B-152421, OCT. 7, 1964

B-152421, OCT. 7, 1964

TO THE SECRETARY OF THE TREASURY:

REFERENCE IS MADE TO LETTER OF SEPTEMBER 9, 1964, FROM THE ACTING ASSISTANT SECRETARY OF THE TREASURY IN RESPONSE TO OUR LETTER OF FEBRUARY 18, 1964, B-152421, REQUESTING AN EXPRESSION OF YOUR VIEWS AS TO THE PROPRIETY OF SUBJECTING BACK PAY AND ALLOWANCES FOUND DUE A MEMBER OR FORMER MEMBERS OF THE COAST GUARD BY REASON OF A CORRECTION OF HIS MILITARY RECORDS, PURSUANT TO THE PROVISIONS OF 10 U.S.C. 1552, TO A DEDUCTION OF EARNINGS RECEIVED FROM CIVILIAN EMPLOYMENT DURING THE CORRESPONDING PERIOD.

WE SUGGESTED FOR REASONS STATED IN OUR LETTER THAT DEDUCTIONS MIGHT PROPERLY BE MADE OF INTERIM OUTSIDE EARNINGS FROM AWARDS OF BACK PAY AND ALLOWANCES FOUND DUE MEMBERS OR FORMER MEMBERS IN ERRONEOUS AND ILLEGAL SEPARATION CASES PURSUANT TO THE CORRECTION OF THEIR MILITARY OR NAVAL RECORDS UNDER EXISTING LAW. THE ACTING ASSISTANT SECRETARY QUESTIONS THE PROPRIETY OF MAKING SUCH DEDUCTIONS INASMUCH AS SECTION 1552 OF TITLE 10 NOW MAKES NO PROVISION FOR THE DEDUCTION OF EARNINGS FROM INTERIM CIVILIAN EMPLOYMENT, WHEREAS ONLY THREE YEARS BEFORE IT WAS SPECIFICALLY PROVIDED IN THE ACT OF JUNE 10, 1948, CH. 447, 62 STAT. 354, 5 U.S.C. 652 (B), THAT INTERIM EARNINGS SHOULD BE DEDUCTED IN THE CASE OF CIVILIAN EMPLOYEES WHO ARE REINSTATED. HE ADDS THAT THE ABSENCE OF SUCH A PROVISION IN 10 U.S.C. 1552 AFFORDS A REASONABLE BASIS FOR CONCLUDING THAT CONGRESS DID NOT INTEND SUCH DEDUCTIONS IN CASES OF RESTORED MILITARY PERSONNEL.

UPON FURTHER CONSIDERATION OF THE MATTER WE ARE INCLINED TO THE VIEW THAT THE LONG-STANDING INTERPRETATION OF 10 U.S.C. 1552 AND PRACTICES BASED THEREON ARE NOT SO ERRONEOUS AS TO REQUIRE US TO OBJECT TO THE PAYMENT OF BACK PAY AND ALLOWANCES TO MEMBERS AND FORMER MEMBERS OF THE COAST GUARD UPON THE CORRECTION OF THEIR MILITARY RECORDS. ACCORDINGLY, FOR THE PRESENT, PAYMENTS OF BACK PAY MADE IN SUCH CASES WITHOUT DEDUCTION OF INTERIM EARNINGS WILL BE PASSED TO CREDIT IN THE ACCOUNTS OF THE DISBURSING AND CERTIFYING OFFICERS CONCERNED.

IT IS OUR INTENTION, HOWEVER, TO RECOMMEND TO CONGRESS AT THE BEGINNING OF THE NEXT SESSION THAT THE PROVISIONS OF 10 U.S.C. 1552 BE APPROPRIATELY AMENDED TO PROVIDE SPECIFIC STATUTORY AUTHORITY FOR SUCH DEDUCTIONS SO AS TO PROVIDE UNIFORM TREATMENT OF MILITARY AND CIVILIAN PERSONNEL IN MAKING ADJUSTMENTS FOR LOSS OF COMPENSATION ARISING OUT OF ERRONEOUS OR ILLEGAL SEPARATION OR SUSPENSION FROM THE SERVICE.

WE ARE ADVISING THE SECRETARY OF DEFENSE BY LETTER OF THIS DATE, B 152421, COPY ENCLOSED, OF OUR CONCLUSION IN THIS MATTER.