Proposal to Reduce Fed Workers’ Comp Benefits Attached to Postal Bill

A provision in bipartisan Senate postal reform legislation would overhaul workers’ compensation policies for all federal employees.

Titled the 2013 Workers’ Compensation Reform Act, the provision -- introduced by Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla. -- would cut benefits for federal workers injured on the job once they reach retirement age. Currently, federal employees receive 66 2/3 percent of their basic salary tax-free, designed to approximately replicate their entire post-tax salary. That figure is bumped to 75 percent if the employee has dependents.  Related medical expenses are also covered.

The new plan would trim the benefit to 50 percent of an employee’s salary, once that employee is eligible for retirement. Additional compensation for dependents would no longer be provided.

The changes would not affect individuals eligible for retirement on the date of the bill’s enactment, those with an exempted disability condition or those who “face financial hardship” -- such as workers eligible for food stamps.

The proposal also contains a provision that would boost efforts to help employees on workers’ compensation return to work.

A similar proposal was included in the postal reform bill Carper sponsored last Congress, which cleared the Senate but died in the House. Some Democrats and federal employee unions opposed that measure.

Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, has expressed support for previous Senate proposals to overhaul the federal workers’ compensation system. Issa’s own postal reform bill included changes for only postal workers’ compensation, but he said during the bill’s markup he only put them in so the final bill would adopt the Senate’s broader plan after going through conference negotiations. 

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