B-135487, JUN. 10, 1958

B-135487: Jun 10, 1958

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UNITED STATES NAVY FINANCE CENTER: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 19. THE MEMBER'S PAY ACCOUNT IS BEFORE YOU FOR ADJUSTMENT AND YOUR SUBMISSION WILL BE CONSIDERED AS A REQUEST FOR DECISION AS TO WHETHER YOU ARE AUTHORIZED TO CREDIT HIM WITH RETIRED PAY AFTER RECEIPT OF THE EXECUTED WAIVER. WAS PLACED ON THE TEMPORARY DISABILITY RETIRED LIST ON MAY 1. SUBSEQUENT TO THIS RETIREMENT ACTION IT WAS FOUND THAT HE HAD BEEN OVERPAID IN THE NET AMOUNT OF $184.48 WHILE HE WAS ON ACTIVE DUTY. CHECK AGE IN THE AMOUNT OF $10.88 WAS ENTERED IN HIS RETIRED PAY ACCOUNT EFFECTIVE SEPTEMBER 1. THIS ELECTION AND WAIVER OF RETIRED PAY WAS PROCESSED BY THE VETERANS ADMINISTRATION AND TRANSMITTED TO THE NAVY FINANCE CENTER FOR INFORMATION AS TO THE AMOUNTS AND PERIODS OF PAYMENT OF HIS RETIRED PAY AND THE EFFECTIVE DATE OF ITS DISCONTINUANCE.

B-135487, JUN. 10, 1958

TO COMMANDER L. A. CAMPBELL, DISBURSING OFFICER, SPECIAL PAYMENTS DEPARTMENT, UNITED STATES NAVY FINANCE CENTER:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 19, 1958, XR3:C:40, L16-4/1 (MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, SUBMISSION NO. 326), REQUESTING A DECISION WHETHER ACTION ON A WAIVER OF RETIRED PAY BY A RETIRED MEMBER OF THE NAVY, WHICH HE SUBMITTED FOR THE PURPOSE OF RECEIVING DISABILITY COMPENSATION FROM THE VETERANS ADMINISTRATION, MAY BE HELD IN ABEYANCE UNTIL AN OVERPAYMENT OF ACTIVE DUTY PAY AND ALLOWANCES MADE TO SUCH MEMBER HAS BEEN RECOUPED BY OFFSET AGAINST HIS RETIRED PAY.

WHILE THE QUESTION, AS PRESENTED, DOES NOT INVOLVE THE LEGALITY OF PAYING A VOUCHER WHICH HAS BEEN PRESENTED TO YOU FOR PAYMENT, THE MEMBER'S PAY ACCOUNT IS BEFORE YOU FOR ADJUSTMENT AND YOUR SUBMISSION WILL BE CONSIDERED AS A REQUEST FOR DECISION AS TO WHETHER YOU ARE AUTHORIZED TO CREDIT HIM WITH RETIRED PAY AFTER RECEIPT OF THE EXECUTED WAIVER. THE ANSWER TO THAT QUESTION WOULD APPEAR, INCIDENTALLY, TO ANSWER THE QUESTION RELATIVE TO WITHHOLDING ACTION ON THE WAIVER.

YOU SAY THAT CHARLES P. MCCREADY, 481 89 04, OSCA, USNR, RETIRED, WAS PLACED ON THE TEMPORARY DISABILITY RETIRED LIST ON MAY 1, 1957, WITH A DISABILITY RATED AT 30 PERCENT AND ELECTED TO RECEIVE RETIRED PAY AT THE GROSS MONTHLY RATE OF $45.47, BASED ON HIS PERCENTAGE OF DISABILITY. SUBSEQUENT TO THIS RETIREMENT ACTION IT WAS FOUND THAT HE HAD BEEN OVERPAID IN THE NET AMOUNT OF $184.48 WHILE HE WAS ON ACTIVE DUTY. CHECK AGE IN THE AMOUNT OF $10.88 WAS ENTERED IN HIS RETIRED PAY ACCOUNT EFFECTIVE SEPTEMBER 1, 1957, AND AT $10.85 PER MONTH, EFFECTIVE OCTOBER 1, 1957, TO LIQUIDATE THE OVERPAYMENT.

MR. MCCREADY HAS BEEN DETERMINED TO BE ELIGIBLE FOR COMPENSATION UNDER LAWS ADMINISTERED BY THE VETERANS ADMINISTRATION AT THE RATE OF $73, MONTHLY, EFFECTIVE MAY 1, 1957, AND AT THE RATE OF $80, MONTHLY, EFFECTIVE OCTOBER 1, 1957. HE ELECTED TO RECEIVE HIS VETERAN'S COMPENSATION IN LIEU OF HIS RETIRED PAY AND ON NOVEMBER 27, 1957, THIS ELECTION AND WAIVER OF RETIRED PAY WAS PROCESSED BY THE VETERANS ADMINISTRATION AND TRANSMITTED TO THE NAVY FINANCE CENTER FOR INFORMATION AS TO THE AMOUNTS AND PERIODS OF PAYMENT OF HIS RETIRED PAY AND THE EFFECTIVE DATE OF ITS DISCONTINUANCE. BY LETTER OF DECEMBER 19, 1957, THE FINANCE CENTER ADVISED MR. MCCREADY THAT HIS WAIVER WOULD NOT BE COMPLETED, AND MADE EFFECTIVE, UNTIL HIS INDEBTEDNESS HAD BEEN LIQUIDATED. HE WAS FURTHER ADVISED THAT HE COULD EXPEDITE THE MATTER BY REPAYING THE BALANCE OF HIS INDEBTEDNESS OR BY REQUESTING THAT PAYMENT OF HIS RETIRED PAY BE SUSPENDED UNTIL A SUFFICIENT AMOUNT ACCRUED TO LIQUIDATE THE DEBT. HE AUTHORIZED THE SUSPENSION OF HIS RETIRED PAY PAYMENTS AND SUCH ACTION WAS TAKEN EFFECTIVE JANUARY 1, 1958. YOU SAY THAT THE ACCUMULATED RETIRED PAY WILL LIQUIDATE THE INDEBTEDNESS BY APRIL 30, 1958, AND THAT THE WAIVER WILL BE COMPLETED EFFECTIVE MAY 1, 1958.

