B-136959, B-143431, SEPTEMBER 29, 1960, 40 COMP. GEN. 193

B-136959, B-143431, SEPTEMBER 29, 1960, 40 COMP. GEN. 193

MILITARY PERSONNEL - DUAL COMPENSATION - MAXIMUM LIMITATION - ANNUAL RATE V. AMOUNT THE RULE WITH RESPECT TO THE APPLICATION OF THE DUAL COMPENSATION RESTRICTION IN SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A, THAT THE ANNUAL RATE OF COMPENSATION AND RETIRED PAY IS CONTROLLING RATHER THAN THE TOTAL AMOUNT OF COMBINED PAY WILL CONTINUE TO BE FOLLOWED PENDING A CLARIFICATION OF THE HOLDING IN SCHUYLER V. UNITED STATES, CT.1CL. NO. 548-58, JANUARY 20, 1960, IN WHICH THE COURT AUTHORIZED A REFUND OR RETIRED PAY TO A RETIRED NAVY OFFICER WHOSE ACTUAL COMBINED CIVILIAN COMPENSATION AS A CONSULTANT AND RETIRED PAY BASED ON A PARTICULAR CALENDAR YEAR WAS LESS THAN $10,000--- THE LIMITATION IN THE ACT--- BUT DID NOT INDICATE THE BASIS FOR THE SELECTION OF A CALENDAR YEAR INSTEAD OF AN EMPLOYMENT YEAR AND WHAT ACTION WOULD BE TAKEN IN CASES WHERE THE COMBINED AMOUNT EXCEEDED THE LIMITATION.

TO LIEUTENANT COLONEL R. H. MACPHERSON, DEPARTMENT OF THE ARMY, SEPTEMBER 29, 1960:

ON JULY 5, 1960, THE OFFICE CHIEF OF FINANCE, DEPARTMENT OF THE ARMY, FORWARDED YOUR UNDATED LETTER, WITH ENCLOSURES, REQUESTING A DECISION WHETHER, IN VIEW OF THE LIMITATIONS IN SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A, COLONEL WILLIAM D. WHITE, UNITED STATES ARMY, RETIRED, 104 1024, IS ENTITLED TO RECEIVE HIS RETIRED PAY IN ADDITION TO COMPENSATION AS A CIVILIAN EMPLOYEE OF THE UNITED STATES GOVERNMENT DURING A CERTAIN PERIOD AS SET FORTH IN YOUR LETTER. YOUR REQUEST FOR DECISION WAS ASSIGNED D.O. NUMBER 511 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

IT IS REPORTED THAT COLONEL WHITE WAS RETIRED SEPTEMBER 30, 1950, PURSUANT TO THE PROVISIONS OF SECTION 514 (A) OF THE OFFICER PERSONNEL ACT OF 1947, 61 STAT. 902 (NOW 10 U.S.C. 3883), UPON ATTAINING 60 YEARS OF AGE ON SEPTEMBER 12, 1950, AFTER COMPLETING MORE THAN 30 YEARS' SERVICE. IS FURTHER REPORTED THAT COLONEL WHITE WAS EMPLOYED BY THE DEPARTMENT OF THE ARMY, ARMY AND NAVY HOSPITAL, HOT SPRINGS, ARKANSAS, AS A CONSULTANT, AT THE RATE OF $50 PER DAY WHEN ACTUALLY EMPLOYED. PURSUANT TO THE INFORMATION FURNISHED, COLONEL WHITE ACTUALLY SERVED AS SUCH CONSULTANT ON THE FOLLOWING DATES; DECEMBER 3, 1956, JANUARY 2, 1957, JANUARY 13, 1957, FEBRUARY 11, 1957, MARCH 12, 1957, APRIL 9, 1957, MAY 7, 1957, MAY 31, 1957, JUNE 18, 1957, FEBRUARY 26, 1958, APRIL 8, 1958, MAY 1, 1958, OCTOBER 20, 1958, JUNE 17, 1959, JUNE 23, 1959, AND JULY 6, 1959. APPEARS THAT RETIRED PAY FOR EACH OF THOSE DAYS, TOTALING $329.34, HAS BEEN WITHHELD OR RECOVERED BY THE GOVERNMENT BECAUSE OF SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, AS INTERPRETED AND APPLIED IN 38 COMP. GEN. 774 AND EARLIER DECISIONS OF OUR OFFICE.

