B-116606, B-118007, JANUARY 27, 1954, 33 COMP. GEN. 309

B-116606,B-118007: Jan 27, 1954

Additional Materials:

Contact:

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

 

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

VOLUNTARY ALLOTMENTS AND FAMILY ALLOWANCES - ERRONEOUS OVERPAYMENTS - DEBT COLLECTION PROCEDURE PAYEES OF VOLUNTARY ALLOTMENTS OF PAY AND THE RECIPIENTS OF FAMILY ALLOWANCE PAYMENTS ARE LIABLE SOLELY TO UNITED STATES FOR OVERPAYMENTS. IF ERRONEOUS PAYMENTS ARE MADE AS A RESULT OF THE SERVICEMAN'S FRAUD. OR MISTAKE THE SERVICEMAN AND PAYEE JOINTLY ARE LIABLE FOR REFUND. VOLUNTARY ALLOTMENT OR FAMILY ALLOWANCE OVERPAYMENTS MADE TO THE MEMBER'S DEPENDENTS FOR PERIODS AFTER THE MEMBER'S SEPARATION FROM THE SERVICE SHOULD NOT BE COLLECTED FROM FORMER MEMBER EXCEPT WHERE PAYMENTS WERE MADE TO MEMBER'S WIFE OR TO OR ON BEHALF OF MEMBER'S MINOR CHILDREN. THE PAYMENT IS LESS THAN $200. OR WAS NOT CONTINUED FOR MORE THAN THREE MONTHS AFTER MEMBER'S DISCHARGE OR RELEASE FROM ACTIVE DUTY.

