B-132293, AUG. 26, 1957

B-132293: Aug 26, 1957

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TO THE SECRETARY OF DEFENSE: FURTHER REFERENCE IS MADE TO LETTER DATED JUNE 19. FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING A DECISION ON CERTAIN QUESTIONS WHICH HAVE ARISEN IN CONNECTION WITH THE IMPLEMENTATION OF SECTION 265 OF THE ARMED FORCES RESERVE ACT OF JULY 9. THE QUESTIONS AND A DISCUSSION OF THE MATTER ARE SET FORTH IN COMMITTEE ACTION NO. 174 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE. AS FOLLOWS: "A MEMBER OF A RESERVE COMPONENT WHO IS INVOLUNTARILY RELEASED FROM ACTIVE DUTY AFTER THE ENACTMENT OF THIS SECTION AND AFTER HAVING COMPLETED IMMEDIATELY PRIOR TO SUCH RELEASE AT LEAST FIVE YEARS OF CONTINUOUS ACTIVE DUTY. IS ENTITLED TO A LUMP-SUM READJUSTMENT PAYMENT COMPUTED ON THE BASIS OF ONE-HALF OF ONE MONTH'S BASIC PAY IN THE GRADE IN WHICH HE IS SERVING AT THE TIME OF RELEASE FROM ACTIVE DUTY FOR EACH YEAR OF ACTIVE SERVICE ENDING AT THE CLOSE OF THE EIGHTEENTH YEAR.

B-132293, AUG. 26, 1957

TO THE SECRETARY OF DEFENSE:

FURTHER REFERENCE IS MADE TO LETTER DATED JUNE 19, 1957, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING A DECISION ON CERTAIN QUESTIONS WHICH HAVE ARISEN IN CONNECTION WITH THE IMPLEMENTATION OF SECTION 265 OF THE ARMED FORCES RESERVE ACT OF JULY 9, 1956. THE QUESTIONS AND A DISCUSSION OF THE MATTER ARE SET FORTH IN COMMITTEE ACTION NO. 174 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE.

SECTION 265 OF THE ARMED FORCES RESERVE ACT OF 1952, AS ADDED BY THE ACT OF JULY 9, 1956, PUBLIC LAW 676, 70 STAT. 517, 50 U.S.C. 1016 (A), PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"A MEMBER OF A RESERVE COMPONENT WHO IS INVOLUNTARILY RELEASED FROM ACTIVE DUTY AFTER THE ENACTMENT OF THIS SECTION AND AFTER HAVING COMPLETED IMMEDIATELY PRIOR TO SUCH RELEASE AT LEAST FIVE YEARS OF CONTINUOUS ACTIVE DUTY, EXCEPT FOR BREAKS IN SERVICE OF NOT MORE THAN THIRTY DAYS, AS EITHER AN OFFICER, WARRANT OFFICER, OR ENLISTED PERSON, IS ENTITLED TO A LUMP-SUM READJUSTMENT PAYMENT COMPUTED ON THE BASIS OF ONE-HALF OF ONE MONTH'S BASIC PAY IN THE GRADE IN WHICH HE IS SERVING AT THE TIME OF RELEASE FROM ACTIVE DUTY FOR EACH YEAR OF ACTIVE SERVICE ENDING AT THE CLOSE OF THE EIGHTEENTH YEAR. FOR THE PURPOSES OF COMPUTING THE AMOUNT OF READJUSTMENT PAYMENT (1) A PART OF A YEAR THAT IS SIX MONTHS OR MORE IS COUNTED AS A WHOLE YEAR, AND A PART OF A YEAR THAT IS LESS THAN SIX MONTHS IS DISREGARDED, AND (2) ANY PRIOR PERIOD FOR WHICH SEVERANCE PAY HAS BEEN RECEIVED UNDER ANY OTHER PROVISION OF LAW SHALL BE EXCLUDED.'

THE QUESTION PRESENTED ON WHICH A DECISION IS REQUESTED IS AS FOLLOWS:

"IN THOSE INSTANCES WHEREIN A MEMBER HAS PREVIOUSLY RECEIVED THE RESERVE OFFICERS LUMP-SUM PAYMENT, UNDER SECTION 2 OF THE ACT OF 16 JUNE 1936, AS AMENDED, 10 U.S.C. (1952 EDITION) 300A, OR SECTION 12 OF THE ACT OF 4 AUGUST 1942, OR AMENDED, 34 U.S.C. 850K, AND THE RULING CONTAINED IN THE ANSWER TO QUESTION NO. 5 OF 36 COMP. GEN. 129 IS FOR APPLICATION IN THE COMPUTATION OF THE LUMP-SUM READJUSTMENT PAYMENT UNDER SECTION 265 OF THE ARMED FORCES RESERVE ACT OF 1952, AS ADDED BY THE ACT OF 9 JULY 1956, PUBLIC LAW 676, 84TH CONGRESS, SHOULD THE ENTIRE PERIOD OF ACTIVE DUTY, TO INCLUDE THE DATE OF RELEASE, DURING WHICH THE MEMBER QUALIFIED FOR THE RESERVE OFFICERS LUMP-SUM PAYMENT BE EXCLUDED OR SHOULD ONLY THE ACTUAL PERIOD UPON WHICH THE RESERVE OFFICERS LUMP-SUM PAYMENT WAS COMPUTED BE EXCLUDED?

