B-136309, JUL. 18, 1958

B-136309: Jul 18, 1958

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YOUR REQUEST FOR DECISION WAS APPROVED BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE UNDER D.O. IT APPEARS FROM THE INFORMATION FURNISHED THAT MAJOR HAGGARD WAS CERTIFIED FOR PAYMENT OF RETIREMENT PAY ON SEPTEMBER 20. THAT THE MEMBER'S DISABILITY WAS NOT THE RESULT OF WOUNDS RECEIVED IN BATTLE. YOU REPORT THAT MAJOR HAGGARD WAS EMPLOYED BY THE DEPARTMENT OF THE AIR FORCE. IT APPEARS THAT ON THE BASIS OF SUCH 20 PERCENTUM ADDITIONAL PAYMENT MAJOR HAGGARD'S RETIREMENT PAY PAYMENTS WERE REDUCED EFFECTIVE MARCH 1. THAT THE SALARY DIFFERENTIAL THEN PAYABLE OUTSIDE THE CONTINENTAL UNITED STATES WAS PART OF BASIC COMPENSATION. SUCH SALARY DIFFERENTIAL WAS PAID PURSUANT TO ADMINISTRATIVE PRACTICE RATHER THAN UNDER AN EXPRESS PROVISION OF LAW AT THE TIME.

B-136309, JUL. 18, 1958

TO LIEUTENANT COLONEL N. P. HANNA, FINANCE AND ACCOUNTING OFFICER:

ON MAY 26, 1958, THE CHIEF OF FINANCE, DEPARTMENT OF THE ARMY, FORWARDED YOUR LETTER OF APRIL 23, 1958, REQUESTING AN ADVANCE DECISION CONCERNING THE LEGALITY OF PAYING MAJOR KENNETH L. HAGGARD, 0 283 169, RETIRED, $100.55, REPRESENTING RETIREMENT PAY WITHHELD FROM HIM FOR THE PERIOD MARCH 1 TO 31, 1958. YOUR REQUEST FOR DECISION WAS APPROVED BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE UNDER D.O. NUMBER 348.

IT APPEARS FROM THE INFORMATION FURNISHED THAT MAJOR HAGGARD WAS CERTIFIED FOR PAYMENT OF RETIREMENT PAY ON SEPTEMBER 20, 1945, UNDER THE PROVISIONS OF THE ACT OF APRIL 3, 1939, 53 STAT. 557, AS AMENDED; THAT THE MEMBER'S DISABILITY WAS NOT THE RESULT OF WOUNDS RECEIVED IN BATTLE, INCURRED IN COMBAT WITH AN ENEMY OF THE UNITED STATES, OR THE RESULT OF AN INSTRUMENTALITY OF WAR AND INCURRED IN LINE OF DUTY, AND THAT HIS MEMBERSHIP IN A RESERVE COMPONENT EXPIRED BY OPERATION OF LAW ON APRIL 1, 1953. YOU REPORT THAT MAJOR HAGGARD WAS EMPLOYED BY THE DEPARTMENT OF THE AIR FORCE, HAWAII, EFFECTIVE DECEMBER 26, 1956, AT THE RATE OF $6,250 PER ANNUM, AND AN ADDITIONAL 20 PERCENTUM OF BASIC PAY FOR TERRITORIAL COST-OF -LIVING ALLOWANCE IN THE AMOUNT OF $1,250 PER ANNUM. IT APPEARS THAT ON THE BASIS OF SUCH 20 PERCENTUM ADDITIONAL PAYMENT MAJOR HAGGARD'S RETIREMENT PAY PAYMENTS WERE REDUCED EFFECTIVE MARCH 1, 1958, TO PRECLUDE POSSIBLE FURTHER VIOLATION OF THE $10,000 PER ANNUM DUAL COMPENSATION LIMITATION IMPOSED BY SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A.

