B-146567, OCTOBER 2, 1961, 41 COMP. GEN. 218

B-146567: Oct 2, 1961

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PUBLIC LAW 86-146) WHICH SHOWS THAT THE PURPOSE OF THE PROVISION WAS TO PREVENT GRATUITOUS BENEFITS FROM ACCUMULATING AND PASSING ON DEATH TO RELATIVES HAVING NO CLAIM AGAINST THE GOVERNMENT ON ACCOUNT OF THE VETERAN'S MILITARY SERVICE. GEN. 666 THE BENEFICIARY DISTRIBUTION PROVISIONS IN 38 U.S.C. 3203 (A) (2) WERE HELD NOT TO BE APPLICABLE TO MILITARY RETIRED PAY THAT DECISION IS NOT TO BE CONSTRUED TO EXEMPT THE RETIRED PAY OF DECEASED INCOMPETENT RETIRED MILITARY PERSONNEL WITHOUT DEPENDENTS FROM REVERSION TO THE TREASURY. 1961: REFERENCE IS MADE TO YOUR LETTER OF JULY 20. DO-MC-596) A DECISION AS TO WHETHER OR NOT YOU ARE AUTHORIZED TO PAY TO THE DESIGNATED BENEFICIARIES OF THE LATE SERGEANT GEORGE E.

B-146567, OCTOBER 2, 1961, 41 COMP. GEN. 218

DECEDENTS' ESTATES - PAY, ETC., DUE MILITARY PERSONNEL - AMOUNTS WITHHELD FROM HOSPITALIZED VETERANS - RETIRED PAY V. PENSIONS, ETC. - INSANE AND INCOMPETENT MEMBERS THE LANGUAGE OF 38 U.S.C. 3203 (B) (1) CONCERNING REVISION TO THE TREASURY OF "COMPENSATION OR RETIREMENT PAY" WITHHELD FROM MENTALLY INCOMPETENT VETERANS, WITHOUT DEPENDENTS, WHO DIE WHILE BEING HOSPITALIZED IN A VETERANS FACILITY, TOGETHER WITH ITS LEGISLATIVE HISTORY (ACT OF AUGUST 7, 1959, PUBLIC LAW 86-146) WHICH SHOWS THAT THE PURPOSE OF THE PROVISION WAS TO PREVENT GRATUITOUS BENEFITS FROM ACCUMULATING AND PASSING ON DEATH TO RELATIVES HAVING NO CLAIM AGAINST THE GOVERNMENT ON ACCOUNT OF THE VETERAN'S MILITARY SERVICE, REQUIRES THE CONCLUSION THAT CONGRESS INTENDED THE PROVISION TO BE APPLICABLE TO RETIRED PAY AND WHILE IN DECISION 40 COMP. GEN. 666 THE BENEFICIARY DISTRIBUTION PROVISIONS IN 38 U.S.C. 3203 (A) (2) WERE HELD NOT TO BE APPLICABLE TO MILITARY RETIRED PAY THAT DECISION IS NOT TO BE CONSTRUED TO EXEMPT THE RETIRED PAY OF DECEASED INCOMPETENT RETIRED MILITARY PERSONNEL WITHOUT DEPENDENTS FROM REVERSION TO THE TREASURY.

TO MAJOR JOHN A. RAPP, UNITED STATES MARINE CORPS, OCTOBER 2, 1961:

REFERENCE IS MADE TO YOUR LETTER OF JULY 20, 1961, REQUESTING (UNDER DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE SUBMISSION NO. DO-MC-596) A DECISION AS TO WHETHER OR NOT YOU ARE AUTHORIZED TO PAY TO THE DESIGNATED BENEFICIARIES OF THE LATE SERGEANT GEORGE E. WATERS, 670368, RETIRED, THE AMOUNT WITHHELD FROM HIS RETIRED PAY UNDER 38 U.S.C. 3203 (A) (1).

YOU STATE THAT SERGEANT WATERS, A MENTALLY INCOMPETENT RETIRED MEMBER OF THE U.S. MARINE CORPS, DIED ON SEPTEMBER 18, 1960, WHILE BEING FURNISHED HOSPITAL TREATMENT BY THE VETERANS ADMINISTRATION AND THAT FROM JULY 1, 1957, THROUGH THE DATE OF DEATH ONE-HALF OF HIS RETIRED PAY HAD BEEN WITHHELD UNDER THE PROVISIONS OF 38 U.S.C. 3203 (A) (1).

