B-138836, MAY 18, 1959, 38 COMP. GEN. 774

B-138836: May 18, 1959

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5 U.S.C. 59A IT IS THE COMBINED ANNUAL RATE OF CIVILIAN COMPENSATION AND RETIRED PAY WHICH CONTROLS. A RETIRED OFFICER WHO IS EMPLOYED ON A "WHEN ACTUALLY EMPLOYED AS IS" UNDER A CONTRACT WHICH LIMITS THE HOURS OR DAYS OF WORK BUT PERMITS THE RECEIPT OF A TOTAL AMOUNT OF RETIRED PAY. IS REQUIRED TO HAVE HIS CIVILIAN COMPENSATION AND RETIRED PAY REDUCED UNDER THE ACT. AN OFFICER WHO WAS RETIRED FOR DISABILITY UNDER 34 U.S.C. 417. WHO WAS EMPLOYED ON A "WHEN ACTUALLY EMPLOYED BASIS" UNDER CONTRACTS WHICH LIMITED THE NUMBER OF DAYS OF EMPLOYMENT BUT WHICH PERMITTED HIM TO RECEIVE AN AMOUNT WHICH. WAS NOT ENTITLED TO RECEIVE RETIRED PAY FOR THE DAYS FOR WHICH HE RECEIVED CIVILIAN COMPENSATION.

B-138836, MAY 18, 1959, 38 COMP. GEN. 774

MILITARY PERSONNEL - RETIRED - DUAL COMPENSATION LIMITATION - SECTION 212, ECONOMY ACT OF 1932 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 AS IS" 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. AN OFFICER WHO WAS RETIRED FOR DISABILITY UNDER 34 U.S.C. 417, WHO WAS EMPLOYED ON A "WHEN ACTUALLY EMPLOYED BASIS" UNDER CONTRACTS WHICH LIMITED THE NUMBER OF DAYS OF EMPLOYMENT BUT WHICH PERMITTED HIM TO RECEIVE AN AMOUNT WHICH, WHEN COMBINED WITH THE RETIRED PAY, EXCEEDS THE ANNUAL RATE OF $3,000 FOR ONE-YEAR PERIODS DURING 1952-1955 PRESCRIBED IN SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A, WAS NOT ENTITLED TO RECEIVE RETIRED PAY FOR THE DAYS FOR WHICH HE RECEIVED CIVILIAN COMPENSATION; HOWEVER, FOR THE PERIOD AFTER JUNE 30, 1955, WHEN THE NUMBER OF DAYS EMPLOYMENT WAS LIMITED TO NINETY A YEAR, THE CIVILIAN COMPENSATION WHEN COMBINED WITH RETIRED PAY DID NOT EXCEED THE $10,000 DUAL COMPENSATION LIMITATION EFFECTIVE AUGUST 4, 1955, SO THAT NEITHER THE CIVILIAN COMPENSATION NOR THE RETIRED PAY WAS SUBJECT TO REDUCTION. UNDER THE DUAL COMPENSATION LIMITATION IN SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A, WHEN THE RETIRED PAY IS LESS THAN $10,000 A YEAR BUT THE SALARY RATE OF THE CIVILIAN POSITION, PLUS RETIRED PAY, EXCEEDS THE $10,000, THE FULL SALARY OF THE CIVILIAN POSITION IS PAID, AND THE DEDUCTION TO BRING THE RATE OF COMPENSATION AND RETIRED PAY WITHIN THE LIMITATION IS MADE FROM THE RETIRED PAY. A RETIRED OFFICER WHOSE COMBINED RATE OF RETIRED PAY AND CIVILIAN COMPENSATION DURING THE PERIOD OF JANUARY 5 TO MAY 31, 1958--- THE PERIOD FOR WHICH CIVILIAN EMPLOYEES RECEIVED A RETROACTIVE SALARY INCREASE UNDER SECTION 17 (A) OF THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958, 5 U.S.C. 1113 NOTE--- WAS LESS THAN THE $10,000 LIMITATION IN SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A, IS ENTITLED TO HAVE THE BENEFIT OF THE RETROACTIVE INCREASE, IF THE ALLOWANCE OF SUCH INCREASE IS TO THE EMPLOYEE'S ADVANTAGE, TAKING INTO CONSIDERATION ANY TAX ADJUSTMENT REQUIRED, WITH ANY NECESSARY REDUCTION IN RETIRED PAY SO AS NOT TO EXCEED THE $10,000 LIMITATION.

