CFR > Title 20 - Employees' Benefits > CHAPTER I—OFFICE OF WORKERS' COMPENSATION PROGRAMS, DEPARTMENT OF LABOR > SUBCHAPTER B—FEDERAL EMPLOYEES' COMPENSATION ACT (parts 10 to 25) > PART 10—CLAIMS FOR COMPENSATION UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT, AS AMENDED > SUBPART E—Compensation and Related Benefits (§10.400 to §10.441) > 10.422—May compensation payments be issued in a lump sum?

10.422—May compensation payments be issued in a lump sum?

(a) In exercise of the discretion afforded under 5 U.S.C. 8135(a), OWCP has determined that lump-sum payments will not be made to persons entitled to wage-loss benefits (that is, those payable under 5 U.S.C. 8105 and 8106 ). Therefore, when OWCP receives requests for lump-sum payments for wage-loss benefits, OWCP will not exercise further discretion in the matter. This determination is based on several factors, including:
(1) The purpose of the FECA, which is to replace lost wages;
(2) The prudence of providing wage-loss benefits on a regular, recurring basis; and
(3) The high cost of the long-term borrowing that is needed to pay out large lump sums.
(b) However, a lump-sum payment may be made to an employee entitled to a schedule award under 5 U.S.C. 8107 where OWCP determines that such a payment is in the employee's best interest. Lump-sum payments of schedule awards generally will be considered in the employee's best interest only where the employee does not rely upon compensation payments as a substitute for lost wages (that is, the employee is working or is receiving annuity payments). An employee possesses no absolute right to a lump-sum payment of benefits payable under 5 U.S.C. 8107.
(c) Lump-sum payments to surviving spouses are addressed in 5 U.S.C. 8135(b).