Senator Susan Collins, Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, this week introduced a bill to stop what the Republican from Maine says are "the costly and escalating abuses of the federal workers' compensation system."
The Federal Employment Compensation Act [FECA], launched in 1916, is supposed to cover lost wages for federal employees who suffer on-the-job injuries.
The program ensures federal employees who are injured continue to receive income while they are on the mend. It currently shells out monthly benefits to about 49,000 federal employees, the Senator says, at a cost from July 1, 2009 to June 30, 2010 of $2.78 billion, the Senator says in a statement. Nearly half - or $1.1 billion - went to U.S. Postal Service employees, the Senator adds.
But the program is ripe for abuse. And that's largely because it's more lucrative than the federal retirement program. Many federal workers stay on the program for decades, well into their retirement. Those federal workers on disability can get nearly 75% of their salary tax-free for the rest of their life if they have one dependent, with annual cost of living adjustments, as I've already reported.
That compares to regular federal retirees with 30 years of service who get much less, 56% of their gross wages, which is taxable. And no COLA adjustments, either.
“FECA has no limits on the amount of time spent in the program or the amount of money given to recipients,” the Senator has already said in a statement. “FECA has no caps or cut-off periods, which is why there are reported cases of recipients in their 90s and 100s still receiving workers' compensation benefits.“
Moreover, as I've previously reported, the program does not require regular third-party certifications of continued need for payments, which “expose the FECA program to possible fraud,” the Senator said in a letter to the Government Accountability Office, in which she asked for a GAO audit of the program.
The number of purported federal workers on "disability" is sizable.
"At the U.S. Postal Service, for example, more than 2,000 employees currently receiving federal workers' compensation benefits are 70 years or older," said Senator Collins in a statement, adding: "Nearly 1,000 employees are 80 years or older. Incredibly, 132 of these individuals are 90 and older and there are three who are 98. This abuse may extend across the government. If recipients are gaming this crucial benefit at taxpayers' expense, they must be exposed and the underlying program must be reformed."
The Senator's bill is a simple and cost saving fix. It would cut workforce-related costs government-wide by converting retirement eligible postal and federal employees on workers' compensation into retirement plans when they reach retirement age. Makes sense, right?
Elizabeth MacDonald joined FOX Business Network (FBN) as stocks editor in September 2007 and is the author of Skirting Heresy: The Life and Times of Margery Kempe (Franciscan Media, June 2014).
Follow Elizabeth MacDonald on Twitter @LizMacDonaldFOX.