TO COMMANDER R. A. WILSON, DEPARTMENT OF THE NAVY, MAY 18, 1959:

BY SECOND ENDORSEMENT DATED FEBRUARY 25, 1959, THE OFFICE OF THE COMPTROLLER OF THE NAVY FORWARDED YOUR LETTER OF FEBRUARY 5, 1959, WITH ENCLOSURES, REQUESTING A DECISION WHETHER IN VIEW OF THE LIMITATIONS IN SECTIONS 212 OF THE ECONOMY ACT OF 1932, AS AMENDED, 5 U.S.C. 59A, LIEUTENANT ROBERT G. DUNN, JR., MEDICAL CORPS, USN, RETIRED, 115336, AND COMMANDER CHRISTOPHER NOBLE, USN, RETIRED, 56891, ARE ENTITLED TO RECEIVE THEIR RETIRED PAY IN ADDITION TO SALARY AS CIVILIAN EMPLOYEES OF THE UNITED STATES GOVERNMENT DURING THE PERIODS IN QUESTION. YOUR REQUEST FOR AN ADVANCE DECISION WAS ASSIGNED SUBMISSION NO. DO-N-402 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

IN THE CASE OF LIEUTENANT DUNN, IT IS REPORTED THAT HE WAS PLACED ON THE RETIRED LIST EFFECTIVE AUGUST 1, 1946, BY REASON OF PHYSICAL DISABILITY PURSUANT TO 34 U.S.C. 417, AND THAT THE PROVISIONS OF SECTION 212 OF THE ECONOMY ACT OF 1932, AS AMENDED, ARE APPLICABLE IN HIS CASE, SINCE IT HAS BEEN DETERMINED BY THE JUDGE ADVOCATE GENERAL OF THE NAVY THAT NO RELATIONSHIP EXISTS BETWEEN THE OFFICER'S DISABILITY AND COMBAT OR AN INSTRUMENTALITY OF WAR.

IT IS FURTHER REPORTED THAT SINCE MARCH 13, 1952, LIEUTENANT DUNN HAS BEEN CONTINUOUSLY EMPLOYED AS A CONSULTANT BY THE OFFICE OF THE SURGEON GENERAL, TURNER AIR FORCE BASE, GEORGIA, UNDER A SERIES OF ANNUAL (FISCAL YEAR) APPOINTMENTS, AT THE RATE OF $50 PER DAY, WHEN ACTUALLY EMPLOYED. EACH APPOINTMENT CONTAINS A LIMITATION ON THE NUMBER OF DAYS OF EMPLOYMENT. PURSUANT TO THE INFORMATION FURNISHED, LIEUTENANT DUNN WAS EMPLOYED AS FOLLOWS: EFFECTIVE MARCH 13, 1952, FOR NOT TO EXCEED JUNE 30, 1952, WITH A LIMITATION OF 15 DAYS OF EMPLOYMENT; EFFECTIVE JULY 1, 1952, FOR NOT TO EXCEED JUNE 30, 1953, WITH A LIMITATION OF 30 DAYS OF EMPLOYMENT; EFFECTIVE JULY 1, 1953, FOR NOT TO EXCEED JUNE 30, 1954, WITH A LIMITATION OF 30 DAYS OF EMPLOYMENT; EFFECTIVE JULY 1, 1954, FOR NOT TO EXCEED JUNE 30, 1955, WITH A LIMITATION OF 24 DAYS OF EMPLOYMENT, AND EFFECTIVE JULY 1, 1955, JULY 1, 1956, JULY 1, 1957, AND JULY 1, 1958, FOR PERIODS NOT TO EXCEED THE FISCAL YEAR INVOLVED, WITH A LIMITATION OF 90 DAYS OF EMPLOYMENT DURING EACH SUCH 12-MONTH PERIOD.

