A-15475, SEPTEMBER 30, 1926, 6 COMP. GEN. 223

A-15475: Sep 30, 1926

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THERE IS NO PROHIBITION AGAINST PAYMENT OF DISABILITY COMPENSATION TO AN ENROLLED MEMBER OF THE NAVAL RESERVE IN RECEIPT OF RETAINER PAY. WITH RESPECT TO ENROLLED MEMBERS IS NO LONGER CONTROLLING. PROHIBIT PAYMENT OF DISABILITY COMPENSATION TO TRANSFERRED MEMBERS OF THE FLEET NAVAL RESERVE WHO ARE TRANSFERRED AFTER 16 OR 20 YEARS' SERVICE IN THE NAVY AND IN RECEIPT OF RETAINER PAY AMOUNTING TO ONE-THIRD AND ONE-HALF. OF THE BASE PAY THEY WERE RECEIVING AT THE CLOSE OF THEIR LAST NAVAL SERVICE. FOR THE REASON THAT SUCH RETAINER PAY IS IN THE NATURE OF "RETIREMENT" PAY WITHIN THE MEANING OF THE WORLD WAR VETERANS' ACT. 1926: I HAVE YOUR LETTER OF AUGUST 20. WAS PROHIBITED BY SECTION 312 OF THE WAR RISK INSURANCE ACT OF OCTOBER 6.

A-15475, SEPTEMBER 30, 1926, 6 COMP. GEN. 223

VETERANS' BUREAU - DISABILITY COMPENSATION - NAVAL RESERVE MEMBERS UNDER THE PROVISIONS OF SECTION 212 OF THE WORLD WAR VETERANS' ACT, AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 798, THERE IS NO PROHIBITION AGAINST PAYMENT OF DISABILITY COMPENSATION TO AN ENROLLED MEMBER OF THE NAVAL RESERVE IN RECEIPT OF RETAINER PAY. DECISION OF MAY 10, 1923, 2 COMP. GEN. 743, WITH RESPECT TO ENROLLED MEMBERS IS NO LONGER CONTROLLING. THE PROVISIONS OF SECTION 212 OF THE WORLD WAR VETERANS' ACT, AS AMENDED BY THE ACT OF JULY 2, 1936, 44 STAT. 798, PROHIBIT PAYMENT OF DISABILITY COMPENSATION TO TRANSFERRED MEMBERS OF THE FLEET NAVAL RESERVE WHO ARE TRANSFERRED AFTER 16 OR 20 YEARS' SERVICE IN THE NAVY AND IN RECEIPT OF RETAINER PAY AMOUNTING TO ONE-THIRD AND ONE-HALF, RESPECTIVELY, OF THE BASE PAY THEY WERE RECEIVING AT THE CLOSE OF THEIR LAST NAVAL SERVICE, PLUS ALL PERMANENT ADDITIONS THERETO, FOR THE REASON THAT SUCH RETAINER PAY IS IN THE NATURE OF "RETIREMENT" PAY WITHIN THE MEANING OF THE WORLD WAR VETERANS' ACT. DECISION OF MAY 10, 1923, 2 COMP. GEN. 743, AS TO TRANSFERRED MEMBERS OF THE FLEET NAVAL RESERVE REMAINS IN FORCE UNDER THE WORLD WAR VETERANS' ACT, AS AMENDED.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, SEPTEMBER 30, 1926:

I HAVE YOUR LETTER OF AUGUST 20, 1926, REQUESTING RECONSIDERATION OF DECISION DATED MAY 10, 1923, 2 COMP. GEN. 743, HOLDING THAT PAYMENT OF DISABILITY COMPENSATION TO A MEMBER OF THE NAVAL RESERVE FORCE, WHETHER AN ENROLLED MEMBER OR A TRANSFERRED MEMBER, IN RECEIPT OF RETAINER PAY, WAS PROHIBITED BY SECTION 312 OF THE WAR RISK INSURANCE ACT OF OCTOBER 6, 1917, 40 STAT. 408, PROVIDING:

THAT COMPENSATION UNDER THIS ARTICLE SHALL NOT BE PAID WHILE THE PERSON IS IN RECEIPT OF SERVICE OR RETIREMENT PAY. * * *

THE DECISION IN QUESTION CONSIDERED TWO GENERAL CLASSES OF NAVAL RESERVISTS BASED ON THE CHARACTER OF RETAINER PAY RECEIVED, SUCH CLASSES BEING (1) ENROLLED MEMBERS WHO WERE PAID RETAINER PAY IN CONSIDERATION OF AN OBLIGATION TO SERVE IN THE NAVY IN TIME OF WAR OR NATIONAL EMERGENCY AND TO KEEP THEMSELVES CONSTANTLY FIT FOR THAT PURPOSE, AND (2) TRANSFERRED MEMBERS OF THE FLEET NAVAL RESERVE WHO WERE TRANSFERRED FROM THE REGULAR NAVY WITH 16 OR 20 YEARS' SERVICE AND RECEIVING AS RETAINER PAY ONE-THIRD AND ONE-HALF, RESPECTIVELY, OF THE BASE PAY THEY WERE RECEIVING AT THE CLOSE OF THEIR LAST NAVAL SERVICE, PLUS ALL PERMANENT ADDITIONS THERETO. ACT OF AUGUST 29, 1916, 39 STAT. 590. IN SAID DECISION RETAINER PAY OF ENROLLED MEMBERS WAS BROUGHT WITHIN THE PROHIBITION IN THE WAR RISK INSURANCE ACT UNDER THE TERM "SERVICE" PAY, AND RETAINER PAY OF TRANSFERRED MEMBERS OF THE FLEET NAVAL RESERVE WAS BROUGHT WITHIN THE PROHIBITION IN THE STATUTE UNDER THE TERM "RETIREMENT" PAY.