IN ANSWER TO QUESTION 5 IN OUR DECISION OF AUGUST 17, 1956, 36 COMP. GEN. 129, 133, WE HELD THAT ANY PERIOD FOR WHICH ANY TYPE OF SEVERANCE PAY, SEPARATION PAY, OR RELEASE FROM ACTIVE DUTY PAY HAS BEEN RECEIVED MUST BE EXCLUDED IN THE COMPUTATION OF THE READJUSTMENT PAY AUTHORIZED BY SECTION 265 (A) OF THE 1956 ACT.

UNDER THE PROVISIONS OF SECTION 2 OF THE ACT OF JUNE 16, 1936, AND SECTION 12 OF THE ACT OF AUGUST 4, 1942, CITED ABOVE, THE RESERVE OFFICER'S LUMP-SUM PAYMENT ACCRUES ONLY UPON RELEASE FROM ACTIVE DUTY. SECTION 1 OF THE ACT OF APRIL 28, 1950, 10 U.S.C. 300B, 1952 ED., AND 34 U.S.C. 850K-1, PROVIDES THAT NO FURTHER CREDIT SHALL BE ALLOWED IN COMPUTING LUMP-SUM PAYMENTS UNDER THOSE STATUTES FOR ANY PERIOD OF ACTIVE SERVICE PERFORMED AFTER JUNE 24, 1948. THE QUESTION FOR DETERMINATION HERE IS WHETHER THE ENTIRE PERIOD OF ACTIVE DUTY UP TO AND INCLUDING THE DATE OF RELEASE FROM ACTIVE DUTY MUST BE EXCLUDED IN THE COMPUTATION OF THE READJUSTMENT PAYMENT OR WHETHER ONLY THE ACTUAL PERIOD UPON WHICH THE RESERVE OFFICER'S LUMP-SUM PAYMENT WAS COMPUTED NEED BE EXCLUDED. THE EXAMPLE SET FORTH IN THE DISCUSSION IN COMMITTEE ACTION NO. 174 IS THAT OF A MEMBER OF A RESERVE COMPONENT WHO SERVED ON EXTENDED ACTIVE DUTY IN AN ENLISTED STATUS FROM SEPTEMBER 1, 1939, THROUGH JUNE 30, 1942; IN A RESERVE OFFICER STATUS FROM JULY 1, 1942, THROUGH JUNE 30, 1952, AND IN THE LATTER STATUS FROM JULY 16, 1952, THROUGH NOVEMBER 5, 1956, WHEN HE WAS INVOLUNTARILY RELEASED FROM ACTIVE DUTY. UPON HIS RELEASE FROM ACTIVE DUTY ON JUNE 30, 1952, THE OFFICER RECEIVED THE LUMP-SUM PAYMENT FOR THE PERIOD JULY 1, 1942, THROUGH JUNE 24, 1948. IN VIEW OF THE EXPRESS PROVISION IN SECTION 265 (A) (2), AS ADDED BY THE 1956 ACT, THAT FOR THE PURPOSE OF COMPUTING THE AMOUNT OF READJUSTMENT PAY "ANY PRIOR PERIOD FOR WHICH SEVERANCE PAY HAS BEEN RECEIVED UNDER ANY OTHER PROVISION OF LAW SHALL BE EXCLUDED," AND IN VIEW OF THE FACT THAT THE LUMP-SUM PAYMENT IS AUTHORIZED AND COMPUTED FOR ONLY A PARTICULAR PERIOD OF SERVICE, WE CONCLUDE THAT, IN THE COMPUTATION OF THE READJUSTMENT PAY, ONLY THE ACTUAL PERIOD UPON WHICH THE RESERVE OFFICER'S LUMP-SUM PAYMENT WAS COMPUTED NEED BE EXCLUDED. HENCE, IN THE EXAMPLE GIVEN, THE PERIOD JULY 1, 1942, THROUGH JUNE 24, 1948, SHOULD NOT BE INCLUDED IN DETERMINING THE MEMBER'S RIGHTS TO READJUSTMENT PAY.