B-116606, B-118007, JANUARY 27, 1954, 33 COMP. GEN. 309

VOLUNTARY ALLOTMENTS AND FAMILY ALLOWANCES - ERRONEOUS OVERPAYMENTS - DEBT COLLECTION PROCEDURE PAYEES OF VOLUNTARY ALLOTMENTS OF PAY AND THE RECIPIENTS OF FAMILY ALLOWANCE PAYMENTS ARE LIABLE SOLELY TO UNITED STATES FOR OVERPAYMENTS; HOWEVER, IF ERRONEOUS PAYMENTS ARE MADE AS A RESULT OF THE SERVICEMAN'S FRAUD, MISREPRESENTATION, OR MISTAKE THE SERVICEMAN AND PAYEE JOINTLY ARE LIABLE FOR REFUND. VOLUNTARY ALLOTMENT OR FAMILY ALLOWANCE OVERPAYMENTS MADE TO THE MEMBER'S DEPENDENTS FOR PERIODS AFTER THE MEMBER'S SEPARATION FROM THE SERVICE SHOULD NOT BE COLLECTED FROM FORMER MEMBER EXCEPT WHERE PAYMENTS WERE MADE TO MEMBER'S WIFE OR TO OR ON BEHALF OF MEMBER'S MINOR CHILDREN, AND NOT THEN WHEN THE RECORD SHOWS SUBSTANTIAL EXTENUATING CIRCUMSTANCES IN MEMBER'S FAVOR, THE PAYMENT IS LESS THAN $200, OR WAS NOT CONTINUED FOR MORE THAN THREE MONTHS AFTER MEMBER'S DISCHARGE OR RELEASE FROM ACTIVE DUTY. MEMBER AND PAYEE ARE JOINTLY LIABLE FOR ANY DEDUCTIONS NOT MADE IN CONNECTION WITH FAMILY ALLOWANCE PAYMENTS FOR ANY INTERVENING MONTHS BETWEEN A CHANGE OF STATUS (DIVORCE, SEPARATION, ETC.) REQUIRING TERMINATION OF FAMILY ALLOWANCE AND DATE DISBURSING OFFICER RECEIVES NOTICE OF SUCH CHANGE, BUT ONLY PAYEE AND NOT MEMBER IS LIABLE FOR GOVERNMENT CONTRIBUTION FOR SUCH PERIOD UNLESS MEMBER WAS AT FAULT; ALSO, MEMBER IS NOT LIABLE FOR ANY PART OF SUCH ALLOWANCE AFTER MONTH DISBURSING OFFICER RECEIVED SUCH NOTICE. WHEN A REFUND OF ERRONEOUS PAYMENTS OF AN ALLOTMENT OR FAMILY ALLOWANCE MADE TO A WIFE OR DEPENDENT HAS BEEN RECEIVED FROM THE ENLISTED MEMBER WHO WAS NOT LEGALLY LIABLE THEREFOR, AS A RESULT OF PRIOR DEMANDS OR COLLECTION ACTION, SUCH PAYMENTS HAVE BEEN TREATED AS VOLUNTARY PAYMENTS ON A MORAL OBLIGATION, HOWEVER IF THE RECORD SHOWS THAT PAYMENTS OF THIS TYPE WERE NOT VOLUNTARY THE GENERAL ACCOUNTING OFFICE HAS ALLOWED CLAIMS FOR THEIR REFUND. WHEN AN ALLOTMENT OR FAMILY ALLOWANCE HAS BEEN PROPERLY PAID BUT THERE HAS BEEN A FAILURE TO MAKE THE REQUIRED DEDUCTION FROM THE SERVICE MEMBER'S PAY, THE MEMBER HAS BEEN OVERPAID IN HIS PAY ACCOUNT AND IS LEGALLY LIABLE TO REFUND SUCH OVERPAYMENT, BUT THE PAYEE OR RECIPIENT OF THE ALLOTMENT OR FAMILY ALLOWANCE IS NOT LIABLE. THE WAIVER AUTHORITY CONFERRED ON THE COMPTROLLER GENERAL OF THE UNITED STATES UNDER SECTION 13 OF THE DEPENDENTS ASSISTANCE ACT OF 1950, IS LIMITED TO INDEBTEDNESS GROWING OUT OF ERRONEOUS PAYMENTS OF ALLOWANCES UNDER THE AUTHORITY OF THE SERVICEMEN'S DEPENDENTS ALLOWANCE ACT OF 1942, AS AMENDED, AND THEREFORE AN INDEBTEDNESS RESULTING FROM NONDEDUCTION FROM MEMBER'S PAY OF HIS CONTRIBUTION TO THE FAMILY ALLOWANCE LEGALLY PAID TO DEPENDENTS UNDER THE 1942 ACT MAY NOT BE WAIVED BY THE GENERAL ACCOUNTING OFFICE. WHEN AN ALLOTMENT OR FAMILY ALLOWANCE HAS BEEN ERRONEOUSLY PAID OR OVERPAID (EITHER DURING A MEMBER'S SERVICE OR AFTER SEPARATION) AND THE SERVICE MEMBER WAS NOT AT FAULT, THE PAYEE OR RECIPIENT OF THE ALLOTMENT OR FAMILY ALLOWANCE IS LEGALLY LIABLE TO REFUND THE OVERPAYMENT, BUT THE MEMBER IS NOT LIABLE, EXCEPT FOR ANY REQUIRED FAMILY ALLOWANCE DEDUCTIONS NOT MADE FROM PAY DURING ACTIVE SERVICE. WHEN AN ALLOTMENT OR FAMILY ALLOWANCE