LIEUTENANT DUNN'S GROSS RETIRED PAY IS REPORTED AS FOLLOWS:

CHART

GROSS

MONTHLY GROSS ANNUAL

PERIOD RATE RATE MAR. 13, 1952 TO APR. 30, 1952

$181.13 $2,173.56 MAY 1, 1952 TO MAR. 31, 1955-------- --- 188.38 2,260.56 APR. 1, 1955 TO MAY 31, 1958------------ 199.68 2,396.16 JUNE 1, 1958----------------------------- 211.66 2,539.92

YOU SAY THAT RETIRED PAY HAS BEEN PAID LIEUTENANT DUNN FOR EACH DAY HE WAS NOT EMPLOYED BY THE OFFICE OF THE SURGEON GENERAL, AND THAT HE WILL CONTINUE TO BE PAID ON THIS BASIS PENDING RECEIPT OF OUR DECISION IN THIS MATTER.

SECTION 212 OF THE ECONOMY ACT OF 1932, 47 STAT. 406, PROVIDED THAT AFTER JUNE 30, 1932, NO PERSON HOLDING A CIVILIAN OFFICE OR POSITION UNDER THE UNITED STATES GOVERNMENT SHOULD 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 OF THE UNIFORMED SERVICES AT A RATE IN EXCESS OF THE 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 $3,000. SUBSECTION (B) OF THAT SECTION, 5 U.S.C. 59A (B), PROVIDED THAT THIS SECTION "SHALL NOT APPLY TO PERSON WHOSE RETIRED PAY, PLUS CIVILIAN PAY, AMOUNTS TO LESS THAN $3,000.' SEE, IN THIS CONNECTION, PUBLIC LAW 239, 84TH CONGRESS, STAT. 497, 5 U.S.C. 59A, INCREASING THE LIMITATION ON THE TOTAL RATE FROM BOTH SOURCES FROM $3,000 TO $10,000, EFFECTIVE AUGUST 4, 1955.

THE LIMITATION IN SECTION 212 HAS REFERENCE SPECIFICALLY TO THE COMBINED RATE OF COMPENSATION IN THE CIVILIAN POSITION AND RETIRED PAY, AND IT IS THE ANNUAL RATE OF COMPENSATION THAT 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 THEREOF. 12 COMP. GEN. 256. WHEN THE CIVILIAN EMPLOYMENT IS ON A "WHEN ACTUALLY EMPLOYED" BASIS AND THE HOURS OR DAYS OF EMPLOYMENT SPECIFICALLY ARE LIMITED IN THE EMPLOYMENT CONTRACT SO THAT THE TOTAL AMOUNT OF RETIRED PAY, PLUS CIVILIAN COMPENSATION, THAT POSSIBLY COULD BE PAID DURING THE YEAR DOES NOT EXCEED THE PRESCRIBED LIMITATION, SECTION 212 IS NOT APPLICABLE. 20 COMP. GEN. 407; 36 ID. 689.

WHILE LIEUTENANT DUNN'S EMPLOYMENT CONTRACTS CONTAIN A LIMITATION ON THE NUMBER OF DAYS OF EMPLOYMENT, NEVERTHELESS THEY PERMIT HIM TO EARN AN AMOUNT WHICH, WHEN COMBINED WITH HIS RETIRED PAY, EXCEEDS THE ANNUAL RATE OF $3,000 FOR ONE-YEAR PERIODS FROM MARCH 13, 1952, TO JUNE 30, 1955. HENCE, DURING THIS PERIOD HIS RETIRED PAY PROPERLY WAS WITHHELD ON THOSE DAYS FOR WHICH HE RECEIVED COMPENSATION FROM HIS CIVILIAN POSITION. COMP. GEN. 381. AFTER JUNE 30, 1955, THE NUMBER OF DAYS PERMITTED TO BE WORKED WAS LIMITED TO 90 IN EACH FISCAL YEAR, WHICH, AT THE RATE OF $50 PER DAY, AMOUNTED TO $4,500 PER ANNUM. THAT SUM, WHEN COMBINED WITH THE OFFICER'S ANNUAL RETIRED PAY, TOTALS MORE THAN THE LIMITATION IN SECTION 212 OF $3,000, BUT LESS THAN THE LIMITATION THEREIN OF $10,000 EFFECTIVE AUGUST 4, 1955. THEREFORE, IT APPEARS THAT NEITHER LIEUTENANT DUNN'S CIVILIAN COMPENSATION NOR HIS RETIRED PAY IS SUBJECT TO REDUCTION UNDER SECTION 212 OF THE ECONOMY ACT 1932, AS AMENDED, AFTER AUGUST 3, 1955. SEE 36 COMP. GEN. 689; B-128975, SEPTEMBER 11, 1956, AND COMPARE 25 COMP. GEN. 464, 466; 26 ID. 160, 162.

