B-146599, DECEMBER 5, 1961, 41 COMP. GEN. 384

B-146599: Dec 5, 1961

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WHOSE DECISIONS ON QUESTIONS OF LAW OR FACT CONCERNING BENEFITS OR PAYMENTS UNDER LAWS ADMINISTERED BY THE VETERANS ADMINISTRATION ARE FINAL UNDER 38 U.S.C. 211 (A). DETERMINE THAT AN ELECTION OF READJUSTMENT PAY WAS NOT A VALID ELECTION AND THAT THE VETERAN IS ENTITLED TO DISABILITY COMPENSATION. THE VETERAN IS ENTITLED TO DISABILITY COMPENSATION. THE VETERAN IS TO BE REGARDED AS INDEBTED FOR THE FULL AMOUNT OF THE READJUSTMENT PAYMENT AND STEPS SHOULD BE TAKEN TO EFFECT COLLECTION OF THE FULL AMOUNT OF THE DEBT BEFORE PAYMENT OF ANY DISABILITY COMPENSATION IS MADE. A DISCUSSION PERTAINING TO THE MATTER IS CONTAINED IN COMMITTEE ACTION NO. 289 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE.

B-146599, DECEMBER 5, 1961, 41 COMP. GEN. 384

PAY - READJUSTMENT PAYMENT TO RESERVISTS ON INVOLUNTARY RELEASE - ELECTION VALIDITY ALTHOUGH A MEMBER OF A RESERVE COMPONENT OF THE UNIFORMED SERVICES WHO UPON INVOLUNTARY RELEASE FROM ACTIVE DUTY ELECTED TO RECEIVE A LUMP SUM READJUSTMENT PAYMENT UNDER THE ARMED FORCES RESERVE ACT OF 1952, 50 U.S.C. 1016, RATHER THAN PAYMENT OF DISABILITY COMPENSATION BY THE VETERANS ADMINISTRATION, MAY NOT BE PERMITTED TO CHANGE THE ELECTION FOR ENTITLEMENT TO ALTERNATE BENEFITS UNDER OTHER PROVISIONS OF LAW, SHOULD THE ADMINISTRATOR OF VETERANS AFFAIRS, WHOSE DECISIONS ON QUESTIONS OF LAW OR FACT CONCERNING BENEFITS OR PAYMENTS UNDER LAWS ADMINISTERED BY THE VETERANS ADMINISTRATION ARE FINAL UNDER 38 U.S.C. 211 (A), DETERMINE THAT AN ELECTION OF READJUSTMENT PAY WAS NOT A VALID ELECTION AND THAT THE VETERAN IS ENTITLED TO DISABILITY COMPENSATION, THE VETERAN IS ENTITLED TO DISABILITY COMPENSATION, THE VETERAN IS TO BE REGARDED AS INDEBTED FOR THE FULL AMOUNT OF THE READJUSTMENT PAYMENT AND STEPS SHOULD BE TAKEN TO EFFECT COLLECTION OF THE FULL AMOUNT OF THE DEBT BEFORE PAYMENT OF ANY DISABILITY COMPENSATION IS MADE.

TO THE SECRETARY OF DEFENSE, DECEMBER 5, 1961:

THE ASSISTANT SECRETARY OF DEFENSE ( COMPTROLLER), BY LETTER OF AUGUST 4, 1961, REQUESTED A DECISION AS TO WHETHER A PERSON WHO HAS ELECTED AND BEEN PAID READJUSTMENT PAY UNDER THE PROVISIONS OF PUBLIC LAW 676, 84TH CONGRESS, 50 U.S.C. 1016, MAY BE PERMITTED TO REFUND THE READJUSTMENT PAY AND ELECT PAYMENT OF DISABILITY COMPENSATION UNDER LAWS ADMINISTERED BY THE VETERANS ADMINISTRATION. A DISCUSSION PERTAINING TO THE MATTER IS CONTAINED IN COMMITTEE ACTION NO. 289 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, A COPY OF WHICH WAS TRANSMITTED WITH THE LETTER OF AUGUST 4, 1961.

