A program to compensate federal workers injured on the job is susceptible to fraud and abuse, the Postal Service office of the inspector general is expected to testify on Wednesday afternoon.

“Investigations have found fraudulent claimants working as martial arts instructors, landscapers, hairdressers and mechanics,”  Postal Inspector General David Williams said in  prepared testimony.  ”Even when a claimant is convicted, DOL [Department of Labor] is slow to terminate benefits.” Bill Siemer, the Postal Service’s assistant inspector general for investigations, will appear on behalf of his boss at a House Oversight Committee panel chaired by Dennis Ross (R., Fla.)

The IG’s office has found the 95-year-old Federal Employees Compensation Act program is “susceptible to fraud” because employees can keep changing their claim and can hire their own physician to assess injuries. The IG’s office also said it found that the Department of Labor, which runs the program, benefits from approving claims and is often unresponsive when investigators probe cases.

Federal agencies have to pay the Department of Labor for their employees’ claims, which comes to more than $1 billion a year for the Postal Service.

Workers deemed to be disabled get between 66% and 75% of their basic salary, tax free, along with medical expenses, as long as they are unable to work. There is no age limit on receiving benefits, which are typically more generous than retirement plans, so some recipients opt to stay in the program for the rest of their lives rather than retiring.

As a result, the program has become “a lucrative retirement plan,” according to the IG’s office, where investigators have found that the Postal Service’s 15,800 disabled employees include 900 who have passed their 80th birthday, and that the oldest is 98. Another 2,200 are over 65, and some 5,600 more are over 55.

Gary Steinberg, acting director of the Labor Department’s office of workers’ compensation programs, is expected to agree that there should be changes to the benefits provided, including curbs on the amount that claimants can receive in their retirement years.

He stated in prepared testimony that that the program does result “in certain FECA claimants receiving far more compensation in their post-retirement years than if they had completed their federal careers and received normal retirement benefits like their colleagues” and that, as a result, injured workers may have “an incentive to consciously or unconsciously resist rehabilitation.”

But he also said that the department “actively manages” the program so that benefits are properly paid, and that the program’s basic purpose is important.