NCPA - National Center for Policy Analysis

Congress Can't Afford to Ignore Civil Service Disability Fraud

July 11, 2013

Soon, the House Education and Workforce Committee will convene a hearing on efforts to reform the Federal Employees Compensation Act (FECA), says the Washington Examiner.

Fraud in FECA has flown under the radar in Congress for far too long.

  • The FECA program costs taxpayers more than $3 billion annually.
  • The Postal Service alone paid out $1.3 billion in FECA compensation last year.
  • The exact amount of fraud isn't clear but the Labor Department's Inspector General has said its "investigations continue to identify high amounts of FECA compensation and medical fraud, which appears to surpass the department's improper payments estimates."

A major problem is that there is virtually no oversight of the program and little incentive for federal agencies to fight such fraud since FECA is run for them by the Department of Labor (DOL). It is not their responsibility, so why police it? That opens the door for federal employees to game the system.

Consider this:

  • DOL approves about 85 percent of all FECA claims.
  • That's more than twice the approval rate for Social Security disability benefits.
  • There is no limit on how long they can receive the payments, either, and many stay on long after they would have retired in the normal course of things.
  • More than 10,000 federal employees presently drawing disability for on-the-job injuries are at least 71 years old.
  • At least six are over 100 years old.
  • FECA payments range from 66 percent to as high as 75 percent of prior wages and are tax-free, with no work required.
  • That's about 26 percent more than they would receive under the normal civil service pension, which is subject to federal taxes.

To reform the system, Congress should first give DOL access to Social Security Administration or National Directory of New Hires databases to identify recipients working unreported side jobs. Second, chop agency budgets whenever fraudulent recipients are uncovered by investigators outside their workplace.

Source: "Congress Can't Afford to Ignore Civil Service Disability Fraud," Washington Examiner, July 9, 2013.


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