A-12131, APRIL 3, 1926, 5 COMP. GEN. 788

A-12131: Apr 3, 1926

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THE EFFECTIVE DATE FOR DISCONTINUANCE OF DISABILITY COMPENSATION PAYMENTS UNDER PRIOR AWARDS DETERMINED UPON REVIEW TO HAVE BEEN UNLAWFUL BECAUSE THE DISEASE OR DISABILITY WAS NOT SERVICE CONNECTED. IS THE FIRST DAY OF THE THIRD CALENDAR MONTH NEXT SUCCEEDING THAT IN WHICH THE DISCONTINUANCE IS DETERMINED. 1926: I HAVE YOUR LETTER OF NOVEMBER 25. MAY BE PROPERLY APPLIED TO THOSE CASES WHERE SERVICE CONNECTION ONCE HAVING BEEN GRANTED FOR A DISABILITY IS UPON RECONSIDERATION BROKEN. IF COMPENSATION IS INCREASED. NO REDUCTION OR DISCONTINUANCE OF COMPENSATION SHALL BE EFFECTIVE UNTIL THE 1ST DAY OF THE THIRD CALENDAR MONTH NEXT SUCCEEDING THAT IN WHICH SUCH REDUCTION OR DISCONTINUANCE IS DETERMINED.'.

A-12131, APRIL 3, 1926, 5 COMP. GEN. 788

VETERANS' BUREAU - DISCONTINUANCE OF PAYMENTS OF DISABILITY COMPENSATION UNDER SECTION 205 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 622, THE EFFECTIVE DATE FOR DISCONTINUANCE OF DISABILITY COMPENSATION PAYMENTS UNDER PRIOR AWARDS DETERMINED UPON REVIEW TO HAVE BEEN UNLAWFUL BECAUSE THE DISEASE OR DISABILITY WAS NOT SERVICE CONNECTED, IS THE FIRST DAY OF THE THIRD CALENDAR MONTH NEXT SUCCEEDING THAT IN WHICH THE DISCONTINUANCE IS DETERMINED, EXCEPT IN CASES OF FRAUD PARTICIPATED IN BY THE BENEFICIARY.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, APRIL 3, 1926:

I HAVE YOUR LETTER OF NOVEMBER 25, 1925, AS FOLLOWS:

THE QUESTION HAS ARISEN IN THIS OFFICE AS TO WHETHER SECTION 205 OF THE WORLD WAR VETERANS' ACT, AS AMENDED, MAY BE PROPERLY APPLIED TO THOSE CASES WHERE SERVICE CONNECTION ONCE HAVING BEEN GRANTED FOR A DISABILITY IS UPON RECONSIDERATION BROKEN.

SECTION 205 OF THE WORLD WAR VETERANS' ACT, AS AMENDED, READS AS FOLLOWS:

"UPON ITS OWN MOTION OR UPON APPLICATION THE BUREAU MAY AT ANY TIME REVIEW AN AWARD AND, IN ACCORDANCE WITH THE FACTS FOUND UPON SUCH REVIEW, MAY END, DIMINISH, OR INCREASE THE COMPENSATION PREVIOUSLY AWARDED, OR, IF COMPENSATION IS INCREASED, OR IF COMPENSATION HAS BEEN REFUSED, REDUCED, OR DISCONTINUED, MAY (SUBJECT TO THE PROVISIONS OF SECTION 210 HEREOF) AWARD COMPENSATION IN PROPORTION TO THE DEGREE OF DISABILITY SUSTAINED AS OF THE DATE SUCH DEGREE OF DISABILITY BEGAN, BUT NOT EARLIER THAN THE DATE OF DISCHARGE OR RESIGNATION. EXCEPT IN CASES OF FRAUD PARTICIPATED IN BY THE BENEFICIARY, NO REDUCTION IN COMPENSATION SHALL BE MADE RETROACTIVE, AND NO REDUCTION OR DISCONTINUANCE OF COMPENSATION SHALL BE EFFECTIVE UNTIL THE 1ST DAY OF THE THIRD CALENDAR MONTH NEXT SUCCEEDING THAT IN WHICH SUCH REDUCTION OR DISCONTINUANCE IS DETERMINED.'