HAS BEEN PAID OR OVERPAID ERRONEOUSLY AND THE SERVICE MEMBER WAS AT FAULT, THE MEMBER AND THE PAYEE ARE JOINTLY AND SEVERALLY LIABLE TO REPAY THE AMOUNT, AND COLLECTION MAY BE MADE WHOLLY FROM EITHER OR PARTLY FROM EACH. WHEN ERRONEOUS FAMILY ALLOWANCE PAYMENTS FOR PERIODS PRIOR TO A MEMBER'S SEPARATION FROM THE UNIFORMED SERVICES RESULT FROM THE MEMBER'S FRAUD, MISREPRESENTATION, NEGLIGENCE, OR MISTAKES FOR WHICH MEMBER IS RESPONSIBLE, OR FROM MEMBER'S FAILURE TO GIVE THE GOVERNMENT TIMELY NOTICE OF CHANGED CONDITIONS KNOWN TO THE MEMBER (SUCH AS DEATH OR DIVORCE OF A DEPENDENT, ETC.) AFFECTING THE ALLOWANCE, THE MEMBER IS REGARDED AS AT FAULT AND THEREFORE JOINTLY LIABLE WITH THE PAYEE TO REPAY THE AMOUNT OF THE OVERPAYMENT. A MEMBER OF THE UNIFORMED SERVICES IS GENERALLY REGARDED AS NOT AT FAULT FOR ANY ERRONEOUS ALLOTMENT OR FAMILY ALLOWANCE PAYMENTS MADE FOR PERIODS AFTER THE MEMBER'S SEPARATION FROM THE SERVICE, BUT THE PAYEE OR RECIPIENT OF SUCH PAYMENTS IS LIABLE TO REFUND SUCH PAYMENTS MADE FOR PERIODS BEYOND THE MEMBER'S SEPARATION, ALTHOUGH THE MEMBER AND THE PAYEE MAY BE JOINTLY LIABLE FOR PAYMENTS MADE FOR PERIODS PRIOR TO THE MEMBER'S SEPARATION. WHEN A FAMILY ALLOWANCE HAS BEEN ERRONEOUSLY PAID OR OVERPAID TO THE MEMBER'S WIFE OR UNMARRIED MINOR CHILD AFTER A MEMBER'S SEPARATION FROM THE UNIFORMED SERVICES AND NOTHING APPEARS TO REBUT THE PRESUMPTION THAT THE MEMBER RETURNED HOME AFTER SEPARATION AND WAS LIVING WITH THE WIFE OR CHILD AND KNEW OF THE OVERPAYMENTS AND THE OVERPAYMENTS CONTINUED FOR MORE THAN THREE MONTHS AFTER SEPARATION, AND THE TOTAL AMOUNT OVERPAID AFTER SEPARATION WAS AT LEAST $200, A CHARGE OF JOINT LIABILITY WILL BE RAISED AGAINST THE MEMBER AND THE PAYEE. WHEN A FAMILY ALLOWANCE HAS BEEN PROPERLY PAID BUT THERE HAS BEEN A FAILURE TO MAKE THE REQUIRED DEDUCTIONS FROM THE SERVICEMAN'S PAY, THERE HAS BEEN NO ERRONEOUS PAYMENT OF FAMILY ALLOWANCE, AND THEREFORE NO INDEBTEDNESS TO BE WAIVED UNDER SECTION 13 OF THE DEPENDENTS ASSISTANCE ACT OF 1950, WHICH CONFERS ON THE COMPTROLLER GENERAL OF THE UNITED STATES AUTHORITY TO WAIVE INDEBTEDNESS GROWING OUT OF ERRONEOUS PAYMENTS OF ALLOWANCES MADE UNDER AUTHORITY OF THE SERVICEMEN'S DEPENDENTS ALLOWANCE ACT OF 1942, AS AMENDED. WHEN A FAMILY ALLOWANCE HAS BEEN ERRONEOUSLY PAID OR OVERPAID AND THE SERVICE MEMBER IS JOINTLY LIABLE WITH THE RECIPIENT OF SUCH ALLOWANCE FOR ALL OR PART OF THE DEBT, SUCH INDEBTEDNESS AS TO BOTH (SERVICEMAN AND RECIPIENT) IS REGARDED AS AN ERRONEOUS PAYMENT OF FAMILY ALLOWANCES WITHIN MEANING OF SECTION 13 OF THE DEPENDENTS ASSISTANCE ACT OF 1950--- WHICH CONFERS ON THE COMPTROLLER GENERAL OF THE UNITED STATES AUTHORITY TO WAIVE SUCH INDEBTEDNESS. THE ADMINISTRATIVE PRACTICE OF RECOMMENDING, UNDER SECTION 13 OF THE DEPENDENTS ASSISTANCE ACT OF 1950, WAIVER OF RECOVERY OF ERRONEOUS PAYMENTS OF FAMILY ALLOWANCES TO CUSTODIANS OF SERVICEMEN'S MINOR CHILDREN SHOULD BE CONTINUED WHERE IT REASONABLY APPEARS THAT THE FIDUCIARY ACTED IN GOOD FAITH IN RECEIVING SUCH PAYMENTS AND WAIVER ACTION IS OTHERWISE PROPER, AND THE WAIVER COMMITTEE OF THE GENERAL ACCOUNTING OFFICE WILL ACT ON SUCH RECOMMENDATIONS IN ORDER TO MAKE FINAL DISPOSITION OF SUCH CASES.