SECTION 212, AS AMENDED, 5 U.S.C. 59A, PROVIDES IN PERTINENT PART AS FOLLOWS:

(A) AFTER JUNE 30, 1932, NO PERSON HOLDING A CIVILIAN OFFICE OR POSITION, APPOINTIVE OR ELECTIVE, UNDER THE UNITED STATES GOVERNMENT OR THE MUNICIPAL GOVERNMENT OF THE DISTRICT OF COLUMBIA OR UNDER ANY CORPORATION, THE MAJORITY OF THE STOCK OF WHICH IS OWNED BY THE UNITED STATES, SHALL BE ENTITLED, DURING THE PERIOD OF SUCH INCUMBENCY, TO RETIRED PAY FROM THE UNITED STATES FOR OR ON ACCOUNT OF SERVICES AS A COMMISSIONED OFFICER IN ANY OF THE SERVICES MENTIONED IN TITLE 37, AT A RATE IN EXCESS OF AN AMOUNT WHICH WHEN COMBINED WITH THE ANNUAL RATE OF COMPENSATION FROM SUCH CIVILIAN OFFICE OR POSITION, MAKES THE TOTAL RATE FROM BOTH SOURCES MORE THAN $10,000; AND WHEN THE RETIRED PAY AMOUNTS TO OR EXCEEDS THE RATE OF $10,000 PER ANNUM SUCH PERSON SHALL BE ENTITLED TO THE PAY OF THE CIVILIAN OFFICE OR POSITION OR THE RETIRED PAY, WHICHEVER HE MAY ELECT. AS USED IN THIS SECTION, THE TERM "RETIRED PAY" SHALL BE CONSTRUED TO INCLUDE CREDITS FOR ALL SERVICE THAT LAWFULLY MAY ENTER INTO THE COMPUTATION THEREOF.

(B) THIS SECTION SHALL NOT APPLY TO ANY PERSON WHOSE RETIRED PAY, PLUS CIVILIAN PAY, AMOUNTS TO LESS THAN $10,000.

IN 38 COMP. GEN. 774, WE HELD IN PERTINENT PART AS FOLLOWS (QUOTING FROM THE SYLLABUS):

IN DETERMINING THE APPLICABILITY OF THE DUAL COMPENSATION LIMITATION IN SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A, IT IS THE COMBINED ANNUAL RATE OF CIVILIAN COMPENSATION AND RETIRED PAY WHICH CONTROLS, IRRESPECTIVE OF THE NUMBER OF DAYS OF WORK IN THE CIVILIAN POSITION, AND NOT THE TOTAL AMOUNT OF CIVILIAN COMPENSATION AND RETIRED PAY RECEIVED DURING THE YEAR OR FRACTION OF A YEAR; THEREFORE, A RETIRED OFFICER WHO IS EMPLOYED ON A "WHEN ACTUALLY EMPLOYED BASIS" UNDER A CONTRACT WHICH LIMITS THE HOURS OR DAYS OF WORK BUT PERMITS THE RECEIPT OF A TOTAL AMOUNT OF RETIRED PAY, PLUS CIVILIAN COMPENSATION WHICH EXCEEDS THE $3,000 LIMITATION, IN EFFECT THROUGH AUGUST 3, 1955, OR THE $10,000 LIMITATION, WHICH BECAME EFFECTIVE ON AUGUST 4, 1955, IS REQUIRED TO HAVE HIS CIVILIAN COMPENSATION AND RETIRED PAY REDUCED UNDER THE ACT.

IN THE CASE OF GARRET L. SCHUYLER V. UNITED STATES, CT.1CL. NO. 548 58, DECIDED JANUARY 20, 1960, THE COURT CONSIDERED THE RIGHTS OF A RETIRED NAVY OFFICER TO RETIRED PAY WITHHELD PURSUANT TO SECTION 212 OF THE ECONOMY ACT. THE OFFICER THERE INVOLVED WAS EMPLOYED AS A CONSULTANT ON A WHEN-ACTUALLY-EMPLOYED BASIS, AT THE RATE OF $50 PER DAY, WITH A LIMIT OF 130 DAYS' EMPLOYMENT PER YEAR. AT THAT PER DIEM RATE HE COULD HAVE RECEIVED $6,500 FOR THE YEAR. SINCE THE PLAINTIFF'S RETIRED PAY WAS $7,300.80 PER ANNUM, THE COMBINED CIVILIAN COMPENSATION AND RETIRED PAY EXCEEDED THE RATE OF $10,000 PER YEAR. HOWEVER, HE ACTUALLY WORKED ONLY 49 DAYS DURING THE CALENDAR YEAR 1956 FOR WHICH HE WAS PAID $2,450. THUS, THE ACTUAL TOTAL RECEIVED FOR THAT YEAR WAS LESS THAN $10,000, AND, HENCE, HE CLAIMED THAT FOR THAT YEAR THE ECONOMY ACT WAS INAPPLICABLE TO HIM. THE COURT HELD THAT IN VIEW OF SUBSECTION (B) OF SECTION 212 OF THE ECONOMY ACT THE OFFICER WAS ENTITLED TO A REFUND OF THE RETIRED PAY WITHHELD FROM HIM DURING THE CALENDAR YEAR 1956 BECAUSE THE TOTAL AMOUNT RECEIVED BY HIM FOR THAT YEAR AS COMPENSATION AS A GOVERNMENT CIVILIAN EMPLOYEE AND RETIRED PAY AS AN OFFICER WAS LESS THAN $10,000. THE COURT'S VIEW OF THE MATTER WAS THAT WHEN BOTH PARAGRAPHS (A) AND (B) OF SECTION 212 "ARE READ TOGETHER AND INTERPRETED TOGETHER IT BECOMES CLEAR THAT IT WAS THE INTENTION OF THE CONGRESS TO MAKE THE STATUTE INAPPLICABLE TO CASES WHERE THE ACTUAL CIVILIAN PAY PLUS RETIRED PAY AMOUNTS TO LESS THAN $10,000.'

