A representative payee has a responsibility to

(a) Spend or invest payments received only for the use and benefit of the beneficiary in a manner and for the purposes he or she determines to be in the best interests of the beneficiary, subject to the guidelines contained in §10.163;

(b) Notify the Office of any event that would affect the amount of benefits the beneficiary receives or the right of the beneficiary to receive benefits;

(c) Submit to the Office, upon its request, a written report accounting for the benefits received; and

(d) Notify the Office of any change in the payee's circumstances that would affect performance of the payee's responsibilities.

§ 10.163 Use of benefit payments.

To assure that the general welfare of the beneficiary is properly served, benefit payments received by a representative payee shall be used in the following manner, and in the prescribed order:

(a) Current maintenance, including costs incurred in obtaining food, shelter, clothing, medical care, and personal comfort items.

(b) Institutional care, including the customary charges made by the institution, as well as expenditures for those items which will aid in the beneficiary's recovery or release from the institution or expenses for personal needs which will improve the beneficiary's conditions while in the institution.

(c) Support of the beneficiary's legal dependents after current maintenance

needs or institutional care of the beneficiary are met; and

(d) Claims of creditors only if the current and reasonably foreseeable needs of the beneficiary are met.

§10.164 Conservation and investment of benefit payments.

If payments either in whole or in part are not needed for any of the purposes listed in §10.163 of this part, they shall be conserved or invested on behalf of the beneficiary in non-speculative accounts. Conserved funds should be invested in accordance with rules followed by trustees. Any investment must show clearly that the payee holds the property in trust for the beneficiary. Preferred investments for excess funds are U.S. Savings Bonds and deposits in an interest or dividend paying account in a bank, trust company, credit union, or savings and loan association which is insured under either Federal or State law. The account must be in a form which shows clearly that the representative payee has only a fiduciary and not a personal interest in the funds. The account should provide for withdrawal upon demand without penalty. The interest and dividends, as well as all other profits, which result from an investment are the property of the beneficiary and may not be considered to be the property of the payee.

§ 10.165 Termination of representation.

The services of a representative payee may be terminated when:

(a) The payee has not used the funds in the interests of the beneficiary as stipulated in this subpart;

(b) The payee has not discharged other responsibilities described in this subpart, or has not done so in a timely manner;

(c) The payee dies, wishes to be discharged from responsibility, or is unable to carry out the responsibilities of payee;

(d) The Office, after receipt of competent evidence, determines that the beneficiary is capable of managing his or her own funds; or

(e) A minor beneficiary attains majority.

A representative payee is accountable for the use of benefit payments. The Office may require periodic written reports from the representative payee, and in certain cases, verification of how the funds were used. The representative payee shall keep records of how the funds were used so as to be able to furnish the following information to the Office:

(a) The amount of benefit payments on hand at the beginning of the accounting period;

(b) A description of how the benefit payments were used;

(c) An accounting of the amounts of payments which were saved or invested;

(d) The place(s) of residence of the beneficiary during the accounting period; and

(e) The amount of the beneficiary's income from other sources during the accounting period so as to assist the Office in evaluating the use of the benefit payments.

Subpart C-Continuation of Pay

GENERAL

§ 10.200 Statutory provisions.

(a) Pub. L. 93-416, approved September 7, 1974, significantly revised the Act to provide that specified employees who file a claim for a period of wage loss caused by a traumatic injury shall be entitled, under certain circumstances, to have their regular pay continued for a period not to exceed 45 days.

(b) Continuation of pay shall be considered regular income and not compensation and unlike compensation, shall be subject to all taxes and other payroll deductions applicable to regular income.

[52 FR 10515, Apr. 1, 1987]

PROCEDURES

§10.201 Right to continuation of pay. (a) An employee is not entitled to continuation of pay unless:

(1) The employee is one of the types of employees listed in §10.5(a)(11)(i),

(iii), or (v), except that an individual selected pursuant to chapter 121 of title 28 and serving as a petit or grand juror but who is not otherwise an employee of the United States is not entitled to continuation of pay;

(2) The employee sustains a traumatic job-related injury;

(3) The employee files claim for a period of wage loss, as required by 5 U.S.C. 8118(a), within 30 days of the injury on a form approved by the Secretary. (Form CA-1 may be used for this purpose.); and

(4) The employee's disability begins within 90 days of the date of injury.

