement was involved.
    3. Each case will be reviewed individually to determine whether it would be appropriate to recover the overpayment from benefits and allowances other than earnings loss benefits (e.g., permanent functional impairment awards, independence allowance, etc.). Recovery from other entitlement will be with the approval or at the request of the worker.
    4. Determining the amount to deduct from ongoing entitlement will be dependent on factors such as:
       1. The amount of the overpayment.
       2. The expected duration of ongoing wage loss payments.
       3. The debtor’s personal financial circumstances, and
       4. The debtor’s commitment to repaying the overpayment.
    5. WCB staff will not collect earnings loss overpayments from travel and sustenance allowances or medication reimbursements. However, WCB staff will collect expense (e.g., travel, etc), allowance (e.g., personal care, etc.) or medication overpayments from future payments of the same type or from earnings loss benefits.
    6. Recovery through ongoing entitlement must be completed within two years from the date of discovery (Limitations Periods section above).
16. The debtor can also provide reimbursement by direct payment:
    1. Made in full or by instalments.
    2. Accepted at any time before the full amount of the overpayment is repaid by other means, or
    3. Made by normally-accepted WCB payment methods.
17. Where overpayment recovery efforts are unsuccessful, WCB staff may set off overpayment debts against compensation that may be or that may become payable to the debtor.
18. WCB may recover overpayments from the debtor’s annuity entitlement:
    1. When the annuity is payable (when the worker reaches age 65 or at the time of death if the worker dies prior to age 65).
    2. If the Board Members order recovery from the annuity before it is payable. Staff will provide the debtor written notice of the potential financial implications.
    3. If overpaid earnings loss benefits cause annuity benefits to accrue. Operations will reduce the annuity by the amount of annuity benefits paid in respect of the overpayment along with accrued interest on that amount.
19. If the employer is continuing to pay the worker’s salary, arrangements may be made between WCB and the employer, where possible, so that the employer suspends salary continuance while WCB staff pursue overpayment recovery. WCB will pay earnings loss directly to the worker and will reduce the payments to recover the overpayment.
20. The debtor’s benefit/expense statement will show the:
    1. 1. Recovered amount, and
       2. Balance owing.

Initial Notification and Collection

21. Operations will inform the debtor (in person or through a discussion by phone) the reasons for, and the amount of, the overpayment. Notification will be within 30 days of when the overpayment was discovered.
22. If WCB overpays earning loss benefits because of clerical error or calculation error and entitlement is ongoing, Operations staff will reduce the rate to the correct level when they inform the debtor of the error and the overpayment.
23. Within a week of the overpayment calculation, WCB staff will send the debtor and employer a letter that:
    1. Confirms the cause of the overpayment.
    2. Includes a summary of the overpayment calculation, and
    3. Includes information regarding appeal options.
24. Operations will try to reach an agreement with the debtor regarding the method and rate of repayment. However, staff will proceed with recovery if unable to reach an agreement.
25. Collection through ongoing entitlement:
    1. If the debtor has ongoing entitlement, the overpayment will be recovered from benefits and allowances in accordance with the Recovery Methods section above.
    2. Operations will note the repayment methods on the claim file.
    3. Operations staff will request the debtor to acknowledge the amount of the overpayment in writing through a recovery agreement. The debtor will sign this agreement annually.
    4. Operations will send the debtor a letter confirming collection methods.
26. Collection through a recovery agreement:
    1. If there is no ongoing entitlement, a recovery agreement may be made when the debtor acknowledges the debt (in writing) or the debtor makes a voluntary payment.
    2. These agreements will note the amount of the overpayment and will be signed by the debtor annually until the amount is recovered.
    3. Operations will note these agreements on the claim file and will send the debtor a letter confirming the collection methods.
    4. If the debtor defaults on the recovery agreement, Operations will refer the file immediately to Administrative Services Collections Department.
    5. If possible, Operations may set off this debt against compensation that may be or that may become payable to the debtor, including their annuity entitlement.
27. No ongoing entitlement nor a recovery agreement:
    1. If there is no ongoing entitlement and no repayment agreement made with the debtor, Operations will note on the claim file the efforts made to reach agreement.
    2. For overpayments under $100, if there is no recovery agreement within three months from the date the initial notification letter is sent (as per point 23 above), Operations will stop recovery efforts. However, the overpayment will remain a debt due to the WCB. Operations will resume active recovery efforts if the debtor becomes entitled to benefits in the future or may set off the debt against the debtor’s future annuity entitlement.
    3. For overpayments over $100, if there is no recovery agreement within one month from the date the initial notification letter is sent (as per point 23 above), Operations will refer the file to the Administrative Services Collections Department (via a Claim Overpayment Referral Form).