THE DECISION WAS CORRECT UNDER THE LAW THEN IN FORCE. SECTION 212 OF THE WORLD WAR VETERANS' ACT, AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 798, PROVIDES:

* * * THAT COMPENSATION UNDER THIS TITLE SHALL NOT BE PAID WHILE THE PERSON IS IN RECEIPT OF ACTIVE SERVICE OR RETIREMENT PAY, THIS PROVISO TO BE EFFECTIVE AS OF APRIL 6, 1917. * * *

THE WORD "ACTIVE" WAS FIRST ADDED BY THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 623, BUT NOT MADE RETROACTIVE BY THAT STATUTE. THE ACT OF JULY 2, 1926, SUPRA, MADE THE PROVISION RETROACTIVE FROM APRIL 6, 1917. ADDITION OF THE WORD "ACTIVE" BEFORE THE WORD"SERVICE" HAS THE EFFECT OF REMOVING THE PROHIBITION AGAINST PAYMENT OF DISABILITY COMPENSATION TO THOSE ENROLLED MEMBERS OF THE NAVAL RESERVE FORCE UNDER THE ACT OF AUGUST 29, 1916, ON INACTIVE DUTY WHOSE RETAINER PAY WAS TERMED "SERVICE" PAY IN THE FORMER DECISION OF THIS OFFICE. THAT DECISION, IN SO FAR AS CONCERNS SUCH RESERVISTS, IS NO LONGER CONTROLLING.

BUT NO CHANGE HAS BEEN MADE IN THE STATUTE WITH RESPECT TO THE PROHIBITION AGAINST PAYMENT OF DISABILITY COMPENSATION TO PERSONS IN RECEIPT OF "RETIREMENT" PAY. THE RETAINER PAY RECEIVED BY TRANSFERRED MEMBERS OF THE FLEET NAVAL RESERVE AFTER 16 OR 20 YEARS' SERVICE IN THE NAVY UNDER THE PROVISIONS OF THE ACT OF AUGUST 29, 1916, SUPRA, WAS, AND STILL IS, UNDER THE TERMS OF THE ACT OF FEBRUARY 28, 1925, 43 STAT. 1087, IN THE NATURE OF REDUCED "RETIREMENT" PAY. SAID PAY IS BASED ON LENGTH OF SERVICE ALONE, THE RATES BEING FIXED IN RELATION TO THE RATES OF ACTIVE- SERVICE PAY AT TIME OF TRANSFER TO THE RESERVE. THE PAY HAS PRACTICALLY ALL THE ELEMENTS OF RETIREMENT PAY. I AM CONSTRAINED TO HOLD, THEREFORE, THAT THE PROHIBITION HAS NOT BEEN REMOVED BY THE AMENDED STATUTE AGAINST PAYMENT OF DISABILITY COMPENSATION TO MEMBERS OF THE FLEET NAVAL RESERVE TRANSFERRED AFTER 16 OR 20 YEARS' SERVICE IN THE NAVY AND IN RECEIPT OF ONE-THIRD OR ONE HALF OF THE BASE PAY THEY WERE RECEIVING AT THE CLOSE OF THEIR LAST NAVAL SERVICE, PLUS ALL PERMANENT ADDITIONS THERETO.

DECISION

YOU QUOTE LETTER FROM THE PRESIDENT OF THE FLEET NAVAL RESERVE ASSOCIATION RELATIVE TO THE CASE OF JAMES GREGG, WHO IS A TRANSFERRED MEMBER OF THE FLEET NAVAL RESERVE IN RECEIPT OF RETAINER PAY AT THE RATE OF $67 PER MONTH. IT IS ALLEGED THAT HE HAS BEEN GIVEN A RATING OF TOTAL PERMANENT DISABILITY AND AWARDED DISABILITY COMPENSATION AT THE RATE OF $100 PER MONTH, WHICH HAS BEEN DENIED HIM BECAUSE OF THE PROVISION OF SECTION 312 OF THE WAR RISK INSURANCE ACT, AS CONSTRUED BY THE DECISION OF THIS OFFICE. IF THE FACTS ARE AS STATED, PAYMENT OF DISABILITY COMPENSATION TO HIM WOULD BE PROHIBITED UNDER THE PROVISIONS OF THE WORLD WAR VETERANS' ACT, AS AMENDED, AS LONG AS HE REMAINS A MEMBER OF THE FLEET NAVAL RESERVE AND IN RECEIPT OF RETAINER PAY. HE MAY NOT WAIVE RECEIPT OF RETAINER PAY AS A MEMBER OF THE RESERVE SO AS TO RECEIVE PAYMENT OF DISABILITY COMPENSATION. 2 COMP. GEN. 744. HOWEVER, IF HE SHOULD BE DISCHARGED FROM THE FLEET NAVAL RESERVES, THUS DISCONTINUING THE PAY AS A MEMBER THEREOF, THE STATUTORY PROHIBITION, SUPRA, WOULD NOT APPLY TO PREVENT PAYMENT OF DISABILITY COMPENSATION UNDER A LAWFUL AWARD FROM THE EFFECTIVE DATE OF HIS DISCHARGE. IN THIS CONNECTION IT MAY BE NOTED THAT TRANSFERRED MEMBERS OF THE FLEET NAVAL RESERVE MAY BE DISCHARGED ON THEIR OWN APPLICATION. ACT OF AUGUST 29, 1916, 39 STAT. 591. SEE ALSO SECTION 23, ACT OF FEBRUARY 28, 1925, 43 STAT. 1087.