(b) An employee entitled to continuation of pay shall have regular pay continued without a break in time for a period not to exceed 45 calendar days of disability, unless the right to continuation of pay is controverted and pay is terminated under §10.203 or is terminated under §10.204. Where the employee stops work due to the disabling effects of the injury, the 45-day period starts with the first day or shift following the date or shift of injury during which the claimant is disabled, provided the disability begins within 90 days of the occurrence of the injury. With regard to the date of injury, the employing agency will keep the employee in a pay status for any fraction of the day or shift of injury for which the employee was disabled with no "charge" to the 45-day period. If the employee stops work for a part of a day or shift other than the day or shift of injury, that day or shift will be considered one calendar day for the purpose of counting 45 days. If a disabled employee returns to work with duties other than the duties performed at the time of injury, continuation of pay is chargeable only when there has been a formal assignment to an established job which is normally paid at a lower salary and would otherwise result in loss of income to the employee. Continuation of pay must be charged against the employee's 45-day entitlement when, due to the effects of the injury upon the employee, (1) A personnel action has been taken to assign or detail the employee to an identified position for which a position description

exists which is classified at a lower salary level than that earned by the employee when injured; or (2) a personnel action has been taken to change the employee to a lower grade, or to a lower rate of basic pay. When, due to the effects of the injury, an employee is changed to a different schedule of work which results in loss of salary or premium pay (e.g., Sunday pay or night differential) authorized for the employee's normal administrative workweek, the employee is entitled to continuation of pay for such wage loss. If the employee's job-related disability continues after entitlement to continuation of pay ceases, the employee shall be entitled to receive compensation subject to the provisions of 5 U.S.C. 8117.

(c) Where an employee's pay is continued under this subpart, it shall not be interrupted as a part of a disciplinary action, nor shall it be terminated as a result of a disciplinary action which terminates employment unless final written notice of termination of employment for cause was issued to the employee prior to the date of injury.

(d) The administration and interpretation of the Act, including section 8118 of the Act, is the function of the Office. While the employing agency shall make certain preliminary decisions with respect to an employee's entitlement to pay continuation under this subpart, final determinations as to such entitlement are a function of the Office.

(e) If the Office finds that the employee is not entitled to continuation of pay after it has been paid, the payments, at the employee's option, shall be charged to annual or sick leave or considered overpayments of pay under 5 U.S.C. 5584.

(f) If the Office determines that pay has been continued at an incorrect rate, the Office shall notify the employing agency and the employee of the correct rate of pay, and the employing agency shall make the necessary adjustment.

[52 FR 10515, Apr. 1, 1987]

§ 10.202 Election of annual or sick leave.

An employee may use accumulated annual or sick leave, or such leave as may be advanced by the employing agency, instead of claiming continuation of pay; however, the time provisions of 5 U.S.C. 8117, governing the date upon which an employee's entitlement to compensation begins, do not begin to run until the use of annual or sick leave ends. The "buy back" provisions specified in §10.310 may not be used to repurchase the leave taken while an employee was otherwise eligible for pay continuation as provided by this subpart. An election to use annual or sick leave is not irrevocable and an employee may subsequently request continuation of pay in lieu of previously requested annual or sick leave; however, such request must be made within one year of the date the leave was used or the date of the Office's approval of the claim, whichever is later. Where an employee is eligible, the employing agency shall, subject to the 45day limitation, convert and restore the leave previously used and, if any of the 45 days of COP remains unused, shall continue pay prospectively. The use of leave may not be used to delay or extend the 45-day continuation of pay period or to otherwise affect the time limitations as provided by section 8117. Therefore, where leave is used during a period when COP is otherwise payable, and the employee does not request that such leave be converted and restored, the 45 days will be counted as though the employee had been in a continuation of pay status.

[52 FR 10516, Apr. 1, 1987]

§ 10.203 Controversion by employing agency.

(a) With respect to continuation of pay under 5 U.S.C. 8118, the employing agency shall, on the basis of information submitted by the employee, or secured on investigation, controvert a claim and terminate an employee's pay only if:

(1) The disability is caused by an occupational disease or illness; or

(2) The employee is the type employee defined by §10.5(a)(11)(ii) or (iv), or is an individual selected pursuant to

chapter 121 of title 28 and serving as a petit or grand juror and who is not otherwise an employee of the United States;

(3) The employee is neither a citizen nor a resident of the United States or Canada; or

(4) The injury occurred off the employing agency's premises and the employee was not performing official duties; or

(5) The injury was caused by the employee's willful misconduct, or the employee's intent to kill or injure himself or herself or another person, or was proximately caused by the employee's intoxication by alcohol or illegal drugs; or

(6) A written claim for wage loss required by 5 U.S.C. 8118(a) was not filed within 30 days after the date of injury;

or

(7) The employee first stopped work as a result of the injury more than 90 days following the injury; or

(8) The employee reports the injury after employment has terminated; or

(9) The employee is enrolled in the Civil Air Patrol, Peace Corps, Job Corps, Youth Conservation Corps, Work Study Programs, or another similar group.

(b) If for reasons other than those listed in paragraph (a) of this section, the agency believes the employee is not entitled to continuation of pay, the agency may controvert an employee's right to continuation of pay; however, the employee's regular pay must be continued and may not be interrupted during the 45-day period unless the controversion is sustained by the Office and the agency is so notified, or unless entitlement ceases under the provisions of § 10.204 of this subpart.

(c) To controvert a claim for continuation of pay, the employing agency shall complete the appropriate section of Form CA-1 and submit detailed information in support of the controversion to the Office.