YOUR DOUBT IN THIS MATTER APPEARS TO BE BASED ON OUR DECISION OF OCTOBER 28, 1946, 26 COMP. GEN. 271, 278, HOLDING THAT THE "ANNUAL RATE OF COMPENSATION FROM SUCH CIVILIAN OFFICE OR OSITION" APPEARING IN SECTION 212 OF THE 1932 ACT HAS REFERENCE TO THE BASIC COMPENSATION OF THE CIVILIAN OFFICE OR POSITION, AND THAT THE SALARY DIFFERENTIAL THEN PAYABLE OUTSIDE THE CONTINENTAL UNITED STATES WAS PART OF BASIC COMPENSATION. HOWEVER, SUCH SALARY DIFFERENTIAL WAS PAID PURSUANT TO ADMINISTRATIVE PRACTICE RATHER THAN UNDER AN EXPRESS PROVISION OF LAW AT THE TIME. THE TERRITORIAL COST-OF-LIVING ALLOWANCE RECEIVED BY MAJOR HAGGARD IS PAID UNDER AUTHORITY OF SECTION 207 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, 1949, 62 STAT. 194, AS AMENDED BY SECTION 104 OF THE SUPPLEMENTAL INDEPENDENT OFFICES APPROPRIATION ACT, 1949, 62 STAT. 1205. THAT SECTION PROVIDES THAT ANY FUNDS OR APPROPRIATIONS AVAILABLE TO THE EXECUTIVE DEPARTMENTS FOR THE PAYMENT OF SALARIES AND COMPENSATION TO PERSONS STATIONED OUTSIDE THE CONTINENTAL UNITED STATES OR IN ALASKA,WHOSE "RATES OF BASIC COMPENSATION FIXED BY STATUTE," SHALL BE AVAILABLE FOR THE PAYMENT OF "ADDITIONAL COMPENSATION" WITHIN THE LIMITATION THERE PROVIDED, IN ACCORDANCE WITH REGULATIONS PRESCRIBED BY THE PRESIDENT. SUCH REGULATIONS WERE PRESCRIBED BY EXECUTIVE ORDER NO. 10000, SEPTEMBER 16, 1948, 13 F.R. 5453.

SINCE THE SALARY DIFFERENTIAL PAYABLE UNDER ADMINISTRATIVE REGULATIONS IN EFFECT PRIOR TO SEPTEMBER 16, 1948, WAS CONSIDERED TO BE A PART OF BASIC COMPENSATION, SUCH DIFFERENTIAL CONSTITUTED A PART OF THE BASE COMPENSATION FROM WHICH RETIREMENT DEDUCTIONS WERE REQUIRED TO BE MADE. 22 COMP. GEN. 769. CF. 10 COMP. GEN. 519. SECTION 205 OF EXECUTIVE ORDER NO. 10000 PROVIDES THAT THE UNITED STATES CIVIL SERVICE COMMISSION SHALL FROM TIME TO TIME, SUBJECT TO APPLICABLE LAW, (1) DESIGNATE PLACES IN THE TERRITORIES WHERE IT DETERMINES THAT LIVING COSTS ARE SUBSTANTIALLY HIGHER THAN IN THE DISTRICT OF COLUMBIA, (2) FIX FOR EACH PLACE SO DESIGNATED AN ADDITIONAL RATE OR RATES OF COMPENSATION BY REASON OF SUCH HIGHER LIVING COSTS PURSUANT TO SECTION 207 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, 1949, AND (3) PRESCRIBE SUCH FURTHER REGULATIONS GOVERNING SUCH COMPENSATION AS MAY BE NECESSARY, THE "ADDITIONAL COMPENSATION" SO FIXED TO BE REFERRED TO AS "TERRITORIAL COST-OF-LIVING ALLOWANCE.'

THE CIVIL SERVICE COMMISSION REGULATIONS, Z1-453, FEDERAL PERSONNEL MANUAL, PROVIDE THAT NEITHER A TERRITORIAL POST DIFFERENTIAL NOR A TERRITORIAL COST-OF-LIVING ALLOWANCE SHALL BE INCLUDED IN THE BASE USED IN COMPUTING OVERTIME PAY, NIGHT DIFFERENTIAL, HOLIDAY PAY, RETIREMENT DEDUCTIONS, OR ANY OTHER ADDITIONAL COMPENSATION, ALLOWANCE, OR PAY DIFFERENTIAL. IN OUR DECISIONS, WE HAVE SAID THAT TERRITORIAL POST DIFFERENTIAL NO LONGER IS REGARDED AS COMPENSATION FIXED FOR A POSITION AND PAYABLE TO THE OCCUPANT OF A POSITION AS PART OF HIS SALARY FOR THAT POSITION BUT NOW IS CONSIDERED AS ADDITIONAL COMPENSATION. SEE 28 COMP. GEN. 266, 269; ID. 377, 379. COMPARE B-135734, MAY 8, 1958, 37 COMP. GEN. - . ACCORDINGLY, OUR VIEW IS THAT THE TERRITORIAL COST-OF LIVING ALLOWANCE PAID MAJOR HAGGARD IS NOT A PART OF HIS ANNUAL (BASIC) COMPENSATION AND, THEREFORE, IS NOT PROPERLY FOR CONSIDERATION AS CIVILIAN SALARY WITHIN THE CONTEMPLATION OF SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, FOR THE PERIOD IN QUESTION. IN THIS CONNECTION, SEE 22 COMP. GEN. 795, 796.

IN THE CIRCUMSTANCES PAYMENT IS AUTHORIZED ON THE SUBMITTED VOUCHER, RETURNED HEREWITH, IF OTHERWISE CORRECT.