ASSISTANT COMPTROLLER GENERAL WEITZEL TO THE SECRETARY OF DEFENSE, JANUARY 27, 1954:

IT HAS COME TO ATTENTION THAT SOME OF THE POLICIES OF THE DEPARTMENT OF THE ARMY--- AND POSSIBLY OF THE OTHER MILITARY SERVICES--- WITH RESPECT TO COLLECTION OF ERRONEOUS PAYMENTS OF VOLUNTARY ALLOTMENTS AND FAMILY ALLOWANCES MAY BE AT VARIANCE WITH THOSE NOW BEING FOLLOWED BY THIS OFFICE, AND SINCE IT APPEARS THAT THE ADMINISTRATIVE POLICIES ARE BASED, TO SOME EXTENT, ON A DECISION OF THIS OFFICE DATED MARCH 4, 1947, B-61739, IT IS BELIEVED THAT A STATEMENT OF GENERAL PRINCIPLES NOW BEING APPLIED BY THIS OFFICE WOULD BE OF ASSISTANCE TO THE MILITARY DEPARTMENTS IN THE ADMINISTRATIVE HANDLING OF SUCH CASES.

AS A GENERAL RULE, LEGAL LIABILITY RESTS SOLELY ON THE PAYEES OF VOLUNTARY ALLOTMENTS OF PAY AND THE RECIPIENTS OF FAMILY ALLOWANCE PAYMENTS TO REFUND TO THE UNITED STATES OVERPAYMENTS RECEIVED BY THEM. CF. 26 COMP. DEC. 1085. SEE ALSO MELVILLE V. UNITED STATES, 23 C.1CLS. 74. IT SEEMS CLEAR, HOWEVER, THAT IF ERRONEOUS PAYMENTS ARE MADE AS A RESULT OF THE SERVICEMAN'S FRAUD, MISREPRESENTATION OR MISTAKE, HE IS JOINTLY LIABLE WITH THE PAYEE TO REFUND SUCH PAYMENTS. (OF COURSE AN ALLOTMENT IS NOT DEEMED ERRONEOUSLY PAID OR OVERPAID WHERE A VOLUNTARY REQUEST FOR DISCONTINUANCE IS RECEIVED TOO LATE TO STOP PAYMENT AS EARLY AS REQUESTED AND THE REGULATIONS PROVIDE FOR AN ADJUSTMENT IN THE ALLOTTER'S PAY ACCOUNT IN SUCH CIRCUMSTANCES ON ACCOUNT OF SUBSEQUENT PAYMENTS.)

