B-133071, JUN 28, 1961

B-133071, JUN 28, 1961

PRECIS-UNAVAILABLE

SECRETARY OF DEFENSE:

REFERENCE IS MADE TO OUR LETTER OF SEPTEMBER 2, 1958 (B-133071), REGARDING THE CONCURRENT PAYMENTS BY THE VETERANS ADMINISTRATION (VA) FOR COMPENSATION OR PENSION AND BY THE SERVICE DEPARTMENTS FOR MILITARY RETIREMENT. AT THAT TIME WE NOTED THAT SOME RETIRED MILITARY PERSONNEL WERE RECEIVING EXCESSIVE RETIREMENT PAYMENTS FROM THE MILITARY SERVICES PRINCIPALLY AS A RESULT OF INCOMPLETE INFORMATION FURNISHED TO THE SERVICE DEPARTMENT BY THE VA ON STATUTORY INCREASES OF COMPENSATION OR PENSION PAYMENTS. IN THAT LETTER, WE WERE INTERESTED PRIMARILY IN THE CORRECTION OF THE RECORDS AND THE DISCLOSURE OF OVERPAYMENTS AND DID NOT ATTEMPT TO COVER PROBLEMS PERTAINING TO THE COLLECTION OF OVERPAYMENTS.

SUBSEQUENTLY, THE COOPERATIVE EFFORTS OF THE AGENCIES IN RECONCILING AND CORRECTING THEIR RECORDS DISCLOSED ADDITIONAL OVERPAYMENTS RESULTING FROM OTHER SIGNIFICANT TYPES OF ERRORS. DIFFERENCES OF OPINION HAVE ARISEN BETWEEN THE AGENCIES AS TO WHICH AGENCY HAS THE COLLECTION RESPONSIBILITY FOR THESE OVERPAYMENTS. AN EXPRESSION OF OUR VIEWS ON THIS SUBJECT MAY BE HELPFUL IN RESOLVING THESE DIFFERENCES OF OPINION.

WE BELIEVE THAT THE MAJORITY OF THESE OVERPAYMENTS OCCURRED AS A RESULT OF THE INADEQUACY OF PROCEDURES ESTABLISHED BY THE VA AND THE MILITARY SERVICES. THE LAW (38 U.S.C. 3104) PROHIBITS DUPLICATION OF BENEFITS, SUCH AS MILITARY RETIREMENT AND VA COMPENSATION OR PENSION, TO ANY PERSON BASED ON HIS OWN SERVICE. HOWEVER, THE LAW (38 U.S.C. 3105) PROVIDES FOR A WAIVER OF MILITARY RETIREMENT PAY IN ORDER THAT COMPENSATION OR PENSION PAYMENTS, WHICH ARE TAX EXEMPT, MAY BE MADE IN LIEU OF A LIKE AMOUNT OF MILITARY RETIREMENT PAY. THUS, WHEN A WAIVER IS EXECUTED, PAYMENTS OF MILITARY RETIREMENT AND VA COMPENSATION OR PENSION MAY BE MADE CONCURRENTLY PROVIDED THAT THE TOTAL OF SUCH PAYMENTS DOES NOT EXCEED THE LARGER OF THE RETIREMENT OR VA BENEFIT ENTITLEMENT. THIS SECTION FURTHER PROVIDES AS FOLLOWS FOR THE ESTABLISHMENT OF ADMINISTRATIVE CONTROL PROCEDURES FOR THE PURPOSE OF AVOIDING OVERPAYMENTS:

"*** TO PREVENT DUPLICATION OF PAYMENTS, THE DEPARTMENT WITH WHICH ANY SUCH WAIVER IS FILED SHALL NOTIFY THE VETERANS' ADMINISTRATION OF THE RECEIPT OF SUCH WAIVER, THE AMOUNT WAIVED, AND THE EFFECTIVE DATE OF THE REDUCTION IN RETIRED OR RETIREMENT PAY."

