B-153799, APRIL 28, 1964, 43 COMP. GEN. 703

B-153799: Apr 28, 1964

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OFFICERS AND EMPLOYEES - DEATH OR INJURY - DISABILITY COMPENSATION AND MILITARY RETIRED PAY A FLEET RESERVIST RETAINED ON ACTIVE DUTY AND EMPLOYED AS A CIVILIAN IN THE FEDERAL GOVERNMENT WHOSE RETAINER PAY WAS WITHHELD DURING THE PERIODS FOR WHICH HE RECEIVED DISABILITY COMPENSATION UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT. IS NOT ENTITLED TO PAYMENT OF THE RETAINER PAY WITHHELD ON THE BASIS OF STEELMAN V. IS ENTITLED TO PAYMENTS OF RETAINER PAY AS A FLEET RESERVIST CONCURRENTLY WITH FEDERAL EMPLOYEES' COMPENSATION AFTER DECEMBER 31. THE REQUEST WAS ASSIGNED SUBMISSION NO. IT IS REPORTED THAT MR. NELSON WAS TRANSFERRED TO THE FLEET RESERVE. HE WAS PLACED ON THE REGULAR NAVY RETIRED LIST ON JANUARY 1.

B-153799, APRIL 28, 1964, 43 COMP. GEN. 703

OFFICERS AND EMPLOYEES - DEATH OR INJURY - DISABILITY COMPENSATION AND MILITARY RETIRED PAY A FLEET RESERVIST RETAINED ON ACTIVE DUTY AND EMPLOYED AS A CIVILIAN IN THE FEDERAL GOVERNMENT WHOSE RETAINER PAY WAS WITHHELD DURING THE PERIODS FOR WHICH HE RECEIVED DISABILITY COMPENSATION UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT, AS AMENDED, 5 U.S.C. 751, IN ACCORDANCE WITH 38 COMP. GEN. 243, HOLDING THAT THE RULING IN MULHOLLAND V. UNITED STATES, 139 CT.CL. 507, THAT A MEMBER OF THE FLEET RESERVE MAY RECEIVE RETAINER PAY CONCURRENTLY WITH EMPLOYEES' DISABILITY COMPENSATION, WOULD BE FOLLOWED FOR PERIODS BEFORE 1953 ONLY, 34 U.S.C. 853 (B) (1946 ED.), ON WHICH THE DECISION TURNED HAVING BEEN REPEALED EFFECTIVE JANUARY 1, 1953, IS NOT ENTITLED TO PAYMENT OF THE RETAINER PAY WITHHELD ON THE BASIS OF STEELMAN V. UNITED STATES, CT.CL. NO. 24-60, DECIDED JUNE 7, 1963, THE PLAINTIFF, A REGULAR NAVY RETIRED ENLISTED MAN, HAVING BEEN DENIED ENTITLEMENT TO RECEIVE RETIRED PAY AND DISABILITY COMPENSATION ON A BASIS OTHER THAN THE MULHOLLAND CASE; THEREFORE, NOTHING STATED WITH RESPECT TO MULHOLLAND MAY BE ACCEPTED AS FURNISHING A BASIS FOR MODIFYING 38 COMP. GEN. 243. A PROPOSED ADMINISTRATIVE PROCEDURE TO SIMPLIFY HANDLING THE WITHHOLDING OF RETIRED OR RETAINER PAY FOR PERIODS A FORMER MEMBER OF THE UNIFORMED SERVICES RECEIVED DISABILITY COMPENSATION AS A CIVILIAN EMPLOYEE OF THE FEDERAL GOVERNMENT UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT, AS AMENDED, 5 U.S.C. 751, BY CONTINUING TO PAY THE RETIRED OR RETAINER PAY, AND TO DEDUCT SUCH PAYMENTS FROM THE DISABILITY COMPENSATION AWARDED, PAYING ONLY THE DIFFERENCE AS DISABILITY COMPENSATION, DOES NOT SATISFY THE REQUIREMENTS OF 5 U.S.C. 751 THAT AN EMPLOYEE IN RECEIPT OF DISABILITY COMPENSATION "SHALL NOT RECEIVE FROM THE UNITED STATES ANY SALARY, PAY, OR REMUNERATION WHATSOEVER EXCEPT IN RETURN FOR SERVICES ACTUALLY PERFORMED," AND THE PROPOSED PROCEDURE, SUGGESTING DUAL PAYMENTS, APPEARS TO COME WITHIN THE STATUTORY PROHIBITION.

TO COMMANDER M. L. CONNER, DEPARTMENT OF THE NAVY, APRIL 28, 1964:

BY SECOND INDORSEMENT DATED MARCH 23, 1964, THE COMPTROLLER OF THE NAVY FORWARDED YOUR LETTER OF FEBRUARY 4, 1964, REQUESTING AN ADVANCE DECISION WHETHER RALEIGH E. NELSON, JR., 207 06 05, IS ENTITLED TO PAYMENTS OF RETAINER PAY AS A FLEET RESERVIST CONCURRENTLY WITH FEDERAL EMPLOYEES' COMPENSATION AFTER DECEMBER 31, 1952. THE REQUEST WAS ASSIGNED SUBMISSION NO. DO-N-753 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