SOME JUDICIAL SUPPORT HAS BEEN FOUND FOR THE PROPOSITION THAT A DISCHARGED SERVICE MEMBER MAY BE HELD LIABLE FOR ERRONEOUS PAYMENTS MADE TO HIS WIFE AFTER HIS SEPARATION IF HE IS AT FAULT AND PARTICIPATED IN THE PROCEEDS OR RECEIVED SUBSTANTIAL BENEFITS THEREFROM. MANCHESTER V. BURNS, 45 N.H. 482. WHILE IT WAS STATED IN THE DECISION OF MARCH 4, 1947, THAT THE BURDEN SHOULD BE ON THE FORMER MEMBER TO SHOW THAT HE RECEIVED NO BENEFIT FROM ERRONEOUS PAYMENTS MADE BY THE GOVERNMENT TO HIS DEPENDENTS, IT HAS SINCE BEEN CONCLUDED, IN VIEW OF THE LACK OF CLEAR JUDICIAL PRECEDENTS IN THE MATTER AND THE CONSEQUENT DOUBT AS TO THE EXTENT TO WHICH THE COURTS WOULD HOLD THE MEMBER LIABLE IN SUCH CASES, THAT NO ACTION SHOULD BE TAKEN TO DEMAND OR COLLECT FROM THE FORMER MEMBER ANY OVERPAYMENTS MADE TO HIS DEPENDENTS FOR PERIODS AFTER HIS SEPARATION, EXCEPT WHERE SUCH PAYMENTS WERE MADE TO HIS WIFE OR TO OR ON BEHALF OF HIS MINOR CHILDREN. AND NOT THEN IN ANY CASE WHERE THE RECORD SHOWS SUBSTANTIAL EXTENUATING CIRCUMSTANCES IN HIS FAVOR, OR WHEN THE TOTAL AMOUNT INVOLVED IS LESS THAN $200, OR WHERE THE ERRONEOUS PAYMENTS WERE NOT CONTINUED FOR A PERIOD OF MORE THAN THREE MONTHS AFTER HIS DISCHARGE OR RELEASE FROM ACTIVE DUTY. FOR SHORTER PERIODS, THE PAYMENTS MIGHT HAVE BEEN SUPPOSED TO RELATE TO THE HUSBAND'S ACTIVE SERVICE SO AS NOT TO RAISE A CLEAR PRESUMPTION OF NOTICE OR KNOWLEDGE OF THE ERROR. SEE B-101597, JUNE 5, 1951. RECEIPT OF ERRONEOUS PAYMENTS FOR LONGER PERIODS AFTER SEPARATION WOULD GENERALLY APPEAR SUFFICIENT TO RAISE A PRESUMPTION OF NOTICE OR KNOWLEDGE OF THE ERRONEOUS PAYMENT ON THE PART OF THE HUSBAND OR FATHER AND OF HIS PARTICIPATION IN THE PROCEEDS OR ACCEPTANCE OF SUBSTANTIAL BENEFITS THEREFROM, IN THE ABSENCE OF EVIDENCE THAT HE WAS NOT LIVING WITH HIS WIFE OR CHILDREN DURING SUCH PERIOD. NO SUCH ACTIONABLE PRESUMPTIONS WOULD GENERALLY APPEAR TO ARISE IN CASES OF OVERPAYMENTS AFTER A MEMBER'S SEPARATION TO HIS PARENT'S OR COLLATERAL RELATIVES, THERE NOT BEING THE SAME CLOSE COMMUNITY OF INTERESTS, LEGAL OBLIGATION OF SUPPORT AND LIKELIHOOD OF JOINT KNOWLEDGE ACTION AND PARTICIPATION. THAT BASIS, THE FORMER MEMBER IS NOT REGARDED AS JOINTLY LIABLE WITH THE PAYEE TO REFUND OVERPAYMENTS IN THAT CLASS OF CASES AND COLLECTION ACTION IS CONFINED TO THE PAYEE.

AS TO FAMILY ALLOWANCE PAYMENTS FOR THE PERIOD OF AN ENLISTED MAN'S SERVICE, IT MAY BE POINTED OUT THAT SINCE SECTIONS 106 AND 107 OF THE SERVICEMEN'S DEPENDENTS ALLOWANCE ACT OF 1942, 56 STAT. 381, AS AMENDED, 37 U.S.C. 206, 207, AUTHORIZED SUCH PAYMENTS BY THE DISBURSING OFFICER UNTIL HE RECEIVED NOTICE OF A CHANGE OF STATUS TERMINATING THE FAMILY ALLOWANCE (ALTHOUGH TERMINATING ,ENTITLEMENT" AT THE END OF THE MONTH IN WHICH THE CHANGE OCCURRED) AND REQUIRED DEDUCTIONS FROM THE ENLISTED MAN'S PAY FOR EACH MONTH THE ALLOWANCE WAS PAID, THE ENLISTED MAN WOULD BE JOINTLY LIABLE WITH THE RECIPIENT FOR THE AMOUNT OF ANY SUCH DEDUCTION NOT MADE FOR ANY INTERVENING MONTHS BETWEEN THE CHANGE OF STATUS AND THE DATE THE DISBURSING OFFICER RECEIVE NOTICE, WHILE HE REMAINED IN ACTIVE SERVICE, BUT WOULD NOT BE LIABLE FOR THE AMOUNT OF THE GOVERNMENT'S CONTRIBUTION TO SUCH FAMILY ALLOWANCE PAYMENTS FOR SUCH INTERVENING MONTHS, UNLESS HE WAS AT FAULT. (AN EXAMPLE OF THE LATTER EXCEPTION WOULD BE A CASE WHERE THE ENLISTED MAN FAILED TO NOTIFY THE DISBURSING OFFICER OF CHANGE OF STATUS, KNOWN TO HIM, EFFECTED BY A DIVORCE DECREE.) WOULD NOT BE LIABLE, ORDINARILY, FOR ANY PART OF THE FAMILY ALLOWANCE PAID FOR MONTHS SUBSEQUENT TO THE MONTH IN WHICH THE DISBURSING OFFICER RECEIVED NOTICE OF THE CHANGED STATUS, NOR WOULD HE BE LIABLE FOR MONTHS SUBSEQUENT TO HIS DISCHARGE OR RELEASE FROM ACTIVE DUTY (EXCEPT FOR PAYMENTS TO HIS WIFE OR MINOR CHILD UNDER THE RULES APPLIED TO THESE CASES), SINCE HE WOULD NOT BE RESPONSIBLE FOR THE FAILURE OF THE DISBURSING OFFICER TO RECEIVE OR ACT UPON NOTICE OF SUCH DISCHARGE OR RELEASE. ON THE OTHER HAND, SINCE THE LAW ALSO PROVIDED THAT THE DEPENDENT'S "ENTITLEMENT" SHOULD CEASE WITH THE MONTH IN WHICH THE CHANGE OF STATUS OCCURRED, THE DEPENDENT WOULD BE INDIVIDUALLY LIABLE FOR THE AMOUNT OF THE GOVERNMENT'S CONTRIBUTION TO ANY FAMILY ALLOWANCE PAYMENTS FOR ANY INTERVENING MONTHS BEFORE THE DISBURSING OFFICER RECEIVED NOTICE AND WOULD BE JOINTLY LIABLE WITH THE ENLISTED MAN FOR THAT PART OF SUCH PAYMENTS WHICH REPRESENTED HIS CONTRIBUTION AND WHICH WAS NOT DEDUCTED FROM HIS PAY FOR SUCH MONTHS.