THIS PROVISION ANTICIPATES THAT THE INTERESTED MILITARY DEPARTMENT WILL RECEIVE THE WAIVER INITIALLY AND WILL NOTIFY THE VA ACCORDINGLY. HOWEVER, MANY OF THE TRANSACTIONS INVOLVING THE NECESSITY FOR OBTAINING WAIVERS ORIGINATE WITH THE VA. THEREFORE, TO BE EFFECTIVE, THE PROCEDURES SHOULD PROVIDE FOR THE INITIAL RECEIPT OF THE WAIVER BY EITHER AGENCY FOLLOWED BY PROMPT NOTICE TO THE OTHER AGENCY AND THE ESTABLISHMENT OF MUTUALLY ACCEPTABLE EFFECTIVE PAYMENT DATES. SO THAT SUCH DATES CAN BE ESTABLISHED, THE AGENCY CONSIDERING A NEW AWARD OR CHANGE OF RATE SHOULD BE RESPONSIBLE FOR DETERMINING THE APPLICANT'S STATUS WITH RESPECT TO PAYMENTS BY THE OTHER AGENCY. ASSUMING THAT THE VA IS THE AGENCY CONSIDERING A NEW AWARD OF COMPENSATION OR PENSION, IT SHOULD FIRST DETERMINE WHETHER THE APPLICANT IS RECEIVING MILITARY RETIREMENT PAYMENT PAY. IF SO, THE VA SHOULD THEN BE RESPONSIBLE FOR (1) OBTAINING A WAIVER OF RETIREMENT PAY, (2) NOTIFYING THE APPROPRIATE MILITARY DEPARTMENT OF THE PROPOSED ACTION THROUGH SUBMISSION OF THE WAIVER, (3) AWAITING ACKNOWLEDGMENT AND THE ESTABLISHMENT OF THE EFFECTIVE DATE, AND (4) BEGINNING PAYMENTS ON THE EFFECTIVE DATE AND IN THE PROPER AMOUNT. THE MILITARY DEPARTMENT SHOULD BE RESPONSIBLE FOR (1) NOTIFYING THE VA OF THE EFFECTIVE DATE OF THE WAIVER AND (2) BEGINNING RETIREMENT DEDUCTIONS ON THE EFFECTIVE DATE AND IN THE PROPER AMOUNT.

THE SPECIAL PROJECT, RECOMMENDED IN OUR LETTER OF SEPTEMBER 2, 1958 (B- 133071), FOR THE CORRECTION OF THE RECORDS OF VA AND THE SERVICE DEPARTMENTS AND THE DISCLOSURE OF OVERPAYMENTS HAS NOT BEEN COMPLETED BY THE AGENCIES. WE BELIEVE, HOWEVER, THAT THE CATEGORIES PRESENTED BELOW REPRESENT MOST CASES IN WHICH ERRORS HAVE OCCURRED. WE HAVE INDICATED FOR EACH OF THE CATEGORIES THE AGENCY WHICH IN OUR OPINION SHOULD BE RESPONSIBLE FOR THE COLLECTION OF ANY OVERPAYMENTS. WE ASSUME THAT THOSE CASES WHICH DO NOT FALL IN THESE SPECIFIC CATEGORIES WILL BE RELATIVELY FEW AND THAT RESPONSIBILITY FOR THE COLLECTION OF OVERPAYMENTS IN SUCH CASES MAY BE AGREED UPON BY THE AGENCIES INVOLVED. WE BELIEVE THAT THE PATTERN DEVELOPED BELOW SHOULD SERVE AS A GUIDE IN ESTABLISHING SUCH AGREEMENTS. WE BELIEVE IT WAS THE INTENT OF THE CONGRESS THAT DUPLICATE PAYMENTS WERE TO BE PREVENTED IN THE FIRST INSTANCE AND WERE NOT TO BE PAID AND SUBSEQUENTLY COLLECTED AS A NORMAL PROCEDURE. THE FOLLOWING SUGGESTIONS ARE BASED PRIMARILY ON OUR BELIEF THAT, IN ORDER TO PREVENT DUPLICATE PAYMENTS, CONCURRENT PAYMENTS SHOULD NOT BE STARTED OR CHANGED BY EITHER THE VA OR THE MILITARY SERVICES UNTIL A WAIVER HAS BEEN OBTAINED OR ADJUSTED AND A MUTUALLY EFFECTIVE DATE HAS BEEN ESTABLISHED.