THE SECOND CASE IS THAT OF COMMANDER NOBLE. IT IS REPORTED THAT THE OFFICER WAS PLACED ON THE RETIRED LIST EFFECTIVE JANUARY 1, 1947, BY REASON OF PHYSICAL DISABILITY PURSUANT TO 34 U.S.C. 417 AND 350G (A) (1946 USED.), AND THAT THE PROVISIONS OF SECTION 212 OF THE ECONOMY ACT OF 1932, AS AMENDED, ARE APPLICABLE FOR THE SAME REASON AS IN LIEUTENANT DUNN'S CASE.

IT IS FURTHER REPORTED THAT COMMANDER NOBLE WAS EMPLOYED ON A FULL TIME BASIS BY THE UNITED STATES ARMY ENGINEER DISTRICT, SAN FRANCISCO CORPS OF ENGINEERS, FROM OCTOBER 8, 1956, THROUGH OCTOBER 12, 1957; THAT HIS EMPLOYMENT WAS FORMALLY CHANGED TO PART-TIME (FROM 5 DAYS AT 40 HOURS PER WEEK TO 5 DAYS AT 30 HOURS PER WEEK), OCTOBER 13, 1957, AND THAT HE RESIGNED FROM SUCH CIVILIAN POSITION EFFECTIVE JULY 19, 1958.

THE STATEMENT FURNISHED REGARDING HIS EMPLOYMENT IS AS FOLLOWS:

CHART

COMBINED COMBINED

RETIRED PAY RETIRED PAY

FULL-TIME PART-TIME AND AND

ANNUAL ANNUAL FULL-TIME PART-TIME

COMPENSATION COMPENSATION COMPENSATION COMPENSATION

ANNUAL

PERIOD RETIRED-PAY OCT. 8, 1956 TO

MAY 11, 1957--- $3,415.00--------- $6,037.20 $9,452.20 --------- MAY 12, 1957 TO

OCT. 12, 1957-- 3,925.00 --------- 6,037.20 9,962.20 --------- OCT. 13, 1957 TO OCT. 26, 1957--- 3,925.00 $2,948.40 6,037.20 9,962.20 $8,985.60 OCT. 27, 1957 TO

MAY 31, 1958--- 4,890.00 3,666.00 6,037.20 10,927.20 9,703.20JUNE 1, 1958 TO

JUNE 19, 1958-- 4,890.00 3,666.00 6,399.48 11,289.48 10,065.48 JUNE 20, 1958 TO

JULY 19, 1958-- 5,390.00 4,056.00 6,399.48 11,789.48 10,455.48

FOR THE PERIOD PRIOR TO JANUARY 5, 1958, COMMANDER NOBLE WAS RECEIVING RETIRED PAY IN AN AMOUNT WHICH, WHEN ADDED TO THE CIVILIAN COMPENSATION RECEIVED, COMPUTED ON THE BASIS OF HIS PART-TIME EMPLOYMENT, DID NOT EXCEED THE $10,000 LIMITATION OF SECTION 212. ACCORDINGLY, NO ADJUSTMENT OF HIS RETIRED PAY AND CIVILIAN COMPENSATION APPEARS TO BE REQUIRED FOR THE PERIOD PRIOR TO THAT DATE.

YOU STATE THAT COMMANDER NOBLE'S CIVILIAN SALARY RATE, ON THE BASIS OF PART-TIME EMPLOYMENT, WAS INCREASED FROM $3,666 TO $4,056 PER ANNUM, RETROACTIVE TO JANUARY 5, 1958, BY THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958, 72 STAT. 203, APPROVED JUNE 20, 1958, AND THAT HIS RETIRED PAY WAS INCREASED FROM $6,037.20 TO $6,399.48 PER ANNUM EFFECTIVE JUNE 1, 1958. IT IS FURTHER STATED HOWEVER, THAT THE RETROACTIVE INCREASE IN CIVILIAN COMPENSATION WAS NOT CONSIDERED VALID IN THIS CASE IN VIEW OF OUR DECISION OF AUGUST 4, 1958, 38 COMP. GEN. 103. GENERALLY, UNDER THE PROVISIONS OF SECTION 212 OF THE ECONOMY ACT, AS AMENDED, WHEN THE RETIRED PAY IS LESS THAN $10,000 PER ANNUM BUT THE SALARY RATE OF THE CIVILIAN POSITION PLUS RETIRED PAY EXCEEDS THE $10,000 LIMITATION, IT IS REQUIRED THAT THE FULL SALARY OF THE CIVILIAN BE PAID, AND THAT THE DEDUCTION TO BRING THE RATE OF COMPENSATION AND RETIRED PAY WITHIN THE $10,000 LIMITATION FIXED BY SECTION 212 BE MADE FROM THE RETIRED PAY. CF. 21 COMP. GEN. 1129; 26 ID. 231.