WHERE A REFUND OF ERRONEOUS PAYMENTS TO A WIFE OR DEPENDENT HAS BEEN RECEIVED FROM THE MAN CONCERNED WHO WAS NOT LEGALLY LIABLE THEREFOR, AS A RESULT OF PRIOR DEMANDS OR COLLECTION ACTION, SUCH PAYMENTS HAVE BEEN TREATED AS VOLUNTARY PAYMENTS ON A MORAL OBLIGATION. HOWEVER, IF THE RECORD SHOWS THAT PAYMENTS OF THIS TYPE WERE NOT VOLUNTARY, THIS OFFICE HAS ALLOWED CLAIMS FOR THEIR REFUND.

TO THE EXTENT THAT B-61739, MARCH 4, 1947, OR OTHER PRIOR DECISIONS ARE IN CONFLICT WITH THE VIEW EXPRESSED HEREIN, THEY NO LONGER WILL BE FOLLOWED.

A NUMBER OF CASES HAVE BEEN FORWARDED TO THIS OFFICE BY THE ADMINISTRATIVE DEPARTMENTS CONCERNED, INVOLVING NONDEDUCTION OF THE SERVICEMAN'S CONTRIBUTION TO THE FAMILY ALLOWANCE LEGALLY PAID TO HIS DEPENDENTS, IN EACH OF WHICH IT WAS RECOMMENDED THAT COLLECTION BE WAIVED AGAINST THE ENLISTED MAN OR FORMER ENLISTED MAN UNDER THE PROVISIONS OF SECTION 13 OF THE DEPENDENTS ASSISTANCE ACT OF 1950, 64 STAT. 797. ATTENTION IS INVITED TO THE FACT THAT THE WAIVER AUTHORITY CONFERRED ON THE COMPTROLLER GENERAL UNDER SAID SECTION 13 IS LIMITED TO "INDEBTEDNESSES GROWING OUT OF ERRONEOUS PAYMENTS OF ALLOWANCES UNDER THE AUTHORITY OF THE SERVICEMEN'S DEPENDENTS ALLOWANCE ACT OF 1942, AS AMENDED.' SINCE IN SUCH CASES THE FAMILY ALLOWANCE PAYMENTS WERE LEGAL AND PROPER, THERE WERE NO "ERRONEOUS PAYMENTS" OF FAMILY ALLOWANCES AND THE FAILURE TO DEDUCT THE SERVICEMAN'S CONTRIBUTION FROM HIS PAY RESULTED ONLY IN AN OVERPAYMENT OF PAY TO HIM. THIS OFFICE HAS NO AUTHORITY UNDER THE 1950 ACT TO WAIVE THE INDEBTEDNESS ARISING OUT OF SUCH OVERPAYMENTS.