SECTION 3203 (A) (1) OF TITLE 38, U.S.C. REQUIRES THE TEMPORARY WITHHOLDING OF 50 PERCENT OF THE "COMPENSATION OR RETIREMENT PAY" FROM ANY VETERAN WHO HAS NEITHER WIFE, CHILD, NOR DEPENDENT PARENT AND WHO IS BEING FURNISHED HOSPITAL TREATMENT, INSTITUTIONAL OR DOMICILIARY CARE BY THE VETERANS ADMINISTRATION AND PROVIDES FOR THE PAYMENT TO THE VETERAN OF AMOUNTS SO WITHHELD UPON RELEASE FROM THE FACILITIES CONCERNED. IF THE VETERAN DIES BEFORE RECEIVING PAYMENT, SECTION 3203 (A) (2) (A) PROVIDES FOR PAYMENT OF AMOUNTS WITHHELD TO CERTAIN BENEFICIARIES THERE PRESCRIBED. SECTION 3203 (B) (1) PROVIDES THAT THE "COMPENSATION OR RETIREMENT PAY" OF A MENTALLY INCOMPETENT VETERAN WITHOUT WIFE, CHILD, OR DEPENDENT PARENT IS SUBJECT TO THE TEMPORARY WITHHOLDING PROVISION IN SECTION 3203 (A) (1) BUT THAT, IN THE EVENT OF THE VETERAN'S DEATH BEFORE PAYMENT OF THE LUMP SUM, NO PART THEREOF SHALL BE PAYABLE. SECTION 3203 (B) (2) PROVIDES FOR THE SUSPENSION OF PAYMENTS OF "PENSION, COMPENSATION, OR EMERGENCY OFFICERS' RETIREMENT PAY" MADE ON BEHALF OF THE INCOMPETENT VETERAN WHEN HIS ESTATE FROM ANY SOURCE AMOUNTS TO $1,500 UNTIL HIS ESTATE IS REDUCED TO $500.

FOR THE REASONS STATED IN OUR DECISION OF JUNE 7, 1961, 40 COMP. GEN. 666, WE HELD THAT IN THE CASES OF DECEASED VETERANS WHOSE BENEFITS HAD BEEN PARTIALLY WITHHELD UNDER SECTION 3203 (A) (1), ONLY THOSE BENEFITS WHICH ACCRUE UNDER LAWS ADMINISTERED BY THE VETERANS ADMINISTRATION ARE SUBJECT TO DISTRIBUTION UNDER THE PROVISIONS OF SECTION 3203 (A) (2) (A) AND THAT RETIRED PAY SO WITHHELD IS TO BE PAID UNDER 10 U.S.C. 2771.

IN VIEW OF THAT DECISION YOU REQUEST A DECISION WHETHER YOU ARE AUTHORIZED TO PAY THE AMOUNT SO WITHHELD UNDER 3203 (B) (1) TO THE BENEFICIARY PRESCRIBED IN 10 U.S.C. 2771. YOU STATE THAT YOUR DOUBT RESULTS FROM THE FACT THAT OUR DECISION OF JUNE 7, 1961, DOES NOT DEAL WITH THE REVERSION PROVISION OF SECTION 3203 (B) (1) AND THAT YOU FIND IT DIFFICULT TO BELIEVE THAT THE TERM ,RETIREMENT PAY" INCLUDES MILITARY RETIRED PAY FOR THE PURPOSES OF SECTION 3203 (A) (1/--- TEMPORARY WITHHOLDING--- BUT NOT FOR THE PURPOSES OF 3213 (B) (1/--- REVERSION TO THE TREASURY. THAT IS TO SAY, IF THE MILITARY SERVICES ARE NOT REQUIRED TO GIVE EFFECT TO THE REVERSION PROVISION IN SECTION 3203 (B) (1), IT WOULD SEEM THAT THEY SHOULD NOT BE REQUIRED TO GIVE EFFECT TO THE PROVISION IN SECTION 3203 (B) (1) WHICH SUBJECTS "RETIREMENT PAY" TO WITHHOLDING UNDER SECTION 3203 (A) (1).

PRIOR TO THE ENACTMENT OF SECTION 4 OF THE ACT OF JULY 19, 1939, 53 STAT. 1070, 38 U.S.C. 706B (1952 USED.), RETIRED OFFICERS AND ENLISTED MEN OF THE MILITARY SERVICES WERE ENTITLED TO HOSPITALIZATION IN VETERANS ADMINISTRATION HOSPITALS. THE 1939 ACT BROADENED THE RIGHT OF SUCH RETIRED PERSONNEL TO HOSPITAL AND DOMICILIARY CARE IN VETERANS ADMINISTRATION FACILITIES, BUT AT THE SAME TIME LIMITED THE AMOUNT OF RETIRED PAY THAT RETIRED MEN WITHOUT DEPENDENTS COULD RECEIVE WHILE IN SUCH FACILITIES. SEE 19 COMP. GEN. 431. THAT PROVISION OF LAW ORIGINATED IN THE SENATE. THE SENATE COMMITTEE ON FINANCE IN REPORTING THE BILL WHICH BECAME THE 1939 ACT (S. REPORT NO. 700, 76TH CONGRESS), STATED THAT RETIRED OFFICERS AND ENLISTED MEN "WOULD BE SUBJECT TO A REDUCTION IN RETIREMENT PAY" UNDER THE PROVISIONS OF VETERANS REGULATIONS APPLICABLE GENERALLY WITH RESPECT TO OTHER MONETARY BENEFITS OF VETERANS. IT IS CLEAR THAT THE CONGRESS INTENDED THAT PROVISION TO REACH MILITARY RETIRED PAY.

