Court Rules on Overpayment Recovery Limits in Peoples v. ICAP

The Colorado Court of Appeals issued a significant decision in Peoples v. Industrial Claim Appeals Office in 2019, addressing how the Social Security Administration may recover overpayments in workers’ compensation cases. The case specifically examined whether an employer’s listing of an overpayment on a Final Admission of Liability (FAL) constitutes an "attempt to recover" under Colorado law.

Carold Peoples, a former employee of the Colorado Department of Transportation (CDOT), sustained a work-related injury in 2010 and began receiving Social Security Disability Insurance (SSDI) benefits. After reaching maximum medical improvement (MMI) in 2013, CDOT filed a FAL stating that Peoples had been overpaid by $17,632.79 due to benefits exceeding the statutory cap. The employer did not pursue additional legal action at that time to recover the overpayment.

Years later, in 2017, CDOT filed an amended FAL again listing the overpayment and attempted to deduct it from Peoples’ additional disfigurement benefits. Peoples challenged the recovery, arguing that the statute of limitations had expired, as the employer had not made a valid attempt to recover the overpayment within the one-year deadline set by Colorado law.

Key Legal Issues

1. Definition of an Attempt to Recover – The court had to determine whether merely listing the overpayment on a FAL satisfies the statutory requirement of an "attempt to recover" within one year.
2. Statute of Limitations on Overpayment Recovery – The case questioned whether an employer must take additional action beyond listing an overpayment on a FAL to preserve its right to recovery.
3. Application of the Social Security Administration regulations – The court examined how the statutory cap on TTD and Supplemental Security Income (SSI) benefits interacts with recovery efforts.

The Court’s Ruling

The Colorado Court of Appeals set aside the Industrial Claim Appeals Office’s order allowing the overpayment recovery and ruled in favor of Peoples. The court found that:

• Simply listing an overpayment in a FAL does not qualify as an attempt to recover under Colorado law.
• If an employer wishes to recover an overpayment, it must actively seek repayment within one year through additional legal means, such as requesting a hearing.
• Because CDOT did not take any further steps to recover the funds within the statutory period, it was barred from doing so years later.

How Workers’ Compensation Overpayments Affect Social Security Disability

This ruling not only impacts workers' compensation claims but also highlights how overpayment disputes can carry over into Social Security disability benefits. Individuals receiving both workers' compensation and Social Security disability benefits should be aware that overpayments in one system can affect their eligibility and payments in the other.

Legal Support for Social Security Disability Claims

Navigating Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) claims can be complex, especially when facing overpayment disputes. At Whitcomb, Selinsky, PC, we assist individuals in securing and maintaining their Social Security disability benefits, ensuring they receive the support they deserve. If you need assistance with a Social Security disability claim or overpayment issue, contact us for dedicated legal guidance.