THE GENERAL RULES BEING APPLIED BY THIS OFFICE MAY BE SUMMARIZED AS FOLLOWS:

1. WHERE AN ALLOTMENT OR FAMILY ALLOWANCE HAS BEEN PROPERLY PAID BUT THERE HAS BEEN A FAILURE TO MAKE THE REQUIRED DEDUCTIONS FROM THE MEMBER'S PAY, THE MEMBER HAS BEEN OVERPAID IN HIS PAY ACCOUNT AND IS LEGALLY LIABLE TO REFUND SUCH OVERPAYMENT, BUT THE PAYEE OR RECIPIENT OF THE ALLOTMENT OR FAMILY ALLOWANCE IS NOT LIABLE.

2. WHERE AN ALLOTMENT OR FAMILY ALLOWANCE HAS BEEN ERRONEOUSLY PAID OR OVERPAID (EITHER DURING A MEMBER'S SERVICE OR AFTER SEPARATION) AND THE SERVICE MEMBER WAS NOT AT FAULT, THE PAYEE OR RECIPIENT IS LEGALLY LIABLE TO REFUND THE OVERPAYMENT, BUT THE MEMBER IS NOT LIABLE, EXCEPT FOR ANY REQUIRED FAMILY ALLOWANCE DEDUCTIONS NOT MADE FROM HIS PAY DURING HIS ACTIVE SERVICE.

3. WHERE AN ALLOTMENT OR FAMILY ALLOWANCE HAS BEEN ERRONEOUSLY PAID OR OVERPAID AND THE MEMBER WAS AT FAULT, THE MEMBER AND THE PAYEE ARE JOINTLY AND SEVERALLY LIABLE TO REPAY THE AMOUNT, AND COLLECTION MAY BE MADE WHOLLY FROM EITHER OR PARTLY FROM EACH.

4. THE MEMBER IS REGARDED AS AT FAULT AND, HENCE, JOINTLY LIABLE UNDER "3" ABOVE, WHERE ERRONEOUS FAMILY ALLOWANCE PAYMENTS FOR PERIODS PRIOR TO HIS SEPARATION RESULTED FROM HIS FRAUD, MISREPRESENTATION, NEGLIGENCE, OR MISTAKES FOR WHICH HE WAS RESPONSIBLE, OR FROM HIS FAILURE TO GIVE THE GOVERNMENT TIMELY NOTICE OF CHANGED CONDITIONS KNOWN TO HIM (SUCH AS DEATH OR DIVORCE OF A DEPENDENT, ETC.) AFFECTING THE ALLOWANCE.

5. THE MEMBER IS GENERALLY REGARDED AS NOT AT FAULT FOR ANY ERRONEOUS PAYMENTS MADE FOR PERIODS AFTER HIS SEPARATION. HENCE, UNDER "2" ABOVE, THE PAYEE AND NOT THE MEMBER IS LIABLE TO REFUND SUCH PAYMENTS MADE FOR PERIODS BEYOND HIS SEPARATION, THOUGH THEY MAY BE JOINTLY LIABLE UNDER "3" AND "4" FOR PAYMENTS MADE FOR PERIODS PRIOR TO SEPARATION.

6. AS AN EXCEPTION TO "5," THIS OFFICE HAS TREATED THE MEMBER AND PAYEE AS JOINTLY LIABLE IN CERTAIN CASES OF ERRONEOUSLY CONTINUED PAYMENTS AFTER SEPARATION WHERE THE CONDITIONS ARE VIEWED AS HAVING CAST ON THE MEMBER AN AFFIRMATIVE DUTY TO NOTIFY THE GOVERNMENT AND AS RAISING A PRESUMPTION THAT HE DIRECTLY PARTICIPATED IN THE PROCEEDS. AS MINIMUM REQUIREMENTS FOR RAISING SUCH A CHARGE OF JOINT LIABILITY AGAINST THE MEMBER, THIS OFFICE HAS APPLIED THE FOLLOWING CONDITIONS, ALL OF WHICH MUST BE PRESENT:

(A) THE PAYMENTS WERE MADE TO HIS WIFE OR UNMARRIED MINOR CHILD.