Recovery of Overpayment By Collections Department

28. If the file is referred to the Collections Department, a Collections Specialist (“Specialist”) will review the Claim Overpayment Referral form and will review the claim file for any additional information required.
29. The Specialist will send the debtor a demand letter. If the debtor does not respond to the demand letter, the Specialist will phone the debtor.
30. The Specialist will try to reach an agreement with the debtor regarding the method and rate of repayment as noted in the Recovery Methods section above. The Specialist will note all agreements made with the debtor concerning repayment on the claim file.
31. Recovery activities should be completed within two months, but this period may be extended if a repayment plan is arranged.
32. If no agreement is possible, the Specialist may pursue the recovery of overpayments by every cost effective, legal means available. The Specialist will note on the claim file the:
    1. Efforts made to reach agreement.
    2. Repayment methods and or schedules to be imposed on the debtor.
33. Outstanding overpayments of less than $1,000:
    1. If the Specialist cannot recover the overpayment within two months of the collections demand letter (and no extension is agreed to), the Specialist may end active recovery efforts.
    2. If the Specialist stops recovery efforts, the overpayment will remain a debt due to the WCB. Staff will resume recovery efforts if the debtor becomes entitled to benefits in the future.
34. Outstanding overpayments exceeding $1,000:
    1. If the Specialist cannot recover the overpayment within two months of the collections demand letter (and no extension is agreed to), the Specialist will refer the file to Legal Services, including the following information:
       1. About all collection activities made to date.
       2. The debtor’s address and phone number, and
       3. The name of the debtor’s employer.
    2. The Specialist will note the referral on the claim file.

Recovery of Overpayment By Legal Services

35. Legal Services will send the final demand letter for repayment.
36. Legal Services will try to recover overpayments with every cost effective, legal means available. Legal Services will try to avoid creating an undue financial hardship for the debtor, except where a breach of the Act may have been involved.
37. Legal Services may refer the overpayment to external legal representatives. External legal representatives are subject to the same obligations as Legal Services.
38. If the overpayment is not settled within the final demand period, Legal Services will seek a Board Order for judgment on the overpayment and register this judgment with the Court.
39. When Legal Services has determined that a Board Order is necessary to either pursue civil collection options and or stop a limitation period from expiring, Legal Services will request Operations to provide an outline of the current amount outstanding, the discovery date of the overpayment, and collection efforts, as well as the claim file references. This information is required before the Chairperson signs the Board Order.
40. If legal action is not able to recover an overpayment, Legal Services will end active recovery efforts.
    1. If the WCB stops recovery efforts, the overpayment will remain a debt due to the WCB and remains recoverable by set-off. The WCB will resume collection efforts if the debtor becomes entitled to benefits in the future.

Overpayment Appeals

41. If a worker expresses an intention to appeal an overpayment decision, Operations staff or the Collections Specialist will continue with efforts to recover the overpayment until the appeal is registered with either the Appeals Department or the Board Appeal Tribunal.
42. If the worker expresses an intention to appeal and there is less than six months before the expiration of the two year limitation, Operations staff or the Collections Specialist must arrange, through Legal Services, to have a Board Order issued.
43. If an appeal is registered, Operations staff and the Collections Specialist will suspend efforts to recover, pending the outcome of the appeal. In addition, staff must determine if a Board Order should be issued before the appeal is completed in order to ensure that the two year limitation period does not elapse before the appeal decision is given.
44. If an appeal for an overpayment decision is registered after a Board Order has been issued, the debtor must either:
    1. Request the Board Appeals Tribunal to reconsider its decision, or
    2. Pursue a judicial review of the Board Order.

Employer Cost Experience

45. Claim costs incurred from an overpayment will be removed from the employer’s claims experience when the overpayment is discovered and recorded on the claim file (POL 27/2016, Experience Rating Program – Discounts or Surcharges).

Overpayments Caused by Breach of the Act

46. If the debtor knowingly withheld information or gave wrong information to collect more than their proper entitlement:
    1. WCB will recover legal costs spent to recover the overpayment, and
    2. The overpayment will be referred to Internal Audit for further review.
       1. The referral will include an explanation as to why WCB staff suspect the debtor has purposely mislead the WCB.

Annual Communications

47. WCB will send all customers annual letters that explain that if they have an overpayment, it will be recovered from future entitlement or from their annuity at age 65, or before then if ordered by the Board Members.