B-124559, AUG. 17, 1955

B-124559: Aug 17, 1955

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USNR: REFERENCE IS MADE TO YOUR LETTER OF JUNE 8. REPRESENTING PAY AND ALLOWANCES FOR 57 DAYS OF UNUSED ACCRUED LEAVE WHICH WAS WITHHELD UNDER SECTION 1766. YOUR CLAIM IS BASED ON THE VIEW THAT SECTION 7 OF THE ARMED FORCES LEAVE ACT OF 1946 EXEMPTS LUMP-SUM TERMINAL LEAVE PAYMENTS FROM BEING WITHHELD UNDER SECTION 1766. THAT THEREFORE YOU ARE ENTITLED TO PAYMENT FOR YOUR UNUSED ACCRUED LEAVE UNDER THAT ACT. WAS APPROVED AUGUST 9. WAS APPLICABLE TO OFFICERS. SUCH LEAVE WAS TO BE COMPENSATED FOR UNDER SECTION 6 OF THE ACT. WAS FIRST AUTHORIZED BY A PROVISION IN SECTION 1 OF THE ACT OF AUGUST 4. HENCE WAS NOT AFFECTED BY THE PROVISIONS OF SECTION 7. THE AMOUNT FOUND DUE YOU UNDER SECTION 4 (C) WAS AVAILABLE AS AN OFFSET AGAINST YOUR INDEBTEDNESS TO THE UNITED STATES.

B-124559, AUG. 17, 1955

TO COMMANDER STEWART L. SMITH, USNR:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 8, 1955, REQUESTING REVIEW OF SETTLEMENT DATED MAY 31, 1955, WHICH DISALLOWED YOUR CLAIM FOR $1,308.26, REPRESENTING PAY AND ALLOWANCES FOR 57 DAYS OF UNUSED ACCRUED LEAVE WHICH WAS WITHHELD UNDER SECTION 1766, REVISED STATUTES, UPON YOUR RELEASE FROM ACTIVE DUTY TO PARTIALLY OFFSET A SHORTAGE IN YOUR DISBURSING ACCOUNTS, SYMBOL NO. 59-884.

YOUR CLAIM IS BASED ON THE VIEW THAT SECTION 7 OF THE ARMED FORCES LEAVE ACT OF 1946 EXEMPTS LUMP-SUM TERMINAL LEAVE PAYMENTS FROM BEING WITHHELD UNDER SECTION 1766, REVISED STATUTES, AND THAT THEREFORE YOU ARE ENTITLED TO PAYMENT FOR YOUR UNUSED ACCRUED LEAVE UNDER THAT ACT.

THE ARMED FORCES LEAVE ACT OF 1946, 60 STAT. 963, WAS APPROVED AUGUST 9, 1946, AND WAS APPLICABLE TO OFFICERS, WARRANT OFFICERS AND ENLISTED PERSONS. AMONG ITS OTHER PROVISIONS IT AUTHORIZED COMPENSATION IN THE CASES OF COMMISSIONED OFFICERS FOR UNUSED LEAVE IN EXCESS OF 60 DAYS (BUT NOT EXCEEDING 120 DAYS) THAT THEY HAD TO THEIR CREDIT ON AUGUST 31, 1946. SUCH LEAVE WAS TO BE COMPENSATED FOR UNDER SECTION 6 OF THE ACT, WHICH PROVIDED FOR SETTLEMENT AND COMPENSATION IN CASH IN CERTAIN INSTANCES AND IN OTHER INSTANCES FOR SETTLEMENT IN BONDS OF THE UNITED STATES TO THE HIGHEST MULTIPLE OF $25 AND IN CASH TO THE FULL AMOUNT OF ANY DIFFERENCE. SECTION 7 OF THE ACT PROVIDED:

"ALL AMOUNTS PAID OR PAYABLE UNDER SECTION 6 OF THIS ACT, IN CASH, BONDS, OR BOTH, SHALL NOT BE ASSIGNABLE EXCEPT AS PROVIDED IN SUBSECTION (D) OF SUCH SECTION, SHALL BE EXEMPT FROM CLAIMS OF CREDITORS, INCLUDING ANY CLAIM OF THE UNITED STATES, AND SHALL NOT BE SUBJECT TO ATTACHMENT, LEVY, OR SEIZURE BY OR UNDER ANY LEGAL OR EQUITABLE PROCESS WHATEVER. ALL SUCH AMOUNTS (EXCEPT INTEREST IN THE CASE OF BONDS) SHALL BE EXEMPT FROM TAXATION.'

