B-149203, AUGUST 2, 1962, 42 COMP. GEN. 71

B-149203: Aug 2, 1962

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ARE REQUIRED TO HAVE AN APPROPRIATE REDUCTION MADE IN THEIR RETIRED PAY. 000 LIMITATION IS NOT EXCEEDED. THAT PAYMENT IS NOT DETERMINED UNTIL THE END OF THE CALENDAR YEAR. THE REQUEST FOR DECISION WAS ASSIGNED NO. IT IS REPORTED THAT MAJOR FRAZIER WAS TRANSFERRED FROM THE REGULAR MARINE CORPS TO THE TEMPORARY DISABILITY RETIRED LIST. HE WAS NOT RETIRED FOR DISABILITY INCURRED IN COMBAT WITH AN ENEMY OF THE UNITED STATES OR CAUSED BY AN INSTRUMENTALITY OF WAR. IT IS FURTHER REPORTED THAT ON SEPTEMBER 14. MAJOR FRAZIER WAS EMPLOYED BY THE NAVAL SUPPLY DEPOT. MAJOR FRAZIER'S RETIRED PAY WAS REDUCED BY $275 PER MONTH BECAUSE OF HIS HAVING BEEN AWARDED DISABILITY COMPENSATION IN THAT AMOUNT BY THE VETERANS ADMINISTRATION.

B-149203, AUGUST 2, 1962, 42 COMP. GEN. 71

COMPENSATION - DOUBLE - CONCURRENT MILITARY RETIRED AND CIVILIAN SERVICE PAY - MAXIMUM LIMITATION ALTHOUGH RETIRED MEMBERS OF THE UNIFORMED SERVICES HOLDING CIVILIAN POSITIONS AND RECEIVING A COMBINED ANNUAL RATE OF COMPENSATION AND RETIRED PAY IN EXCESS OF THE $10,000 LIMITATION IN SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A, ARE REQUIRED TO HAVE AN APPROPRIATE REDUCTION MADE IN THEIR RETIRED PAY, UNDER THE SCHUYLER AND DELLINGER CASES (CT.CL.NO. 548-58, JAN. 20, 1960, AND CT.CL.NO. 83-61, MAY 9, 1962) IF THE TOTAL COMPENSATION AND RETIRED PAY ACTUALLY RECEIVED DURING THE CALENDAR YEAR AMOUNTS TO LESS THAN $10,000 THE AMOUNTS WITHHELD MAY BE PAID TO THE MEMBER, PROVIDED THAT THE $10,000 LIMITATION IS NOT EXCEEDED, AND THAT PAYMENT IS NOT DETERMINED UNTIL THE END OF THE CALENDAR YEAR. OVERRULES 40 COMP. GEN. 193; 12 ID. 256; B-144150, OCT. 18, 1960, AND B-144640, JAN. 3, 1961, AND MODIFIES 38 COMP. GEN. 774.

TO MAJOR JOHN A. RAPP, UNITED STATES MARINE CORPS, AUGUST 2, 1962:

BY FIRST ENDORSEMENT DATED JUNE 12, 1962, THE COMMANDANT OF THE MARINE CORPS FORWARDED YOUR LETTER OF JUNE 7, 1962, REQUESTING A DECISION WHETHER MAJOR LOUIS S. FRAZIER, JR., 1042554, U.S. MARINE CORPS, RETIRED, MAY BE PAID THE SUM OF $450.24 WITHHELD FROM HIS RETIRED PAY DURING THE PERIOD SEPTEMBER 14, 1961, THROUGH NOVEMBER 30, 1961, UNDER THE PROVISIONS OF SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A. THE REQUEST FOR DECISION WAS ASSIGNED NO. DO-MC-657 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

IT IS REPORTED THAT MAJOR FRAZIER WAS TRANSFERRED FROM THE REGULAR MARINE CORPS TO THE TEMPORARY DISABILITY RETIRED LIST, U.S. MARINE CORPS, ON MARCH 1, 1961, UNDER 10 U.S.C. 1202, WITH ENTITLEMENT TO RETIRED PAY AT THE RATE OF $472.50 PER MONTH, OR $5,670 PER YEAR. HE WAS NOT RETIRED FOR DISABILITY INCURRED IN COMBAT WITH AN ENEMY OF THE UNITED STATES OR CAUSED BY AN INSTRUMENTALITY OF WAR.