IT HAS BEEN HELD BY THE BUREAU THAT WHEN, UPON A PROPER RECONSIDERATION OF THE CASE IT IS FOUND THAT THE DISABILITY FOR WHICH COMPENSATION WAS FORMERLY PAID IS IN NO WAY ATTRIBUTABLE TO OR CONNECTED WITH THE MILITARY SERVICE, AND THAT SERVICE CONNECTION FOR SUCH DISABILITY IS BROKEN, THAT THERE COULD BE IN LAW NO COMPENSATION FOR SUCH DISABILITIES.

IT HAS BEEN FURTHER HELD THAT ACTION TAKEN IN DISCONTINUING SUCH AWARDS OF COMPENSATION CAN NOT BE REGARDED AS A REDUCTION OR DISCONTINUANCE OF COMPENSATION WITHIN THE MEANING OF SECTION 205, SUPRA, INASMUCH AS IN THE OPINION OF THE BUREAU THE COMPENSATION WAS NOT LEGALLY PAYABLE IN THE FIRST INSTANCE. THEREFORE, IN TERMINATING SUCH AWARDS ACTION IN THAT REGARD HAS BEEN TAKEN EFFECTIVE AS OF THE DATE OF LAST PAYMENT.

THE THEORY UPON WHICH THE BUREAU'S POSITION WAS ARRIVED AT IS THAT THE COMPENSATION REFERRED TO IN SECTION 205, SUPRA, IS ONLY SUCH COMPENSATION AS WAS LEGALLY PAYABLE; CONSEQUENTLY, THE SECTION IS NOT APPLICABLE TO THOSE CASES WHERE SERVICE CONNECTION HAS BEEN BROKEN, FOR THE REASON AS STATED, THERE BEING NO SERVICE CONNECTED DISABILITY, THERE COULD NOT IN LAW BE ANY COMPENSATION PAYABLE.

YOUR ATTENTION IS INVITED TO THE FACT IN THIS CONNECTION THAT WHERE SERVICE CONNECTION HAS ONCE BEEN GRANTED FOR AN ALLEGED DISABILITY THAT THE SAME IS NOT BROKEN EXCEPT UPON A VERY CAREFUL RECONSIDERATION OF THE ENTIRE MATTER, AND THE BREAKING OF SERVICE CONNECTION IS NOT A MATTER OF MERE SHIFTING OF JUDGMENT.

THE BUREAU'S POSITION IN THE PREMISES HAS BEEN QUESTIONED BY THE NATIONAL JUDGE ADVOCATE OF THE DISABLED AMERICAN VETERANS AND HIS POSITION IS SET FORTH IN A BRIEF CONTAINING ARGUMENTS IN THE MATTER, WHICH IS SUBMITTED HEREWITH FOR SUCH CONSIDERATIONS AS YOU MAY DEEM APPROPRIATE.

IT MAY BE STATED WITH RESPECT TO THE COMMENT IN THE JUDGE ADVOCATE'S BRIEF RELATIVE TO DIRECTOR'S DECISION, WORLD WAR VETERANS' ACT, 1924, NO. 114, THAT THE POSITION OF THE BUREAU IN THE MATTER RESTS UPON THE FACT THAT THE COMPENSATION DISCONTINUED THEREIN IS SUCH COMPENSATION AS WAS LEGALLY PAYABLE IN THE FIRST INSTANCE. IN OTHER WORDS, THE TERM "COMPENSATION" USED IN THAT DECISION WAS MEANT TO INCLUDE ONLY SUCH COMPENSATION AS WAS LEGALLY PAYABLE AND NOT COMPENSATION THAT MAY HAVE BEEN PAYABLE IN ANY CASE WHERE ERRONEOUS SERVICE CONNECTION WAS GRANTED.