SECTION 1005 OF THE ACT OF JUNE 17, 1957, 71 STAT. 123, 38 U.S.C. 3005, PROVIDES (QUOTING THE UNITED STATES CODE):

"ANY PERSON WHO IS RECEIVING PAY PURSUANT TO ANY PROVISION OF LAW RELATING TO THE RETIREMENT OF PERSONS IN THE REGULAR MILITARY, NAVAL, OR AIR SERVICE, OR RELATING TO RETIREMENT FROM ANY RESERVE COMPONENT OF THE MILITARY, NAVAL, OR AIR SERVICE FOR DISABILITY, AND WHO WOULD BE ELIGIBLE TO RECEIVE PENSION OR COMPENSATION UNDER THE LAWS ADMINISTERED BY THE VETERANS' ADMINISTRATION IF HE WERE NOT RECEIVING SUCH RETIRED PAY, SHALL BE ENTITLED TO RECEIVE SUCH PENSION OR COMPENSATION UPON THE FILING BY SUCH PERSON WITH THE DEPARTMENT BY WHICH SUCH RETIRED PAY IS PAID OF A WAIVER OF SO MUCH OF HIS RETIRED PAY AS IS EQUAL IN AMOUNT TO SUCH PENSION OR COMPENSATION. 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 PAY.'

THE STATUTE CONTAINS NO EXPRESS PROVISION GRANTING ADMINISTRATIVE DISCRETION AS TO WHEN THE WAIVER SHALL BE PROCESSED AND MADE EFFECTIVE AND IT APPARENTLY CONTEMPLATES THAT SUCH ADMINISTRATIVE ACTION SHALL BE TAKEN PROMPTLY UPON RECEIPT OF THE WAIVER. NO PROVISION IS MADE FOR REFUSING TO PROCESS THE WAIVER UNTIL ANY INDEBTEDNESS OF THE MEMBER HAS BEEN LIQUIDATED. IT WILL BE NOTED, HOWEVER, THAT THE STATUTE CONTAINS A PROVISION, FOR THE PURPOSE OF PREVENTING DUPLICATE PAYMENTS, THAT THE DEPARTMENT WITH WHICH THE WAIVER IS FILED SHALL NOTIFY THE VETERANS ADMINISTRATION OF THE RECEIPT OF THE WAIVER, THE AMOUNT WAIVED, AND THE EFFECTIVE DATE OF THE WAIVER, IN VIEW OF SUCH PROVISIONS, IT WOULD APPEAR THAT THE STATUTE CONTEMPLATES THAT THE WAIVER WILL NOT BECOME EFFECTIVE UNTIL SUCH TIME AS MAY BE REASONABLY NECESSARY TO PROMPTLY PROCESS IT AND ADMINISTRATIVELY ESTABLISH AN EFFECTIVE DATE THAT WILL AVOID ANY DUPLICATE PAYMENTS OR OVERPAYMENTS. AND, IN VIEW OF THE PROVISIONS OF THE ACT OF JULY 15, 1954, 68 STAT. 482, IF THE MEMBER IS INDEBTED TO THE GOVERNMENT, IT IS NOT BELIEVED THAT THE LAW REQUIRES THAT THE WAIVER BE MADE EFFECTIVE PRIOR TO SUCH TIME AS REASONABLY MAY BE NECESSARY TO COMMUNICATE WITH THE MEMBER, REQUESTING HIS CONSENT TO WITHHOLD ACTION ON THE WAIVER, OR THAT HE MODIFY THE AMOUNT WAIVED, FOR THE PURPOSE OF ACCRUING RETIRED PAY TO LIQUIDATE THE INDEBTEDNESS. IF THE MEMBER DOES NOT VOLUNTARILY CONSENT TO SUCH ACTION, HOWEVER, THERE WOULD BE NO AUTHORITY TO FURTHER DELAY GIVING EFFECT TO THE WAIVER.

WHILE THERE WAS NO AUTHORITY FOR ADVISING MR. MCCREADY THAT HIS WAIVER WOULD NOT BE MADE EFFECTIVE UNTIL HIS INDEBTEDNESS HAD BEEN LIQUIDATED, SINCE HE DID NOT PROTEST SUCH ACTION AND AUTHORIZED THE SUSPENSION OR WITHHOLDING OF HIS RETIRED PAY UNTIL HIS INDEBTEDNESS WAS LIQUIDATED, IT MAY BE CONSIDERED THAT HE VOLUNTARILY CONSENTED TO SUCH ACTION. ACCORDINGLY, PAYMENT TO HIM OF THE AMOUNT WITHHELD TO LIQUIDATE HIS INDEBTEDNESS IS NOT REQUIRED AND HIS ACCOUNT SHOULD BE ADJUSTED ON SUCH BASIS.