THE DISCUSSION IN COMMITTEE ACTION NO. 289 STATES THAT THE DEPARTMENT OF THE ARMY HAS SEVERAL CASES WHEREIN AN ELECTION WAS MADE TO RECEIVE READJUSTMENT PAY UNDER THE PROVISIONS OF PUBLIC LAW 676, 84TH CONGRESS, AND THE FORMER MEMBERS ARE NOW ATTEMPTING TO QUALIFY OR ARE CURRENTLY RECEIVING COMPENSATION FROM THE VETERANS ADMINISTRATION, WHICH IS REIMBURSING THE DEPARTMENT OF THE ARMY FOR THE READJUSTMENT PAY RECEIVED BY THE MEMBER AT THE TIME OF RELEASE FROM ACTIVE DUTY. IN OTHER CASES, THE FORMER MEMBERS ARE ATTEMPTING DIRECT REIMBURSEMENT OF READJUSTMENT PAY TO THE ARMY WITH THE INTENT OF ELECTING PAYMENT OF DISABILITY COMPENSATION FROM THE VETERANS ADMINISTRATION BASED UPON A DISABILITY RATING AWARDED BY THE VETERANS ADMINISTRATION SUBSEQUENT TO THEIR RELEASE FROM ACTIVE DUTY.

IT IS ALSO STATED IN THE DISCUSSION THAT IN ONE CASE A STATEMENT THAT THE MEMBER ELECTED TO RECEIVE READJUSTMENT PAY CANNOT BE LOCATED, BUT THE RECORDS SHOW THAT THE ELECTION WAS MADE. IN ANOTHER CASE THE RECORDS CONTAIN A SIGNED STATEMENT THAT THE MEMBER, HAVING BEEN ADVISED THAT HE MAY NOT RECEIVE EITHER SEVERANCE PAY FROM THE ARMY OR DISABILITY COMPENSATION FROM THE VETERANS ADMINISTRATION IN ADDITION TO READJUSTMENT PAY, APPLIED FOR DISABILITY COMPENSATION AND THE VETERANS ADMINISTRATION, AFTER REVIEW OF THE CIRCUMSTANCES, RULED THAT THE VETERAN WAS ENTITLED TO AN ELECTION OF DISABILITY COMPENSATION AND THAT SUCH COMPENSATION WOULD BE PAID IF THE VETERAN VOIDED THE PAYMENT OF READJUSTMENT PAY AND REFUNDED THE PAYMENT OF READJUSTMENT PAY TO THE DEPARTMENT CONCERNED. THE ACTION OF THE VETERANS ADMINISTRATION WAS PREDICATED ON ITS VIEW THAT THE VETERAN HAD NOT BEEN FULLY ADVISED OF HIS RIGHT OF ELECTION AT THE TIME OF HIS RELEASE FROM DUTY. THAT VIEW OF THE VETERANS ADMINISTRATION SEEMS TO BE AT VARIANCE WITH THE VIEW EXPRESSED IN THE SOMEWHAT SIMILAR CIRCUMSTANCE CONSIDERED IN THE GENERAL COUNSEL'S OPINION, VETERANS ADMINISTRATION, OF AUGUST 27, 1957, OP. G.C. 24-57. IN THAT CASE THE QUESTION PRESENTED WAS WHETHER AN ELECTION TO RECEIVE DEPENDENCY AND INDEMNITY COMPENSATION PAYABLE PURSUANT TO THE PROVISIONS OF PUBLIC LAW 881, 84TH CONGRESS (NOW CODIFIED IN 38 U.S.C. 411), MAY BE REVOKED AT A LATER DATE FOR THE PURPOSE OF RESUMING PAYMENTS OF DEATH COMPENSATION AND SERVICEMEN'S INDEMNITY IN CASES WHERE THE CLAIMANT ALLEGES THAT SHE DID NOT UNDERSTAND THE SIGNIFICANCE OF HER ELECTION. THE OPINION CONCLUDED THAT " IT IS IMMATERIAL, ALTHOUGH UNFORTUNATE, THAT THE WIDOW MAY NOT HAVE UNDERSTOOD THE FULL IMPORT OF HER ELECTION TO RECEIVE DEPENDENCY AND INDEMNITY COMPENSATION.'

QUESTION 4 IN OUR DECISION OF NOVEMBER 13, 1956, B-129339, 36 COMP. GEN. 390, 394, PRESENTED SUBSTANTIALLY THE SAME QUESTION AS PRESENTED HERE AND IT WAS HELD:

THERE APPEARS TO BE NOTHING IN THE LANGUAGE OF PARAGRAPHS (B) (5), 50 U.S.C. 1016 (B) (5) AND (6), 50 U.S.C. 1016 (B) (6), OF SECTION 265 OF THE 1952 ACT AS ADDED BY THE 1956 ACT ( ARMED FORCES RESERVE ACT OF 1952, AS ADDED BY THE ACT OF JULY 9, 1956, PUBLIC LAW 676, 70STAT. 517), OR IN THE LEGISLATIVE HISTORY OF THE 1956 ACT, WHICH WOULD SUPPORT THE VIEW THAT AN ELECTION TO RECEIVE A LUMP-SUM READJUSTMENT PAYMENT UNDER SUCH PROVISIONS OF LAW MAY BE CHANGED AT A LATER DATE SO AS TO PERMIT PAYMENT OF SEVERANCE PAY OR DISABILITY COMPENSATION UNDER LAWS ADMINISTERED BY THE VETERANS ADMINISTRATION. BOTH SEVERANCE PAY AND READJUSTMENT PAY ARE LUMP-SUM PAYMENTS AND THE AMOUNTS OF EACH MAY BE DETERMINED WITH FINALITY BEFORE AN ELECTION IS MADE. IT HAS BEEN RECOGNIZED THAT IN CERTAIN SITUATIONS WHERE A MEMBER HAS NOT BEEN ACCORDED A FULL OPPORTUNITY TO MAKE AN ELECTION WHICH WAS OPEN TO HIM UNDER LAWS RELATING TO RETIRED OR RETIREMENT PAY, BECAUSE OF ERRONEOUS INFORMATION FURNISHED FROM ADMINISTRATIVE SOURCES, THE OPPORTUNITY TO MAKE SUCH ELECTION MAY BE AFFORDED HIM. SEE 32 COMP. GEN. 159, 162, AND 33 COMP. GEN. 237, 239. HOWEVER, IT IS REPORTED THAT EACH OF THE MILITARY SERVICES HAS PUBLISHED INSTRUCTIONS WHICH PERMIT THE POSTPONEMENT OF AN ELECTION UNDER SECTION 265 (B) (6), PENDING DETERMINATION OF THE AMOUNT OF ANY DISABILITY COMPENSATION AND THE FURNISHING OF ADVICE BY THE VETERANS ADMINISTRATION WITH RESPECT THERETO. IT WOULD SEEM THAT SUCH INSTRUCTIONS AMPLY PROTECT THE RIGHTS OF MEMBERS ELIGIBLE FOR THE READJUSTMENT PAYMENT. * * *

WHILE IT IS OUR OPINION THAT UNDER THE ARMED FORCES RESERVE ACT OF 1952, 50 U.S.C. 901 NOTE ( 1952 USED.), AN ELECTION MADE TO RECEIVE READJUSTMENT PAY MAY NOT BE CHANGED THEREAFTER SO AS TO ENTITLE THE RECIPIENT TO ALTERNATE BENEFITS UNDER OTHER PROVISIONS OF LAW, WE RECOGNIZED THAT THE QUESTION OF PAYMENT OF DISABILITY COMPENSATION IS ONE WITHIN THE JURISDICTION OF THE VETERANS ADMINISTRATION. IN THIS CONNECTION ATTENTION IS INVITED TO THE PROVISIONS OF 38 U.S.C. 211 (A) AS TO THE FINALITY OF THE DECISIONS OF THE ADMINISTRATOR OF VETERANS' AFFAIRS ON ANY QUESTION OF LAW OR FACT CONCERNING A CLAIM FOR BENEFITS OR PAYMENTS UNDER ANY LAW ADMINISTERED BY THE VETERANS ADMINISTRATION, INCLUDING PAYMENTS OF DISABILITY COMPENSATION.

YOUR SPECIFIC QUESTION MUST BE ANSWERED IN THE NEGATIVE. HOWEVER, WHERE THE ADMINISTRATOR FOR VETERANS' AFFAIRS HAS DETERMINED THAT THE ELECTION OF READJUSTMENT PAY WAS NOT A VALID ELECTION AND THAT THE VETERAN IS ENTITLED TO DISABILITY COMPENSATION, THE VETERAN IS NOT ENTITLED TO RETAIN THE READJUSTMENT PAY PAID TO HIM ON THE BASIS OF THAT INVOLVED ELECTION. HENCE, IF SUCH A DETERMINATION IS MADE, THE VETERAN BECOMES INDEBTED TO THE UNITED STATES FOR THE FULL AMOUNT OF THE READJUSTMENT PAY PAID AND STEPS SHOULD BE TAKEN TO INSURE COLLECTION OF SUCH AMOUNT. IT WOULD SEEM THAT IN SUCH CASES THE VETERANS ADMINISTRATION WOULD NOT ACTUALLY EFFECT ANY PAYMENT OF DISABILITY COMPENSATION TO THE VETERAN UNTIL THE FULL AMOUNT OF THE READJUSTMENT PAYMENT HAS BEEN COLLECTED BY THE UNITED STATES.