What is a Deferred Recoupment Agreement in Washington L&I?

What is a Deferred Recoupment Agreement?

A Deferred Recoupment Agreement is a contract between the Washington Department of Labor and Industries and an injured worker agreeing that the injured worker does not need to repay an overpayment of L&I benefits unless or until the injured worker seeks new monetary benefits in either their current or a future workers’ compensation claim.

When is a Deferred Recoupment Agreement Utilized?

The Department may voluntarily agree to defer overpayments it has charged to injured workers under particular circumstances.  For example, this may occur when an overpayment results due to a claim allowance reversal or because temporary disability benefits were paid in respect of a disabling medical condition that is subsequently found to be unrelated to the injured worker’s industrial injury or occupational disease.

Can Anyone Compel the Department to Accept a Deferred Recoupment Agreement?

No. The Department’s authority to enter a Deferred Recoupment Agreement stems from its Director’s statutory discretion to waive overpayments in whole or in part.  A court of law is unlikely to grant any form of review to such a discretionary determination and has no authority to order the Director to execute such an agreement.  If a court reviewed such a discretionary determination, that review would only be to determine if the Director abused his or her discretion in denying the agreement, not to determine the merits of the denial.

What are the Benefits of a Deferred Recoupment Payments to an Injured Worker?

The injured worker does not presently and may not ever have to repay the amount of overpayment charged in their Washington workers’ compensation claim.  The money that was overpaid essentially becomes a non-interest bearing loan from the Department to the injured worker, and that loan will be without recourse if the worker never files an additional claim for monetary benefits. The injured worker may also enter into such an agreement to avoid the costs and expenses associated with litigation to determine the legal validity of the overpayment charged.

Where can I Find a Sample Deferred Recoupment Agreement?

An example of a Deferred Recoupment Agreement can be downloaded in redacted form from Washington Law Center’s information page discussing Deferred Recoupment Agreements. That download is available by clicking here.

The Department of Labor & Industries charges overpayment and engages in recoupment collection activities pursuant to RCW 51.32.240.  If you are an injured worker charged with an overpayment, please consult the experienced attorneys of Washington Law Center, today.