(d) If the Office determines that the employing agency has incorrectly controverted and terminated the employee's pay, the Office shall notify the agency and the employee's pay shall be continued for a period not to exceed 45 days or as otherwise directed by the Office, and the Office shall notify the

agency to convert periods of sick or annual leave or leave without pay to COP.

[52 FR 10515, Apr. 1, 1987]

§ 10.204 Termination and forfeiture of continuation of pay.

(a) Where pay is continued after an employee stops work due to a disabling traumatic injury, such pay shall be terminated if:

(1) Within 10 work days after the date the employee submits claim for continuation of pay, including such claim for a recurrence of disability, the employing agency has not received prima facie medical evidence that the employee sustained a disabling traumatic injury, except that pay shall be continued without interruption in the absence of such medical evidence if investigation shows to the official superior's satisfaction that the employee sustained a disabling traumatic injury. Where medical evidence is received by the agency more than 10 work days after claim is made for continuation of pay, the agency shall continue the employee's pay retroactive to date of termination provided the medical evidence supports injury-related disability beyond the 10 work-day period, and restore to the employee's account any annual or sick leave the employee may have used during that period. The provisions of this paragraph also apply to periods of recurrent disability as described in § 10.208; or

(2) The employing agency receives evidence that the attending physician has found the employee no longer disabled (i.e., the employee can perform the duties of the position held at the time of injury); or

(3) The employing agency receives evidence that the attending physician has found the employee to be partially disabled and the employee refuses suitable work which has been offered by the agency in accordance with §10.207, or fails to respond to such offer within 5 work days of receipt of the offer; or

(4) The employee's scheduled period of employment expires or employment is otherwise terminated, provided the date of termination of employment is established prior to the date of injury. (See also §10.201(c)); or

(5) The employing agency receives notification from the Office that pay should be terminated; or

(6) The 45-day continuation of pay period expires.

(b) When an employee refuses to submit to or obstructs an examination required by the Office under the provisions of 5 U.S.C. 8123(a), the right to continuation of pay under this subpart may be suspended until the refusal or obstruction stops. Pay otherwise paid or payable under this subpart for the period of the refusal or obstruction may be forfeited and, where already paid, is subject to the provisions of §10.201(e).

(c) If the Office determines that the employing agency has incorrectly terminated the employee's pay or selected an incorrect date of termination, the Office shall instruct the agency to take appropriate corrective action.

[52 FR 10516, Apr. 1, 1987]

§ 10.205 Pay defined for continuation of pay purposes.

(a) For a full or part-time worker, either permanent or temporary, who works the same number of hours each week of the year, or each week of the period of appointment if less than one year, the weekly pay rate shall be the hourly pay rate on the date of injury multiplied by the number of hours worked each week, excluding overtime.

(b) For a part-time worker, either permanent or temporary, who does not work the same number of hours each week but who does work each week of the year, or each week of the period of appointment if less than one year, the weekly pay rate shall be the average weekly earnings established by dividing the total earnings during the one year immediately preceding the date of injury, excluding overtime, by the number of weeks worked during the one year period. For the purposes of this computation, if the employee worked only a part of a workweek, such week is counted as one week.

(c) For all WAE (when actually employed), intermittent and part-time workers, either permanent or temporary, who do not work each week of the year, or each week of the period of appointment if less than one year, the weekly pay rate shall be the average

weekly earnings established by dividing the total earnings during the one year immediately preceding the date of injury, excluding overtime, by the number of weeks worked during that one year period. For the purposes of this computation, if the employee worked only a part of a workweek, such week is counted as one week. However, the average weekly earnings may not be less than 150 times the average daily wage earned in the employment during the days employed within the one year period immediately preceding the date of injury divided by 52 weeks.

(d) Premium, Sunday and holiday pay, night and shift differential, or other extra pay shall be included when computing wages for continuation of pay, but overtime pay shall not be included.

(e) Changes in pay or salary which would have otherwise occurred during the 45-day period (e.g., promotion, within-grade increase, demotion, termination of a temporary detail, etc.) are to be reflected in the continuation of an employee's pay under this subpart, and are to take effect at the time the event would otherwise have occurred.

[52 FR 10516, Apr. 1, 1987]

§ 10.206 Agency accounting and reporting of continuation of pay.

(a) Pending development of a system within the Office for directly capturing and tabulating data on continuing payments to employees under 5 U.S.C. 8118, each agency and instrumentality of the United States having an employee who is in a continuation of pay status during the calendar quarter shall submit a report to the Office within 30 days after the end of each quarter (address: Director, Office of Workers' Compensation Programs, U.S. Department of Labor, Washington, DC 20210).

(b) Quarterly reports are to include data on all continuation of pay cases paid in the quarter for only those employees who have returned to work or exceeded the 45-day period by the last pay date of the reporting agency or instrumentality during the quarter (employees who have not returned to work or exceeded the 45-day period by the