B-141991, MAY 11, 1960

B-141991: May 11, 1960

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IT APPEARS THAT YOU ARE ENTITLED TO RECEIVE RETIRED PAY UNDER AUTHORITY OF 10 U.S.C. 456. SUCH RETIRED PAY WAS AT THE MONTHLY RATE OF $165. IT FURTHER APPEARS THAT YOU WERE RECEIVING CIVILIAN GOVERNMENT SALARY AT THE RATE OF $7. WAS LESS THAN $10. YOU WERE NOT FOR THAT PERIOD SUBJECT TO THE LIMITATION PROVISIONS OF SECTION 212 OF THE ECONOMY ACT OF 1932. THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958 WAS ENACTED ON JUNE 20. YOUR CIVILIAN GOVERNMENT SALARY WAS INCREASED. PROSPECTIVELY THE RULE IS THAT WHEN THE COMBINED AMOUNTS OF MILITARY RETIRED PAY AND CIVILIAN GOVERNMENT SALARY EXCEED THE LIMITATION THEREIN PRESCRIBED ($3. THE INDIVIDUAL CONCERNED IS ENTITLED TO RECEIVE ALL HIS CIVILIAN GOVERNMENT SALARY AND THE AMOUNT OF MILITARY RETIRED PAY IS REDUCED TO THE EXTENT REQUIRED IN ORDER TO REMAIN WITHIN THE MONETARY RESTRICTIONS OF SECTION 212.

B-141991, MAY 11, 1960

TO MR. JAMES C. ETHRIDGE:

YOUR LETTER OF JANUARY 30, 1960, REQUESTS RECONSIDERATION OF GENERAL ACCOUNTING OFFICE SETTLEMENT DATED DECEMBER 10, 1959, WHICH DISALLOWED YOUR CLAIM FOR $215.87, REPRESENTING THAT PORTION OF YOUR MILITARY RETIRED PAY WHICH YOU REFUNDED, UPON REQUEST, TO THE RETIRED PAY DIVISION, FINANCE CENTER, UNITED STATES ARMY, INDIANAPOLIS 49, INDIANA.

IT APPEARS THAT YOU ARE ENTITLED TO RECEIVE RETIRED PAY UNDER AUTHORITY OF 10 U.S.C. 456, 1946 ED., AS AN INCIDENT OF YOUR ACTIVE MILITARY SERVICE AND HONORABLE DISCHARGE THEREFROM AS A FIRST LIEUTENANT, ARMY OF THE UNITED STATES, ON NOVEMBER 15, 1944, BECAUSE OF PHYSICAL DISABILITY. SUCH RETIRED PAY WAS AT THE MONTHLY RATE OF $165,36 ($1,984.32 PER YEAR) DURING THE PERIOD JANUARY 12 TO MAY 31, 1958, INCLUSIVE, AND AT THE MONTHLY RATE OF $175.28 ($2,103.36 PER YEAR) DURING THE PERIOD JUNE 1 TO JULY 31, 1958, INCLUSIVE. IT FURTHER APPEARS THAT YOU WERE RECEIVING CIVILIAN GOVERNMENT SALARY AT THE RATE OF $7,465 PER YEAR FROM JANUARY 1 12 TO FEBRUARY 22, 1958, INCLUSIVE, AND AT THE RATE OF $7,680 PER YEAR COMMENCING FEBRUARY 23, 1958. SINCE THE COMBINED ANNUAL RATE OF YOUR MILITARY RETIRED PAY AND YOUR CIVILIAN GOVERNMENT SALARY DURING THE PERIOD JANUARY 12 TO JUNE 19, 1958, INCLUSIVE, WAS LESS THAN $10,000 PER YEAR, YOU WERE NOT FOR THAT PERIOD SUBJECT TO THE LIMITATION PROVISIONS OF SECTION 212 OF THE ECONOMY ACT OF 1932, AS AMENDED, 5 U.S.C. 59A, 1958 ED.

THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958 WAS ENACTED ON JUNE 20, 1958, AND UNDER SECTION 17 (A) OF THAT ACT, 72 STAT. 215, YOUR CIVILIAN GOVERNMENT SALARY WAS INCREASED, RETROACTIVELY, TO $8,230 PER YEAR FOR THE PERIOD JANUARY 12 TO FEBRUARY 22, 1958, INCLUSIVE, AND TO $8,470 PER YEAR EFFECTIVE FROM FEBRUARY 23, 1958. AS A RESULT OF SUCH INCREASE THE TOTAL COMBINED ANNUAL RATE OF YOUR MILITARY RETIRED PAY AND YOUR CIVILIAN GOVERNMENT SALARY EXCEEDED, RETROACTIVELY EFFECTIVE FROM JANUARY 12, 1958, THE $10,000 LIMITATION PRESCRIBED IN SECTION 212, ECONOMY ACT OF 1932, AS AMENDED.