IN THE DECISION OF AUGUST 4, 1958, CITED ABOVE, THERE WAS CONSIDERED THE CASE OF AN OFFICER RETIRED FOR DISABILITY BUT WHO WAS SUBJECT TO THE LIMITATIONS OF SECTION 212 OF THE 1932 ACT. IMMEDIATELY PRIOR TO ENACTMENT OF THE ACT OF JUNE 20, 1958, HE WAS IN RECEIPT OF CIVILIAN COMPENSATION AT THE PER ANNUM RATE OF $6,390 PLUS RETIRED PAY AT A REDUCED RATE OF $3,610, MAKING A TOTAL ANNUAL RATE OF $10,000. SINCE TO HAVE GIVEN EFFECT TO THE RETROACTIVE PROVISIONS OF SECTION 17 (A) OF THE SALARY INCREASE ACT, 72 STAT. 215, WOULD HAVE OPERATED RETROACTIVELY TO INCREASE THE EMPLOYEE'S TAXABLE CIVILIAN COMPENSATION AND HAVE REQUIRED A CORRESPONDING RETROACTIVE REDUCTION IN HIS NONTAXABLE RETIRED PAY, THUS CREATING AN INDEBTEDNESS TO THE UNITED STATES, IT WAS HELD THAT THE RETROACTIVE PROVISIONS DO NOT APPLY IN THAT SITUATION.

IN THE CASE OF COMMANDER NOBLE, HOWEVER, WITHOUT THE BENEFIT OF THE RETROACTIVE INCREASE IN CIVILIAN COMPENSATION HIS COMBINED RATE OF RETIRED PAY AND CIVILIAN COMPENSATION FOR THE PERIOD JANUARY 5 TO MAY 31, 1958, WAS LESS THAN THE $10,000 LIMIT ($9,703.20). HENCE, TO GIVE EFFECT TO THE RETROACTIVE PROVISIONS OF SECTION 17 (A) AND PAY HIM CIVILIAN COMPENSATION AT THE AUTHORIZED ANNUAL RATE OF $4,056 FOR THE PERIOD JANUARY 5 TO JUNE 19, 1958, WITH THE NECESSARY REDUCTION IN HIS RETIRED PAY SO AS NOT TO EXCEED THE $10,000 LIMITATION APPARENTLY WOULD RESULT IN AN INCREASE IN HIS TOTAL COMPENSATION AND BE TO HIS ADVANTAGE EVEN THOUGH IT WILL RESULT IN A REDUCTION IN THE AMOUNT OF RETIRED PAY HE WILL BE ENTITLED TO RETAIN FOR SUCH PERIOD. ACCORDINGLY, IF IT BE DETERMINED THAT TO GIVE EFFECT TO THE RETROACTIVE PROVISIONS OF SECTION 17 (A) OF THE 1958 ACT WILL NOT OPERATE TO DIVEST COMMANDER NOBLE OF RETIRED PAY AND COMPENSATION THAT ACCRUED DURING SUCH PERIOD BUT, INSTEAD, WILL OPERATE TO INCREASE HIS TOTAL COMPENSATION FOR THAT PERIOD (CONSIDERATION BEING GIVEN TO ANY TAX ADJUSTMENT THAT MAY BE NECESSITATED), APPROPRIATE ACTION SHOULD BE TAKEN TO HAVE HIS RETIRED PAY AND CIVILIAN COMPENSATION ADJUSTED ON THAT BASIS. SINCE HIS ANNUAL RATE OF CIVILIAN COMPENSATION FOR SUCH RETROACTIVE PERIOD WOULD BE $4,056, HIS RETIRED PAY WOULD HAVE TO BE REDUCED TO AN ANNUAL RATE OF $5,944 SO AS NOT TO EXCEED THE $10,000 LIMITATION.