1. CASES FOR WHICH WAIVERS OF RETIREMENT PAY HAVE NOT BEEN FILED

A. IF RETIREMENT PAYMENTS ARE BEING MADE, COMPENSATION OR PENSION PAYMENTS SHOULD NOT BE STARTED UNLESS RETIREMENT PAY IS WAIVED IN AN AMOUNT EQUAL TO THE PROPOSED COMPENSATION OR PENSION PAYMENTS. IN THE EVENT THAT COMPENSATION OR PENSION ENTITLEMENT IS GREATER THAN THE ENTITLEMENT FOR RETIREMENT, THE AMOUNT WAIVED WOULD EQUAL THE RETIREMENT PAY. IF COMPENSATION OR PENSION PAYMENTS ARE STARTED PRIOR TO THE RECEIPT AND ESTABLISHMENT OF AN EFFECTIVE WAIVER, THE COLLECTION OF OVERPAYMENTS UNDER THESE CIRCUMSTANCES SHOULD BE THE RESPONSIBILITY OF THE VA.

B. IF COMPENSATION OR PENSION PAYMENTS ARE BEING MADE, RETIREMENT PAYMENTS SHOULD BE STARTED ONLY UPON THE FILING OF A WAIVER FOR THAT PORTION OF THE PROPOSED RETIREMENT PAY WHICH IS EQUAL TO THE AMOUNT OF THE COMPENSATION OR PENSION PAYMENT THE VETERAN IS RECEIVING FROM THE VA. IN THE EVENT THAT RETIREMENT PAY IS LESS THAN COMPENSATION OR PENSION, NO RETIREMENT PAYMENT SHOULD BE MADE. IF MILITARY RETIREMENT PAYMENTS ARE STARTED PRIOR TO THE RECIPT AND ESTABLISHMENT OF AN EFFECTIVE WAIVER, THE COLLECTION OF OVERPAYMENTS UNDER THESE CIRCUMSTANCES SHOULD BE THE RESPONSIBILITY OF THE SERVICE DEPARTMENT.

2. CASES FOR WHICH WAIVERS OF RETIREMENT PAY HAVE BEEN FILED - AMENDMENTS TO WAIVERS

A. IN THOSE CASES INVOLVING STATUTORY INCREASES IN COMPENSATION OR PENSION, WHERE THE VETERAN HAS PREVIOUSLY FILED A WAIVER OF RETIREMENT PAY IN ORDER TO RECEIVE VA COMPENSATION OR PENSION, IT SHOULD BE THE RESPONSIBILITY OF THE SERVICE DEPARTMENT TO TAKE THE NECESSARY ACTION TO COLLECT THE AMOUNT OVERPAID. THE SERVICE DEPARTMENT IS ON NOTICE AS TO THE COMPENSATION OR PENSION RATE CHANGES REQUIRED BY STATUTE AND HAS NO AUTHORITY TO PAY THE VETERAN IN EXCESS OF THE AMOUNT OF RETIREMENT PAY LESS THE AMOUNT OF THE VA COMPENSATION OR PENSION PAYMENT AS AMENDED BY THE STATUTE.

B. IN THOSE CASES INVOLVING A CHANGE IN RATING BY THE VA, WHERE A VETERAN HAS PREVIOUSLY FILED A WAIVER OF RETIREMENT PAY IN ORDER TO RECEIVE VA COMPENSATION OR PENSION, IT SHOULD BE THE VA'S RESPONSIBILITY TO NOTIFY THE SERVICE UNIT OF THE PROPOSED CHANGE AND TO AWAIT THE ESTABLISHMENT OF A MUTUALLY EFFECTIVE DATE BEFORE BEGINNING PAYMENTS IN THE NEW AMOUNTS. IT SHOULD BE THE RESPONSIBILITY OF THE VA TO TAKE THE NECESSARY ACTION TO COLLECT ANY AMOUNT OVERPAID AS THE RESULT OF VA'S FAILURE TO COMPLY WITH THESE PROCEDURES. THE VETERAN'S WAIVER STATES THAT THE EFFECTIVE DATE OF THE WAIVER WILL BE SET BY THE DISBURSING OFFICER PAYING THE RETIREMENT PAY. PROCEDURES REQUIRE THE SERVICE DEPARTMENT TO ACKNOWLEDGE THE VA RATING CHANGE AND TO INFORM THE VA OF THE EFFECTIVE DATE OF THE CHANGE IN RETIREMENT DEDUCTIONS.