IT IS FURTHER REPORTED THAT ON SEPTEMBER 14, 1961, MAJOR FRAZIER WAS EMPLOYED BY THE NAVAL SUPPLY DEPOT, MECHANICSBURG, PENNSYLVANIA, AS A CIVILIAN EMPLOYEE ON A FULL-TIME BASIS AT AN ANNUAL SALARY OF $6,435, AND THAT HE CONTINUED IN THIS EMPLOYMENT AT THE SAME SALARY THROUGH DECEMBER 31, 1961. EFFECTIVE DECEMBER 1, 1961, MAJOR FRAZIER'S RETIRED PAY WAS REDUCED BY $275 PER MONTH BECAUSE OF HIS HAVING BEEN AWARDED DISABILITY COMPENSATION IN THAT AMOUNT BY THE VETERANS ADMINISTRATION. DURING THE PERIOD SEPTEMBER 14, 1961, THROUGH NOVEMBER 30, 1961, THE OFFICER'S COMBINED ANNUAL RATE OF RETIRED PAY ($5,670) AND COMPENSATION FROM THE CIVILIAN POSITION ($6,435) EXCEEDED THE COMBINED ANNUAL RATE OF COMPENSATION ($10,000) SPECIFIED IN 5 U.S.C. 59A (A) BY $2,105, OR A MONTHLY RATE OF $175.42. THEREFORE, THE OFFICER'S RETIRED PAY WAS REDUCED AT THE MONTHLY RATE OF $175.42 FOR THIS PERIOD, OR IN A TOTAL SUM OF $450.24. HOWEVER, THE OFFICER'S COMPENSATION AS A GOVERNMENT EMPLOYEE AND HIS RETIRED PAY AMOUNTED TO LESS THAN $10,000 FOR THE CALENDAR YEAR 1961.

SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

(A) AFTER JUNE 30, 1962, 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: PROVIDED, THAT THIS SECTION SHALL NOT APPLY TO ANY REGULAR OR EMERGENCY COMMISSIONED OFFICER RETIRED FOR DISABILITY (1) INCURRED IN COMBAT WITH AN ENEMY OF THE UNITED STATES, OR (2) CAUSED BY AN INSTRUMENTALITY OF WAR AND INCURRED IN LINE OF DUTY DURING A PERIOD OF WAR (AS THAT TERM IS USED IN CHAPTER 11 OF TITLE 38).

IN 40 COMP. GEN. 193 IT WAS HELD, IN PERTINENT PART, AS FOLLOWS (QUOTING FROM THE SYLLABUS):

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.CL.NO. 548- 58, JANUARY 20, 1960, IN WHICH THE COURT AUTHORIZED A REFUND OF 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.

IN THE CASE OF OLIN E. DELLINGER V. UNITED STATES, CT.CL.NO. 83-61, DECIDED MAY 9, 1962, THE COURT CONSIDERED THE RIGHTS OF A RETIRED REGULAR AIR FORCE OFFICER TO RETIRED PAY WITHHELD FROM HIM PURSUANT TO 5 U.S.C. 59A. THE OFFICER THERE INVOLVED RECEIVED RETIRED PAY BEGINNING FEBRUARY 1, 1957, AND WAS EMPLOYED BY THE POST EXCHANGE AT PARKS AIR FORCE BASE AS A CIVILIAN FROM JULY 11, 1957, TO JULY 12, 1958. THE RETIRED PAY AND CIVILIAN COMPENSATION RECEIVED BY HIM DURING EACH OF THE CALENDAR YEARS 1957 AND 1958 AMOUNTED TO LESS THAN $10,000. HOWEVER, DURING THE EMPLOYMENT YEAR BEGINNING JULY 11, 1957, AND ENDING JULY 10, 1958, THE TOTAL AMOUNT OF RETIRED PAY AND CIVILIAN COMPENSATION RECEIVED BY THE OFFICER FOR THAT YEAR EXCEEDED THE $10,000 LIMITATION BY $1,553.30. THE COURT HELD THAT, WHILE THE ISSUE WAS NOT FREE FROM DOUBT, IT WAS OF THE OPINION THAT "THE APPROPRIATE PERIOD OF TIME INTENDED TO BE USED FOR THE PURPOSE OF APPLYING THE RESTRICTION OF THE ACT IS A CALENDAR YEAR.' GARRET L. SCHUYLER V. UNITED STATES, 148 CT.CL. 479, THE COURT'S VIEW OF THE MATTER WAS THAT WHEN BOTH PARAGRAPHS (A) AND (B) OF 5 U.S.C. 59A "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.' YOUR QUESTION IS WHETHER YOU MAY APPLY THE SCHUYLER AND DELLINGER DECISIONS TO THE CASE OF MAJOR FRAZIER.

