Recent Budget Proposal Omitted Cut to Federal Workers’ Compensation Benefits

By on March 10, 2016 in Pay & Benefits, Retirement with 36 Comments

Image of an injured hand in a cast next to a work injury claim form on a desk

Recently, President Obama released his Fiscal Year 2017 federal budget proposal to the public. It calls for a 1.6 percent pay increase for federal employees, a $10 a barrel tax on crude oil, and the hefty sum allocated for cybersecurity measures.

These points were undoubtedly newsworthy, but something that didn’t make the budget proposal affects federal workers, and deserves equal attention.

Every budget proposed throughout the Obama Administration’s tenure has included a motion by the Department of Labor (DOL) to significantly reduce workers’ compensation benefits under the Federal Employee Compensation Act (FECA) for federal civilian workers who have been injured or killed on the job. The motion suggests:

  1. A reduction in the wage-loss compensation for disabled federal workers with dependents (currently its 75%, the reduction would take it down to 70%) and
  2. To cut all wage loss compensation down to 50 percent when the federal employee reaches retirement age. Supposedly, the notion was to ensure FECA recipients were not overly advantaged in their retirement years compared to non-injured federal retirees.  However, that fuzzy thinking has been contradicted by a Government Accountability Office (GAO) analysis, which found that under current law (without the proposed cut) FECA recipient benefits are “on par or 10 percent less than the median FERS retirement benefit package.”

The purpose of the FECA benefit is to support those who, as a result of a work-related injury or illness, can no longer perform their job duties. The benefit is meant to extend throughout both working and retirement years. At first glance, it may seem plausible to limit the benefit once a federal worker reaches retirement age – but this does not account for the income and retirement savings the federal employee has lost as a result of their work-related injury. For example,

  1. These individuals are unable to secure pay raises or promotions like their federal coworkers,
  2. They have a limited saving ability since they cannot contribute and receive matching contributions to their Thrift Savings Plan (TSP), and
  3. They also can have a reduced Social Security benefit because employees covered by Social Security are unable to earn quarterly credits to increase average monthly earnings used to calculate those Social Security benefit payments while receiving FECA benefits.

Though I understand the goal of reducing expenses, injured federal workers should not be the ones to bear the brunt of such legislation. Remember, these individuals are our postal workers, firefighters, federal law enforcement officials and others who have suffered from debilitating injuries and illnesses while working in public service. We need to be able to draw the most talent we can to these jobs, and a fair workers’ compensation benefit system is vital to both the recruitment and retention of talented individuals.

Navigating the federal workers’ compensation system is already a formidable endeavor, and few withstand the process unless they obviously qualify for the benefit. For this reason, those, like myself, who advocate on behalf of injured federal workers, were happy to see President Obama’s final budget proposal did not call to limit the benefits as recommended by the Department of Labor.

© 2016 Bo Harris. All rights reserved. This article may not be reproduced without express written consent from Bo Harris.


About the Author

As a Chartered Federal Employee Benefit Consultant (ChFEBC), Bo Harris is passionate about helping federal employees obtain proper benefits. He joined Harris Federal Law Firm in 2002 and is now the firm’s Director of Operations. Harris Federal assists federal workers all over the country on employment matters, filing for OWCP workers’ compensation and FERS federal disability retirement benefits. Bo regularly leads training seminars for federal agencies and unions. To learn more, contact Bo at (877) 226-2723 or via email.