(B) NOTHING APPEARS TO REBUT THE PRESUMPTION THAT HE RETURNED HOME AFTER SEPARATION AND WAS LIVING WITH THE WIFE OR CHILD AND KNEW OF THE OVERPAYMENTS.

(C) THE OVERPAYMENTS CONTINUED FOR MORE THAN THREE MONTHS AFTER SEPARATION AND THE TOTAL AMOUNT OVERPAID AFTER SEPARATION WAS AT LEAST $200.

7. THIS OFFICE HAS AUTHORITY TO WAIVE INDEBTEDNESSES GROWING OUT OF "ERRONEOUS PAYMENTS OF (FAMILY) ALLOWANCES.'

(A) WHERE THE FAMILY ALLOWANCE HAS BEEN PROPERLY PAID, AS IN "1," ABOVE, THERE HAS BEEN NO ERRONEOUS PAYMENT OF FAMILY ALLOWANCES AND, HENCE, NO INDEBTEDNESS ON THAT ACCOUNT TO BE WAIVED BY THIS OFFICE. THE DEBT OF THE MEMBER BECAUSE REQUIRED DEDUCTIONS WERE NOT MADE FROM HIS PAY IS A DEBT IN HIS PAY ACCOUNT (NOT GROWING OUT OF ERRONEOUS PAYMENT OF FAMILY ALLOWANCES) AND MAY NOT BE WAIVED.

(B) WHERE FAMILY ALLOWANCE HAS BEEN ERRONEOUSLY PAID OR OVERPAID AND THE MEMBER IS JOINTLY LIABLE FOR ALL OR PART OF THE DEBT, AS HE MAY BE UNDER "2," "3," OR "6," ABOVE, SUCH INDEBTEDNESS AS TO BOTH IS REGARDED AS GROWING OUT OF ERRONEOUS PAYMENTS OF FAMILY ALLOWANCES WITHIN THE MEANING OF THE STATUTE AND, IN OTHERWISE PROPER CASES, MAY BE WAIVED AS TO BOTH THE RECIPIENT AND THE MEMBER.

IT IS UNDERSTOOD THAT IN CERTAIN CASES WHERE ADMINISTRATIVE RECOMMENDATIONS WERE MADE UNDER SECTION 13 OF THE DEPENDENTS ASSISTANCE ACT OF 1950 FOR WAIVER OF RECOVERY OF ERRONEOUS PAYMENTS OF FAMILY ALLOWANCES TO CUSTODIANS OF MINOR CHILDREN, THE WAIVER COMMITTEE OF THIS OFFICE HAS INDICATED THAT THE CUSTODIAN IS NOT LIABLE AND THEREFORE THAT WAIVER ACTION AS TO SUCH PERSON IS NOT APPROPRIATE. THAT ACTION WAS PREDICATED ON THE PRINCIPLE THAT RECOVERY MAY NOT BE HAD FROM A PERSON KNOWN TO ACT ONLY IN A REPRESENTATIVE CAPACITY IF HE HAS PAID THE MONEY OVER TO HIS PRINCIPAL OR PROPERLY APPLIED IT FOR THE PURPOSE RECEIVED BEFORE NOTICE AND IF THE LOSS WOULD FALL ON HIM. 70 C.J.S. 372, PAYMENT, SECTION 157E; 2 AM. JUR. 264, AGENCY, SECTION 335; RESTATEMENT, RESTITUTION, SECTION 143. IT IS RECOGNIZED, HOWEVER, THAT DUE TO THE DIVERSITY OF CIRCUMSTANCES AND INCOMPLETENESS OF THE RECORDS, NONLIABILITY CANNOT BE AFFIRMATIVELY ESTABLISHED WITH CERTAINTY IN MOST CASES. HENCE, WHERE IT REASONABLY APPEARS THAT THE FIDUCIARY ACTED IN GOOD FAITH IN RECEIVING THE ERRONEOUS PAYMENTS AND WAIVER ACTION IS OTHERWISE PROPER, THE ADMINISTRATIVE PRACTICE OF RECOMMENDING WAIVER OF THE INDEBTEDNESS SHOULD BE CONTINUED AND THE WAIVER COMMITTEE OF THIS OFFICE WILL ACT ON SUCH RECOMMENDATIONS IN ORDER TO MAKE FINAL DISPOSITION OF THE CASES, WHERE OTHERWISE APPROPRIATE.