THE LIMITATION IN 5 U.S.C. 59A (A) HAS REFERENCE SPECIFICALLY TO THE COMBINED ANNUAL RATE OF COMPENSATION FROM THE CIVILIAN POSITION AND RETIRED PAY. IN APPLYING THAT PROVISION IN THE PAST IT WAS THE ANNUAL RATE OF COMPENSATION AND RETIRED PAY THAT CONTROLLED, IRRESPECTIVE OF THE TOTAL AMOUNT OF CIVILIAN COMPENSATION AND RETIRED PAY RECEIVED DURING THE YEAR OR FRACTION THEREOF. IT IS OUR VIEW THAT, AS IN THE PAST, AN APPROPRIATE REDUCTION IS REQUIRED TO BE MADE IN CASES INVOLVING A COMBINATION OF ANNUAL CIVILIAN COMPENSATION AND RETIRED PAY AT A RATE IN EXCESS OF $10,000. IT IS UNDERSTOOD THAT THE CURRENT ADMINISTRATIVE PRACTICE IS TO MAKE REDUCTIONS ON THAT BASIS AND WE FIND NOTHING IN THE DECISIONS IN THE SCHUYLER AND DELLINGER CASES WHICH WARRANTS ANY CHANGE IN THAT PRACTICE. HOWEVER, THOSE DECISIONS EXTEND TO AN OFFICER THE RIGHT TO PAYMENT OF THE RETIRED PAY WITHHELD FROM HIM IF THE TOTAL AMOUNT RECEIVED DURING A CALENDAR YEAR AS COMPENSATION AS A GOVERNMENT CIVILIAN EMPLOYEE AND RETIRED PAY PAYABLE TO HIM AS AN OFFICER AMOUNTS "TO LESS THAN $10,000; " PROVIDED THAT THE AMOUNT OF SUCH PAYMENT PLUS THE TOAL AMOUNT PREVIOUSLY RECEIVED DURING THE PARTICULAR CALENDAR YEAR AS COMPENSATION AS A CIVILIAN EMPLOYEE AND RETIRED AS AN OFFICER MAY NOT EXCEED $10,000. RIGHT TO PAYMENT UNDER THOSE DECISIONS CAN BE DETERMINED ONLY AT THE END OF THE CALENDAR YEAR INVOLVED (OR AT TIME OF THE OFFICER'S DEATH) AND HENCE, THOSE DECISIONS MAY BE GIVEN EFFECT ONLY AS TO A PAST CALENDAR YEAR.

WE HAVE DECIDED TO ACCEPT AND FOLLOW THE COURT'S DECISIONS IN THE SCHUYLER AND DELLINGER CASES AS A PRECEDENT FOR RETROACTIVE PAYMENT OF RETIRED PAY (IN ADDITION TO CIVILIAN COMPENSATION) IN THOSE CASES WHERE THE RETIRED OFFICER IS DETERMINED TO BE ENTITLED TO THE AMOUNT OF RETIRED PAY WITHHELD FROM HIM DURING A CALENDAR YEAR BECAUSE THE TOTAL AMOUNT RECEIVED FOR THAT YEAR AS COMPENSATION AS A GOVERNMENT CIVILIAN EMPLOYEE AND RETIRED PAY AS AN OFFICER IS LESS THAN $10,000. THEREFORE, IF OTHERWISE CORRECT, THE PROPOSED PAYMENT TO MAJOR FRAZIER OF THE RETIRED PAY WITHHELD FROM HIM IS AUTHORIZED.