PAYMENT FOR UNUSED LEAVE TO A MEMBER'S CREDIT UPON DISCHARGE AFTER AUGUST 31, 1946, WAS FIRST AUTHORIZED BY A PROVISION IN SECTION 1 OF THE ACT OF AUGUST 4, 1947, 61 STAT. 748, AMENDING SECTION 4 OF THE 1946 ACT, PROVIDING AS FOLLOWS:

"/C) ANY MEMBER OF THE ARMED FORCES DISCHARGED AFTER AUGUST 31, 1946, HAVING UNUSED ACCRUED LEAVE STANDING TO HIS CREDIT AT TIME OF DISCHARGE SHALL BE COMPENSATED FOR SUCH UNUSED LEAVE IN CASH ON THE BASIS OF THE BASE AND LONGEVITY PAY, AND ALLOWANCES, APPLICABLE TO SUCH MEMBER ON THE DATE OF DISCHARGE INCLUDING FOR ENLISTED PERSONS THE ALLOWANCES AS PROVIDED FOR SUCH ENLISTED PERSONS IN SUBSECTION (A) OF THIS SECTION: PROVIDED, THAT NO CASH SETTLEMENT SHALL BE MADE TO ANY MEMBER (1) DISCHARGED FOR THE PURPOSE OF ACCEPTING A COMMISSION OR WARRANT OR ENTERING INTO AN ENLISTMENT IN HIS RESPECTIVE BRANCH OF THE ARMED FORCES, OR (2) ELECTING TO CARRY OVER SUCH UNUSED LEAVE TO A NEW ENLISTMENT IN HIS RESPECTIVE BRANCH OF THE ARMED FORCES, ON THE DAY FOLLOWING DATE OF DISCHARGE. A MEMBER EXCLUDED FROM CASH SETTLEMENT BY THE FOREGOING PROVISION AND A MEMBER REVERTING FROM WARRANT OR COMMISSIONED OFFICER TO ENLISTED STATUS SHALL CARRY ANY UNUSED ACCRUED LEAVE STANDING TO HIS CREDIT FROM ONE STATUS TO ANOTHER WITHIN HIS RESPECTIVE BRANCH OF THE ARMED FORCES. UNUSED LEAVE SETTLED AND COMPENSATED FOR IN CASH IN ACCORDANCE WITH THIS SUBSECTION SHALL NOT BE CONSIDERED AS SERVICE FOR ANY PURPOSE. SETTLEMENT AND COMPENSATION IN ACCORDANCE WITH THIS SUBSECTION SHALL BE MADE ONLY TO A LIVING MEMBER OR LIVING FORMER MEMBER OF THE ARMED RCES.'

THE PROVISIONS OF SECTION 7 APPLIED ONLY TO SETTLEMENTS MADE UNDER SECTION 6 OF THE ACT. ANY RIGHT YOU HAD TO PAY FOR ACCRUED LEAVE AT THE TIME OF YOUR RELEASE TO INACTIVE DUTY ON NOVEMBER 19, 1954, AROSE UNDER SECTION 4 (C) OF THE ACT, AS AMENDED, AND HENCE WAS NOT AFFECTED BY THE PROVISIONS OF SECTION 7. THE AMOUNT FOUND DUE YOU UNDER SECTION 4 (C) WAS AVAILABLE AS AN OFFSET AGAINST YOUR INDEBTEDNESS TO THE UNITED STATES.

THE DISALLOWANCE OF YOUR CLAIM WAS CORRECT AND IS SUSTAINED.

THE REFERENCE IN THE SETTLEMENT OF MAY 31, 1955, TO THE ACT OF JULY 15, 1954, 68 STAT. 482, WAS INCIDENTAL AND THE DISALLOWANCE OF YOUR CLAIM WAS NOT BASED ON THAT ACT.