THE CONCLUSION REACHED BY THE COURT IS INCONSISTENT WITH OUR CONTEMPORANEOUS AND CONSISTENT CONSTRUCTION OF SECTION 212 (SEE 12 COMP. GEN. 256), NAMELY, THAT IT IS THE ANNUAL RATE OF COMPENSATION AND RETIRED PAY WHICH IS CONTROLLING. IT WILL BE NOTED, HOWEVER, THAT THE COURT WENT NO FURTHER THAN TO CONCLUDE THAT THE ECONOMY ACT SHOULD NOT APPLY TO REAR ADMIRAL SCHUYLER DURING THE CALENDAR YEAR 1956 ( JANUARY 1 TO DECEMBER 31, 1956), BECAUSE DURING THAT YEAR HE DID NOT RECEIVE A TOTAL AMOUNT, REPRESENTING RETIRED PAY AND CIVILIAN COMPENSATION, IN EXCESS OF $10,000. THE COURT'S OPINION DOES NOT INDICATE THAT THE TERM OF ADMIRAL SCHUYLER'S EMPLOYMENT WAS CONSIDERED OR THAT THE BEGINNING OF THE YEAR (1956) HAD ANY RELATIONSHIP TO THE ANNIVERSARY DATE OF HIS EMPLOYMENT. THAT CALENDAR YEAR APPARENTLY WAS USED BY THE PLAINTIFF AS A BASIS FOR HIS SUIT ONLY BECAUSE HE ACTUALLY DID NOT RECEIVE A TOTAL AMOUNT IN EXCESS OF $10,000 FOR THAT PARTICULAR PERIOD. THE STATUTE DOES NOT INDICATE THAT SUBSECTION (B) OF SECTION 212 SHOULD BE APPLIED IN ALL CASES ON A CALENDAR YEAR BASIS RATHER THAN ON THE BASIS OF AN EMPLOYMENT YEAR OR SOME OTHER YEAR AND IT IS NOT CLEAR FROM THE COURT'S OPINION WHAT ACTION IT MIGHT TAKE IN A SIMILAR CASE IF THE COMBINED AMOUNT OF CIVILIAN COMPENSATION AND RETIRED PAY EXCEEDED $10,000 FOR A SINGLE EMPLOYMENT YEAR BUT THE COMBINED AMOUNT FOR EITHER OF THE PARTS OF THE TWO CALENDAR YEARS INVOLVED DID NOT EXCEED $10,000. MOREOVER, UNDER THE INTERPRETATION WHICH THE COURT MADE IN THE SCHUYLER CASE, THE RETIRED PAY RIGHTS IN MOST OF THESE DUAL EMPLOYMENT CASES WOULD NOT BE DEFINITELY KNOWN OR FIXED UNTIL NEAR THE END OF SOME ANNUAL PERIOD. IN SUCH CIRCUMSTANCES, THE SCHUYLER DECISION MAY NOT BE USED AS A BASIS FOR FIXING A NEW GENERAL RULE FOR THE APPLICATION OF SECTION 212 IN THE SETTLEMENT OF OTHER SIMILAR CASES AND THE RULE SET FORTH IN 38 COMP. GEN. 774 AND FOLLOWED SINCE 1932 WILL CONTINUE TO BE APPLIED PENDING A CLARIFICATION OF THE POSITION TAKEN BY THE COURT IN THE SCHUYLER CASE.

THEREFORE, COLONEL WHITE IS NOT ENTITLED TO RECEIVE THE RETIRED PAY IN QUESTION AND THE SUBMITTED VOUCHER WILL BE RETAINED IN OUR OFFICE.