IN APPLYING SECTION 212, PROSPECTIVELY THE RULE IS THAT WHEN THE COMBINED AMOUNTS OF MILITARY RETIRED PAY AND CIVILIAN GOVERNMENT SALARY EXCEED THE LIMITATION THEREIN PRESCRIBED ($3,000 PER ANNUM PRIOR TO AUGUST 4, 1955, AND $10,000 PER ANNUM EFFECTIVE FROM AUGUST 4, 1955--- SEE THE ACT OF AUGUST 4, 1955, 69 STAT. 498), THE INDIVIDUAL CONCERNED IS ENTITLED TO RECEIVE ALL HIS CIVILIAN GOVERNMENT SALARY AND THE AMOUNT OF MILITARY RETIRED PAY IS REDUCED TO THE EXTENT REQUIRED IN ORDER TO REMAIN WITHIN THE MONETARY RESTRICTIONS OF SECTION 212. COMPARE 21 COMP. GEN. 1120, 131; 38 ID. 774, 777. THEREFORE, IF THE SALARY INCREASES HAD BEEN PROSPECTIVELY EFFECTIVE ONLY YOUR ENTITLEMENT TO CIVILIAN GOVERNMENT SALARY AT THE RATE OF $8,230 PER YEAR FOR THE PERIOD JANUARY 12 TO FEBRUARY 22, 1958, INCLUSIVE, WOULD HAVE REQUIRED A REDUCTION IN THE AMOUNT OF YOUR MILITARY RETIRED PAY TO AN ANNUAL RATE OF $1,770. SIMILARLY, YOUR RIGHT TO CIVILIAN GOVERNMENT SALARY AT THE RATE OF $8,470 PER YEAR EFFECTIVE FROM FEBRUARY 23, 1958, WOULD HAVE REDUCED YOUR ENTITLEMENT TO MILITARY RETIRED PAY TO A MAXIMUM AMOUNT OF $1,530 PER YEAR.

THE AMOUNT OF $215.87, WHICH IS REPORTED TO HAVE BEEN REFUNDED BY YOU, AND WHICH YOU NOW ARE CLAIMING WAS COMPUTED ON THE FOREGOING BASIS AND REPRESENTS THE DIFFERENCE IN THE AMOUNT OF MILITARY RETIRED PAY ACTUALLY PAID TO YOU DURING THE PERIOD FROM JANUARY 12 TO JULY 31, 1958, INCLUSIVE, AND THE MAXIMUM AMOUNT OF SUCH MILITARY RETIRED PAY TO WHICH YOU WOULD LEGALLY HAVE BEEN ENTITLED ON A PROSPECTIVE BASIS. THE METHOD FOLLOWED DOES NOT ACCORD WITH THAT SET FORTH IN 38 COMP. GEN. 103.

FOLLOWING THE ABOVE-CITED DECISION, ONLY THAT PART OF YOUR MILITARY RETIRED PAY WHICH PERTAINS TO THE PERIOD PRECEDING JUNE 20, 1958, THE DATE OF ENACTMENT OF THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958, PROPERLY MAY BE VIEWED AS HAVING VESTED IN YOU AND IS NOT SUBJECT TO IMPAIRMENT BY THE RETROSPECTIVE PROVISIONS OF THE 1958 LAW. 31 COMP. GEN. 619, 623; 34 ID. 149; 38 ID. 103.

YOUR LETTER SUGGESTS THAT YOU DESIRE TO APPLY TO YOUR CASE THE RULE LAID DOWN IN 38 COMP. GEN. 103. APPLYING THAT RULE TO YOUR SITUATION, THE RETROACTIVE INCREASE IN SALARY AUTHORIZED BY SECTION 17 (A) OF FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958 AMOUNTING TO $349.68 FOR THE PERIOD JANUARY 12 THROUGH JUNE 19, 1958, WOULD BE FOR REFUND BY YOU. ADDITIONALLY, THERE WOULD BE FOR RETENTION BY THE GOVERNMENT THAT AMOUNT OF RETIRED PAY WHICH CAUSED AN EXCESS OVER $10,000 TO BE PAID YOU DURING THE PERIOD JUNE 20 THROUGH JULY 31, 1958, AMOUNTING TO $37.52. THUS, IN ADJUSTING THE GROSS AMOUNTS OF SALARY AND RETIRED PAY THE GOVERNMENT WOULD BE ENTITLED TO THE RETROACTIVE SALARY INCREASE PLUS EXCESS RETIRED PAY ($349.68 PLUS $37.52) EQUAL TO $387.20 WHILE YOU WOULD BE ENTITLED TO A REFUND OF $215.87, PLUS WHATEVER INCOME TAX REFUND THE INTERNAL REVENUE SERVICE MIGHT MAKE ON YOUR APPLICATION BECAUSE OF THE REDUCTION IN SALARY AMOUNTING TO $349.68. 38 COMP. GEN. 103.

WHILE IT APPEARS THAT EXERCISE OF YOUR VESTED RIGHT TO FULL RETIRED PAY DURING THE PERIOD OF RETROACTIVE SALARY INCREASE MAY OPERATE TO YOUR DISADVANTAGE, YET IF IT BE YOUR DESIRE THAT WE EFFECT THE ADJUSTMENT, IT WILL BE NECESSARY FOR YOU TO REFUND THE DIFFERENCE BETWEEN $387.20 AND $215.87, OR $171.33, BY CHECK OR MONEY ORDER PAYABLE TO THE GENERAL ACCOUNTING OFFICE. WE SHALL HOLD IN ABEYANCE ACTION ON YOR REQUEST PENDING RECEIPT OF FURTHER WORD FROM YOU.