B-127152, JUL. 3, 1956

B-127152: Jul 3, 1956

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DAVIS: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 20. THE CIRCUMSTANCES REGARDING THE INDEBTEDNESS AS THEY APPEAR FROM OUR FILES ARE AS FOLLOWS: AS AN ENLISTED MAN. WHICH WAS EFFECTIVE JANUARY 1. YOU WERE COMMISSIONED A SECOND LIEUTENANT IN THE ARMY. THE LAST DEDUCTION FROM YOUR PAY IN YOUR ENLISTED STATUS FOR THE $3.85 PREMIUM WAS MADE THROUGH JUNE 30. THIS ALLOTMENT WAS OFFICIALLY TERMINATED UPON YOUR RELEASE FROM ACTIVE DUTY JULY 21. PAYMENTS OF THE ALLOTMENT WERE MADE TO THE VETERANS ADMINISTRATION. NO DEDUCTIONS WERE MADE FROM YOUR PAY FOR THIS ALLOTMENT. 000 WAS ISSUED TO YOU. IT IS THE ALLOTMENT FOR PREMIUMS FOR THE ADDITIONAL INSURANCE WHICH COMPRISES YOUR DEBT OF $126.40 TO THE UNITED STATES.

B-127152, JUL. 3, 1956

TO MR. PAUL G. DAVIS:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 20, 1956, REQUESTING REVIEW OF THE ACTION OF THE CLAIMS DIVISION OF OUR OFFICE IN OFFSETTING A CREDIT OF $100 DUE YOU ON YOUR CLAIM FOR UNIFORM ALLOWANCE AGAINST AN INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $126.40 FOR UNDER- DEDUCTION FOR INSURANCE PREMIUMS INCIDENT TO YOUR SERVICE IN THE ARMY OF THE UNITED STATES.

THE CIRCUMSTANCES REGARDING THE INDEBTEDNESS AS THEY APPEAR FROM OUR FILES ARE AS FOLLOWS:

AS AN ENLISTED MAN, YOU EXECUTED AN ALLOTMENT IN THE AMOUNT OF $3.85 A MONTH, EFFECTIVE DECEMBER 1, 1942, FOR PAYMENT OF PREMIUM ON A NATIONAL SERVICE LIFE INSURANCE POLICY, FACT VALUE OF $5,000, WHICH WAS EFFECTIVE JANUARY 1, 1943, THE PREMIUM BEING PAYABLE ONE MONTH IN ADVANCE. FOR THIS PREMIUM THE VETERANS ADMINISTRATION ISSUED POLICY NO. N-7980417. THEREAFTER, ON JULY 22, 1943, YOU WERE COMMISSIONED A SECOND LIEUTENANT IN THE ARMY. THE LAST DEDUCTION FROM YOUR PAY IN YOUR ENLISTED STATUS FOR THE $3.85 PREMIUM WAS MADE THROUGH JUNE 30, 1943. ON AUGUST 30, 1943, YOU EXECUTED AN AUTHORIZATION FOR THE DEDUCTION OF $3.85 MONTHLY COMMENCING JULY 1, 1943, FOR CLASS N (NATIONAL SERVICE LIFE INSURANCE) PREMIUMS. CONTRARY TO YOUR BELIEF AND CONTENTIONS, YOUR DISCHARGE AS AN ENLISTED MAN DID NOT TERMINATE THE POLICY OF INSURANCE BUT ONLY THE ALLOWMENT OF PAY FOR THE PREMIUMS, AND THE SUBSEQUENT ALLOTMENT EXECUTED ON AUGUST 30, 1943, EFFECTIVE JULY 1, 1943, CONTINUED THE POLICY IN FORCE WITHOUT A LAPSE IN PREMIUM PAYMENTS. THIS ALLOTMENT WAS OFFICIALLY TERMINATED UPON YOUR RELEASE FROM ACTIVE DUTY JULY 21, 1946. PAYMENTS OF THE ALLOTMENT WERE MADE TO THE VETERANS ADMINISTRATION.

ON JANUARY 5, 1944, YOU EXECUTED A FURTHER AUTHORIZATION FOR ALLOTMENT OF PAY FOR CLASS N INSURANCE PREMIUMS, IN THE AMOUNT OF $3.95 MONTHLY, EFFECTIVE AS OF JANUARY 1, 1944 (TWO PREMIUMS TO BE DEDUCTED FOR JANUARY 1944 IN ORDER TO PROVIDE PAYMENT FOR ONE MONTH IN ADVANCE). NO DEDUCTIONS WERE MADE FROM YOUR PAY FOR THIS ALLOTMENT, ALTHOUGH THE DEPARTMENT OF THE ARMY MADE PAYMENTS TO THE VETERANS ADMINISTRATION IN ACCORDANCE WITH YOUR DIRECTION, TO THE DATE OF YOUR RELEASE FROM ACTIVE DUTY, JULY 21, 1946. IT APPEARS FROM OUR FILE, AND THE VETERANS ADMINISTRATION HAS REPORTED, THAT A SECOND POLICY OF INSURANCE, NO. N-1517-25-64, IN THE AMOUNT OF $5,000 WAS ISSUED TO YOU, EFFECTIVE JANUARY 1, 1944, WHICH INCREASED YOUR COVERAGE TO $10,000. IT IS THE ALLOTMENT FOR PREMIUMS FOR THE ADDITIONAL INSURANCE WHICH COMPRISES YOUR DEBT OF $126.40 TO THE UNITED STATES. THE VETERANS ADMINISTRATION HAS NOW REPORTED THAT BOTH POLICIES LAPSED FOR NONPAYMENT OF PREMIUM DUE AUGUST 1, 1946, BUT THAT POLICY NO. N 7980417, WAS REINSTATED JULY 1, 1948, AND AGAIN LAPSED ON AUGUST 1, 1948. REMITTANCES PAID SUBSEQUENT TO THE DATE THE INSURANCE LAPSED, AUGUST 1, 1948, WERE REFUNDED TO YOU. IT IS ALSO REPORTED THAT YOU REQUESTED AND WERE PAID THE DIVIDENDS EARNED ON THE INSURANCE.

ON THE BASIS OF THE ABOVE, IT IS APPARENT THAT WHILE YOU HAD AUTHORIZED THE NECESSARY ALLOTMENTS OF PAY FOR THE TWO POLICIES OF INSURANCE AT $5,000 EACH, AND THAT YOU HAD COMPLETE COVERAGE BY REASON OF THE PAYMENT OF THE PREMIUMS BY THE DEPARTMENT OF THE ARMY, YOU NEGLECTED TO DEDUCT THE AMOUNT OF THE PREMIUM ON YOUR SECOND POLICY FROM JANUARY 1, 1944, THROUGH JULY 31, 1946, ON YOUR PAY VOUCHERS. TO THIS EXTENT YOU WERE OVERPAID WHILE IN THE SERVICE.

ACCORDINGLY, THE OFFSET OF THE $100 CREDIT FOR UNIFORM GRATUITY AGAINST YOUR INDEBTEDNESS TO THE UNITED STATES IS CORRECT AND, UPON REVIEW, IS SUSTAINED.