THE QUOTED SECTION OF THE WORLD WAR VETERANS' ACT IS FOUND IN THE ACT OF JUNE 7, 1924, 43 STAT. 622. THE FIRST SENTENCE THEREOF IS A REENACTMENT (WITH A CHANGE NOT HERE MATERIAL) OF SECTION 305 OF THE WAR-RISK INSURANCE ACT AS AMENDED BY THE ACT OF AUGUST 9, 1921, 42 STAT. 154. UNDER THIS SECTION OF THE WAR-RISK INSURANCE ACT, AS AMENDED, ANY AWARD OF COMPENSATION WAS SUBJECT TO REVIEW BY THE DIRECTOR OF THE VETERANS' BUREAU TO DETERMINE QUESTIONS OF FACT DE NOVO REGARDLESS OF PRIOR FINDINGS ON THE SAME OR DIFFERENT EVIDENCE. NO DISTINCTION AS TO THIS AUTHORITY TO REVIEW HAS HERETOFORE BEEN MADE BETWEEN AWARDS TO BE REVIEWED TO DETERMINE THE SERVICE CONNECTION OF THE DISABILITY ON WHICH THE AWARD WAS BASED AND AWARDS TO BE REVIEWED TO DETERMINE THE DEGREE OR PERMANENCE OF THE CONDITION OF DISABILITY. 3 COMP. GEN. 41. IN FACT, IN THE CITED CASE, WHERE THERE WAS CONSIDERED THE AUTHORITY OF ONE DIRECTOR TO REVIEW THE AWARDS OF HIS PREDECESSOR IN OFFICE, THE CASES UNDER CONSIDERATION INVOLVED DETERMINATION OF WHETHER THE DISEASE OR INJURY WAS IN "LINE OF DUTY" OR DUE TO SOLDIER'S "WILLFUL MISCONDUCT" AND OTHERS INVOLVING SERVICE CONNECTION OF THE DISABILITY AND THE DEGREE OF THE DISABILITY FOR A SPECIFIC PERIOD IN THE PAST. THE DECISION HELD THAT ANY CHANGE IN THE AWARD UPON REVIEW ENDING OR DIMINISHING THE COMPENSATION PREVIOUSLY AWARDED WAS EFFECTIVE ONLY FROM THE DATE OF THE CHANGE, PAST PAYMENTS NOT TO BE DISTURBED. THE PRACTICAL EFFECT THEREOF HAS BEEN TO CONSIDER THE ACTION AS TERMINATING COMPENSATION AS OF THE DATE OF LAST PAYMENT UNDER THE PRIOR AWARD.

THIS RULE AS TO THE EFFECTIVE DATE OF DISCONTINUANCE OR REDUCTION OF COMPENSATION PAYMENTS WAS INTENDED TO APPLY TO ANY AWARD REVIEWED BY THE VETERANS' BUREAU, INCLUDING THOSE WHERE COMPENSATION WAS DISCONTINUED BECAUSE OF A DETERMINATION, UPON REVIEW, THAT THE DISABILITY WAS NOT SERVICE CONNECTED, AND IT IS UNDERSTOOD THAT SUCH WAS ITS APPLICATION BY THE VETERANS' BUREAU AS TO ALL AWARDS DISCONTINUING COMPENSATION PRIOR TO THE ENACTMENT OF THE WORLD WAR VETERANS' ACT. YOU NOW STATE THAT YOUR BUREAU HAS CONTINUED TO APPLY THAT RULE UNDER SECTION 205 OF THE WORLD WAR VETERANS' ACT IN THE MATTER OF DISCONTINUING COMPENSATION UNDER PRIOR AWARDS IN THOSE CASES WHERE THE REVIEW DETERMINED THAT THE DISEASE OR DISABILITY WAS NOT SERVICE CONNECTED. THAT IS TO SAY, THE VETERANS' BUREAU HAS CONSTRUED AS HAVING NO APPLICATION TO SUCH CASES THE FOLLOWING SENTENCE WHICH WAS ADDED TO SECTION 305 OF THE WAR-RISK INSURANCE ACT AS AMENDED WHEN IT WAS REENACTED AS SECTION 205 OF THE WORLD WAR VETERANS' ACT:

* * * EXCEPT IN CASES OF FRAUD PARTICIPATED IN BY THE BENEFICIARY, NO REDUCTION IN COMPENSATION SHALL BE MADE RETROACTIVE, AND NO REDUCTION OR DISCONTINUANCE OF COMPENSATION SHALL BE EFFECTIVE UNTIL THE 1ST DAY OF THE THIRD CALENDAR MONTH NEXT SUCCEEDING THAT IN WHICH SUCH REDUCTION OR DISCONTINUANCE IS DETERMINED.

THE PLAIN TERMS OF THIS PROVISION WOULD APPEAR TO INDICATE AN INTENT TO PROVIDE THAT NO DISCONTINUANCE OF DISABILITY COMPENSATION BASED UPON A REVIEW UNDER THIS SECTION FOR ANY REASON WHATEVER, EXCEPT FRAUD PARTICIPATED IN BY THE BENEFICIARY, SHALL BE EFFECTIVE UNTIL THE FIRST DAY OF THE THIRD CALENDAR MONTH NEXT SUCCEEDING THAT IN WHICH SUCH DISCONTINUANCE IS DETERMINED. SAID SENTENCE WAS ADDED TO THE SECTION TO CHANGE THE FORMER RULE FOR REDUCTION OR DISCONTINUANCE OF PAYMENTS OF DISABILITY COMPENSATION UPON REVIEW OF PRIOR AWARDS, AND THE EVIDENT PURPOSE WAS TO PROVIDE A PERIOD DURING WHICH THE VETERAN MIGHT ADJUST HIS FINANCES TO MEET THE REDUCTION IN HIS INCOME. SEE PAGES 156 AND 157 OF THE "HEARINGS BEFORE THE COMMITTEE ON WORLD WAR VETERANS' LEGISLATION, HOUSE OF REPRESENTATIVES, SIXTY-EIGHTH CONGRESS, SECOND SESSION.' THERE APPEARS NO INDICATION OF AN INTENT EXPRESSED OR IMPLIED TO MAKE ANY DISTINCTION BETWEEN PRIOR AWARDS BASED ON THE REASON FOR DISCONTINUANCE, BUT THE CLEAR INTENT WOULD SEEM TO BE TO APPLY THE NEW RULE PRESCRIBED BY THE STATUTE TO ALL AWARDS REVIEWABLE UNDER THIS SECTION.

IT WILL BE NOTED THAT THE STATUTE EXPRESSLY EXCEPTS FROM THE GENERAL RULE "CASES OF FRAUD PARTICIPATED IN BY THE BENEFICIARY.' SUCH CLASS OF CASES SHOULD INCLUDE NOT ONLY FRAUD RESULTING FROM SOME AFFIRMATIVE ACTION OF THE BENEFICIARY, SUCH AS A FALSE STATEMENT KNOWINGLY MADE, BUT ALSO CONCEALMENT OF, OR SILENCE AS TO, A MATERIAL FACT WITH INTENT TO DEFRAUD.

I AM CONSTRAINED TO HOLD, THEREFORE, THAT THE EFFECT OF THE PROVISION IS TO AUTHORIZE CONTINUANCE OF PAYMENTS OF COMPENSATION IN ALL CASES, EXCEPT WHERE THERE IS EVIDENCE OF FRAUD PARTICIPATED IN BY THE BENEFICIARY, UNTIL THE "1ST DAY OF THE THIRD CALENDAR MONTH NEXT SUCCEEDING THAT IN WHICH SUCH REDUCTION OR DISCONTINUANCE IS DETERMINED.'