3. FILING OF ORIGINAL WAIVERS OF RETIREMENT PAY

A. IN CASES WHERE THE SERVICES ARE MAKING MILITARY RETIREMENT PAYMENTS AND THE VA SUBSEQUENTLY BEGINS PAYMENTS OF COMPENSATION OR PENSION BENEFITS PRIOR TO THE EFFECTIVE DATE OF WAIVER, IT IS THE VA'S RESPONSIBILITY TO COLLECT THE DUPLICATE PAYMENTS.

B. IN CASES WHERE THE SERVICE DEPARTMENT DOES NOT BEGIN THE DEDUCTIONS FROM RETIREMENT PAY ON THE EFFECTIVE DATE OF THE WAIVER, THE SERVICE DEPARTMENT SHOULD BE RESPONSIBLE FOR THE COLLECTION OF THE RESULTING OVERPAYMENT.

4. CASES INVOLVING RETROACTIVE WAIVERS OF RETIREMENT PAY

A. IN THOSE CASES WHERE A RETROACTIVE RIGHT TO RETIREMENT PAY IS ESTABLISHED BY THE SERVICE AND THE INDIVIDUAL HAS RECEIVED VA COMPENSATION OR PENSION PAYMENTS DURING THE RETROACTIVE PERIOD, A RETROACTIVE WAIVER MAY BE FFILED. IF THE RETIREMENT ENTITLEMENT EXCEEDS THE AMOUNT OF THE VA COMPENSATION OR PENSION PAYMENT, THE SERVICE DEPARTMENT SHOULD PAY THE NET AMOUNT REPRESENTING THE EXCESS OF THE RETROACTIVE RETIREMENT ENTITLEMENT OVER THE VA COMPENSATION OR PENSION PAYMENTS MADE DURING THE RETROACTIVE PERIOD. IF THE MILITARY SERVICE HAS BEEN MAKING RETIREMENT PAYMENTS DURING THE RETROACTIVE PERIOD, THE RETIREMENT RETROACTIVE ADJUSTMENT ONLY SHOULD BE PAID. IF THE RETIREMENT ENTITLEMENT IS LESS THE AMOUNT OF THE VA COMPENSATION OR PENSION PAYMENT, THE SERVICE DEPARTMENT SHOULD MAKE NO PAYMENTS. IN THESE CASES COLLECTION OF AN OVERPAYMENT AS A RESULT OF THE RETROACTIVE CORRECTION SHOULD BE THE RESPONSIBILITY OF THE SERVICE DEPARTMENT.

B. IN THOSE CASES WHERE A RECORD IS CORRECTED BY THE VA TO SHOW A RETROACTIVE ENTITLEMENT TO COMPENSATION OR PENSION PAYMENTS, AND THE INDIVIDUAL HAS RECEIVED MILITARY RETIREMENT PAY DURING THE RETROACTIVE PERIOD, A RETROACTIVE WAIVER MAY BE FILED. IF THE RETIREMENT PAY EQUALS OR EXCEEDS THE AMOUNT OF THE VA COMPENSATION OR PENSION, NO PAYMENT BY VA IS NECESSARY FOR THE RETROACTIVE PERIOD. IF THE AMOUNT OF THE VA COMPENSATION OR PENSION IS GREATER THAN THE RETIREMENT PAY, ONLY THE EXCESS OF VA COMPENSATION OR PENSION IS TO BE PAID BY VA FOR THE RETROACTIVE PERIOD. IN THESE CASES, COLLECTION OF AN OVERPAYMENT AS THE RESULT OF THE RETROACTIVE ADJUSTMENT SHOULD BE THE RESPONSIBILITY OF THE VA.

WE ARE SENDING A SIMILAR LETTER TO THE ADMINISTRATOR OF VETERANS AFFAIRS. COOPERATION BETWEEN THE AGENCIES IN THESE DETERMINATIONS SHOULD BE MUTUALLY BENEFICIAL.

WE WOULD APPRECIATE BEING ADVISED AS TO THE ACTION TAKEN BY YOUR DEPARTMENT AND THE RESULTS THEREOF.

REPRESENTATIVES OF THE GENERAL ACCOUNTING OFFICE WILL BE AVAILABLE, IF YOU SO DESIRE, FOR CONSULTATION AND DISCUSSION OF THIS MATTER.