A DECISION IS ALSO REQUESTED CONCERNING THE COUNTING OF ANY PRIOR PERIOD FOR WHICH A MEMBER RECEIVED SEPARATION PAY UNDER THE PROVISIONS OF SECTION 235 (B) OF THE ARMED FORCES RESERVE ACT OF 1952. THE QUESTION PRESENTED IS AS FOLLOWS:

"SINCE THE SEPARATION PAY PROVIDED FOR BY SECTION 235 (B) IS NOT COMPUTED ON THE BASIS OF ACTIVE SERVICE PERFORMED, BUT INSTEAD IS BASED ON THE NUMBER OF YEARS (INCLUDING ANY PRO RATA PART THEREOF) REMAINING AS THE UNEXPIRED PERIOD OF THE MEMBER'S ACTIVE DUTY AGREEMENT, DECISION SHOULD ALSO BE OBTAINED AS TO WHICH OF THE FOLLOWING PERIODS SHOULD BE EXCLUDED IN COMPUTING READJUSTMENT PAY:

"/1) THE ENTIRE PERIOD OF ACTIVE DUTY PERFORMED BY THE MEMBER IMMEDIATELY PRIOR TO THE RELEASE INCIDENT TO WHICH HE RECEIVED THE SEPARATION PAY.

"/2) THE PERIOD OF ACTIVE DUTY PERFORMED UNDER HIS ACTIVE DUTY AGREEMENT.

"/3) THE UNEXPIRED PORTION OF HIS ACTIVE DUTY AGREEMENT.

"/4) THE TOTAL OF (1) AND (3).

"/5) THE TOTAL OF (2) AND (3).'

SECTION 235 (B) OF THE ARMED FORCES RESERVE ACT OF 1952, 66 STAT. 491, 50 U.S.C. 963 (B), PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"ANY MEMBER INVOLUNTARILY RELEASED FROM ACTIVE DUTY PRIOR TO THE EXPIRATION OF THE PERIOD OF SERVICE UNDER HIS AGREEMENT * * * SHALL BE ENTITLED TO RECEIVE AN AMOUNT EQUAL TO ONE MONTH'S PAY AND ALLOWANCES MULTIPLIED BY THE NUMBER OF YEARS (INCLUDING ANY PRO RATA PART THEREOF) REMAINING AS THE UNEXPIRED PERIOD OF HIS AGREEMENT FOR ACTIVE DUTY, SUCH AMOUNT TO BE IN ADDITION TO ANY PAY AND ALLOWANCES WHICH HE MAY OTHERWISE BE ENTITLED TO RECEIVE. * * *"

IN OUR DECISION OF AUGUST 17, 1956, 36 COMP. GEN. 129--- IN ANSWER TO QUESTION 5--- WE RECOGNIZED THAT SEPARATION PAY AUTHORIZED UNDER THE QUOTED SECTION 235 (B) WAS A PAYMENT WHICH MUST BE CONSIDERED "SEVERANCE PAY" WITHIN THE MEANING OF SECTION 265 (A) NOTWITHSTANDING THE FACT THAT SUCH SEPARATION PAY IS BASED ON THE UNEXPIRED PERIOD OF THE MEMBER'S AGREEMENT FOR ACTIVE DUTY RATHER THAN ON A PERIOD OF PAST SERVICE. FIND NOTHING IN THE LANGUAGE OF SECTION 265 (A), AS ADDED BY THE 1956 ACT, OR IN ITS LEGISLATIVE HISTORY, WHICH WOULD REQUIRE, IN COMPUTING READJUSTMENT PAY, THE EXCLUSION OF THE ENTIRE PERIOD OF ACTIVE DUTY PERFORMED BY THE MEMBER IMMEDIATELY PRIOR TO THE RELEASE INCIDENT TO WHICH HE RECEIVED THE SEPARATION PAY, OR THE ENTIRE PERIOD OF ACTIVE DUTY PERFORMED UNDER HIS ACTIVE DUTY AGREEMENT. UNDER THE PROVISIONS OF SECTION 235 (B) OF THE 1952 ACT SEPARATION PAY IS COMPUTED ON THE UNEXPIRED PORTION OF THE MEMBER'S ACTIVE DUTY AGREEMENT. HENCE, THE ONLY PERIOD OF TIME TO WHICH THAT PAYMENT BEARS ANY RELATIONSHIP IS THE PERIOD REMAINING IN HIS ACTIVE DUTY AGREEMENT ON THE DATE OF HIS INVOLUNTARY RELEASE FROM ACTIVE DUTY. IT IS OUR VIEW THAT UNDER THE PROVISIONS OF SECTION 265 (A) (2) OF THE 1956 ACT, THE ONLY PERIOD REQUIRED TO BE EXCLUDED IN COMPUTING THE READJUSTMENT PAYMENT IS A PERIOD EQUAL TO THE UNEXPIRED PORTION OF THE MEMBER'S ACTIVE DUTY AGREEMENT ON WHICH PAYMENT UNDER SECTION 235 (B) OF THE 1952 ACT WAS COMPUTED. THE QUESTIONS PRESENTED ARE ANSWERED ACCORDINGLY.