THE APPLICABLE VETERANS REGULATIONS AND THE 1939 LAW INSOFAR AS HERE MATERIAL WERE RE-ENACTED INTO POSITIVE LAW BY THE ACT OF AUGUST 8, 1946, 60 STAT. 908 (SEE 27 COMP. GEN. 699), WHICH IN TURN WAS REENACTED IN SECTION 1503 OF THE ACT OF JUNE 17, 1957, 71 STAT. 137, AND CODIFIED IN 38 U.S.C. 3203 BY THE ACT OF SEPTEMBER 2, 1958, 72 STAT. 1234. HENCE THE LEGISLATIVE HISTORY OF THE STATUTE FROM WHICH THE WITHHOLDING PROVISION IN 38 U.S.C. 3203 (A) (1) WAS DERIVED CLEARLY ESTABLISHES THAT IT WAS THE INTENT OF THE CONGRESS THAT SUCH WITHHOLDING PROVISION SHOULD BE APPLIED TO ALL MILITARY RETIRED PAY, AND NOT MERELY TO EMERGENCY OFFICERS' RETIREMENT PAY. 19 COMP. GEN. 431; 27 ID. 699.

IN 27 COMP. GEN. 699 WE HELD THAT RETIRED PAY GENERALLY (AS DISTINGUISHED FROM EMERGENCY OFFICERS' RETIREMENT PAY) WAS NOT SUBJECT TO THE PROVISIONS OF THE 1946 ACT REQUIRING THE TOTAL SUSPENSION OF BENEFITS WHEN THE VETERAN'S ESTATE REACHES THE PRESCRIBED AMOUNT, BECAUSE THAT SECTION MERELY SUPERSEDED A SIMILAR PROVISION IN PRIOR LAW (CONTAINED IN VETERANS REGULATIONS) WHICH WAS NOT APPLICABLE TO RETIRED MILITARY PERSONNEL. ACCORDINGLY, THAT PROVISION OF LAW AS NOW CODIFIED IN 38 U.S.C. 3203 (B) (2) APPLICABLE TO "PENSION, COMPENSATION, OR EMERGENCY OFFICERS' RETIREMENT PAY" DOES NOT REACH RETIRED PAY GENERALLY. THE PRESENT PROVISION IN 38 U.S.C. 3203 (B) (1) CONCERNING THE REVERSION TO THE TREASURY OF "COMPENSATION OR RETIREMENT PAY" WHERE THE INCOMPETENT VETERAN WITHOUT DEPENDENTS DIES WAS FIRST ENACTED INTO LAW BY THE ACT OF AUGUST 7, 1959, PUBLIC LAW 86-146, 73 STAT. 297, 298. THE LANGUAGE OF THAT STATUTE AS WELL AS ITS LEGISLATIVE HISTORY CLEARLY INDICATES THAT IT WAS THE INTENT OF CONGRESS THAT MILITARY RETIRED PAY GENERALLY SHOULD BE SUBJECT TO THAT PROVISION. WHILE SUBSECTION 3203 (B) (1) COVERS "COMPENSATION OR RETIREMENT PAY," SUBSECTION 3203 (B) (2) COVERS "PENSION, COMPENSATION, OR EMERGENCY OFFICERS' RETIREMENT PAY.' ( ITALICS SUPPLIED.)

THE REVERSION PROVISION IN THE 1959 ACT WAS CONSIDERED BY THE COMMITTEE ON VETERANS AFFAIRS OF THE HOUSE OF REPRESENTATIVES IN CONNECTION WITH H.R. 10478, 84TH CONGRESS, H.R. 72, 85TH CONGRESS, H.R. 4302, 86TH CONGRESS, AND H.R. 6319, 86TH CONGRESS, WHICH WAS A CLEAN BILL INTRODUCED AFTER HEARINGS WERE HELD ON H.R. 4302. H.R. 10478 AND H.R. 72 PROVIDED FOR THE REVERSION OF "EMERGENCY OFFICERS' RETIREMENT PAY, SERVICEMEN'S INDEMNITY, OR RETIREMENT PAY," ALL OF WHICH WERE REFERRED TO IN H. REPORT NOS. 2584, 84TH CONGRESS, AND 285, 85TH CONGRESS, RESPECTIVELY, ON THOSE BILLS AS ,GRATUITIES.' H.R. 4302 PROVIDED FOR THE REVERSION OF "PENSION, COMPENSATION, OR RETIREMENT PAY (INCLUDING EMERGENCY OFFICERS' RETIREMENT PAY, BUT NOT INCLUDING RETIRED PAY, WHERE SUCH TREATMENT OR CARE IS NOT FURNISHED BY THE VETERANS' ADMINISTRATION).'

IN CONSONANCE WITH OUR DECISION 27 COMP. GEN. 699, THE 1957 ACT AND THE 1958 CODIFICATION OF THE SUBSECTION NOW CONTAINING THE REVERSION APPLIED TO "PENSION, COMPENSATION, OR RETIREMENT PAY" WHEREAS THE SUSPENSION (38 U.S.C. 3203 (B) (2) ( PROVISION APPLIED TO "SUCH BENEFITS (EXCEPT RETIRED PAY, INCLUDING EMERGENCY OFFICERS' RETIREMENT PAY).' H.R. 6319, 86TH CONGRESS, WHICH BECAME THE 1959 AMENDMENT, APPLIES THE REVERSION PROVISION TO "COMPENSATION OR RETIREMENT PAY" BUT MAKES THE SUSPENSION PROVISION APPLICABLE TO "PENSION, COMPENSATION, OR EMERGENCY OFFICERS' RETIREMENT PAY.' AGAIN THE COMMITTEE REPORTS ON THE 1959 AMENDMENTS ADDING THE REVERSION PROVISION STATE THAT THE PURPOSE OF THE BILL IS TO PREVENT "GRATUITOUS BENEFITS" FROM ACCUMULATING AND PASSING ON DEATH TO RELATIVES HAVING NO CLAIM AGAINST THE GOVERNMENT ON ACC OF THE INCOMPETENT VETERANS' MILITARY SERVICE. IT THUS IS ABUNDANTLY CLEAR THAT THE CONGRESS INTENDED THE REVERSION PROVISION OF THE 1959 ACT TO REACH MILITARY RETIRED PAY GENERALLY.

IN OUR DECISION OF JUNE 7, 1961, FOR THE REASONS THERE STATED WE HELD THAT IN CASES OTHER THAN CASES OF INCOMPETENTS WITHOUT DEPENDENTS THE AMOUNTS OF MILITARY RETIRED PAY WITHHELD FROM RETIRED MEMBERS WHILE THEY ARE BEING CARED FOR IN VETERANS ADMINISTRATION FACILITIES SHOULD BE PAID TO THE PERSONS PRESCRIBED IN 10 U.S.C. 2771 RATHER THAN TO THE PERSONS PRESCRIBED IN 38 U.S.C. 3203 (A) (2), WHICH WE VIEWED AS LIMITED TO BENEFITS WHICH ACCRUE UNDER LAWS ADMINISTERED BY THE VETERANS ADMINISTRATION. THAT VIEW APPEARED TO BE IN CONSONANCE WITH THE INTEND OF THE CONGRESS, AND THERE APPEARS TO BE NO INDICATION IN THE LEGISLATIVE HISTORY OF THE PROVISION IN QUESTION THAT CONGRESS INTENDED THAT THE RETIRED PAY OF RETIRED MILITARY PERSONNEL BEING CARED FOR IN VETERANS ADMINISTRATION FACILITIES SHOULD BE PAID UNDER A LAW DIFFERENT FROM THAT APPLICABLE TO RETIRED MILITARY PERSONNEL GENERALLY. HENCE, OUR DECISION OF JUNE 7, 1961, IS NOT REGARDED AS A BASIS FOR EXEMPTING THE RETIRED PAY OF INCOMPETENT RETIRED MILITARY PERSONNEL WITHOUT DEPENDENTS FROM REVERSION TO THE TREASURY, SINCE BOTH THE LANGUAGE OF THE STATUTE AND THE LEGISLATIVE HISTORY OF THAT PROVISION INDICATE A LEGISLATIVE INTENT THAT SUCH RETIRED PAY SHOULD REVERT TO THE TREASURY IN SUCH CASES.

IT IS OUR VIEW THAT SECTION 3203 (B) (1) AS AMENDED BY THE 1959 ACT PROHIBITS THE PAYMENT OF AMOUNTS OF RETIRED PAY WITHHELD IN THE CASE OF SERGEANT WATERS TO ANYONE. YOUR QUESTION IS ANSWERED ACCORDINGLY.