IT IS REPORTED THAT MR. NELSON WAS TRANSFERRED TO THE FLEET RESERVE, CLASS F-6, ON JUNE 9, 1952, AND RETAINED ON ACTIVE DUTY THROUGH MARCH 29, 1957. HE WAS PLACED ON THE REGULAR NAVY RETIRED LIST ON JANUARY 1, 1960, BY REASON OF COMPLETION OF 30 YEARS' ACTIVE AND INACTIVE SERVICE. HIS RETAINER PAY AS A TRANSFERRED FLEET RESERVIST WAS WITHHELD BY THE DEPARTMENT OF THE NAVY FOR CERTAIN PERIODS FROM AUGUST 26, 1958, THROUGH DECEMBER 31, 1959, DURING WHICH PERIODS HE RECEIVED DISABILITY COMPENSATION AS A CIVILIAN EMPLOYEE OF THE GOVERNMENT UNDER THE PROVISIONS OF THE FEDERAL EMPLOYEES' COMPENSATION ACT OF SEPTEMBER 7, 1916, CH. 458, 39 STAT. 742, 5 U.S.C. 751, AS AMENDED.

A CIVILIAN GOVERNMENT EMPLOYEE'S RIGHT TO DISABILITY COMPENSATION ON ACCOUNT OF AN INJURY SUFFERED IN LINE OF DUTY IS GOVERNED BY THE FEDERAL EMPLOYEES' COMPENSATION ACT. SECTION 7 (A) OF THAT ACT, AS AMENDED, 5 U.S.C. 757 (A), PROVIDES IN PERTINENT PART AS FOLLOWS:

(A) AS LONG AS THE EMPLOYEE IS IN RECEIPT OF COMPENSATION UNDER SECTIONS 751-657, 757-781, 783-791 AND 793 OF THIS TITLE, OR, IF HE HAS BEEN PAID A LUMP SUM IN COMMUTATION OF INSTALLMENT PAYMENTS, UNTIL THE EXPIRATION OF THE PERIOD DURING WHICH SUCH INSTALLMENT PAYMENTS WOULD HAVE CONTINUED, HE SHALL NOT RECEIVE FROM THE UNITED STATES ANY SALARY, PAY, OR REMUNERATION WHATSOEVER EXCEPT IN RETURN FOR SERVICES ACTUALLY PERFORMED, AND EXCEPT PENSIONS FOR SERVICE IN THE ARMY OR NAVY OF THE UNITED STATES * * *.

IT HAS LONG BEEN HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT DISABILITY COMPENSATION PAYMENTS UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT MAY NOT BE MADE TO A PERSON CONCURRENTLY WITH THE PAYMENT OF MILITARY OR NAVAL RETAINER OR RETIRED PAY IN THE ABSENCE OF A SPECIFIC STATUTE SO PROVIDING. HOWEVER, IN THE CASE OF MULHOLLAND V. UNITED STATES, 139 CT.CL. 507 (1957), THE COURT OF CLAIMS HELD THAT A MEMBER OF THE FLEET RESERVE MAY RECEIVE RETAINER PAY CONCURRENTLY WITH EMPLOYEES' DISABILITY COMPENSATION BECAUSE (1) SECTION 4 OF THE NAVAL RESERVE ACT OF 1938, CH. 690, 52 STAT. 1176, 34 U.S.C. 853 (B) (1946 ED.), MADE THE PROHIBITION CONTAINED IN SECTION 7 (A) OF THE FEDERAL EMPLOYEES' COMPENSATION ACT INAPPLICABLE TO MEMBERS OF THE NAVAL RESERVE (WHICH THEN INCLUDED THE FLEET RESERVE), AND BECAUSE (2) THE FLEET RESERVE RETAINER PAY IS PAID IN PART FOR READINESS TO RENDER SERVICE WHEN CALLED UPON AND, TO THAT EXTENT, IS PAID "IN RETURN FOR SERVICES ACTUALLY PERFORMED" WITHIN THE MEANING OF THE FEDERAL EMPLOYEES' COMPENSATION ACT.

IN OUR DECISION OF SEPTEMBER 25, 1958, 38 COMP. GEN. 243, WE SAID THAT WE WOULD FOLLOW THE DECISION IN THE MULHOLLAND CASE FOR PERIODS BEFORE 1953, IT BEING NOTED THAT SECTION 4 OF THE NAVAL RESERVE ACT OF 1938 WAS REPEALED BY SECTION 803 OF THE ARMED FORCES RESERVE ACT OF 1952, CH. 608, 66 STAT. 505, 34 U.S.C. 854 NOTE, EFFECTIVE JANUARY 1, 1953, AND THAT THEREAFTER THE FLEET RESERVE CEASED TO BE A PART OF THE NAVAL RESERVE AND BECAME A PART OF THE REGULAR NAVY. IT APPEARS THAT, THEREFORE, THE WITHHOLDING OF MR. NELSON'S RETAINER PAY BY THE NAVY BECAUSE OF HIS RECEIPT OF DISABILITY COMPENSATION AS A CIVILIAN EMPLOYEE WAS IN ACCORDANCE WITH OUR DECISION OF SEPTEMBER 25, 1958.

CONCERNING THE CASE OF STEELMAN V. UNITED STATES, CT.CL. NO. 24-60, DECIDED JUNE 7, 1963, THE SOLE QUESTION PRESENTED WAS WHETHER A REGULAR NAVY RETIRED ENLISTED MAN WAS ENTITLED TO RECEIVE RETIRED PAY AND DISABILITY COMPENSATION. SINCE THE DECISION AGAINST THE PLAINTIFF WAS NOT BASED ON THE MULHOLLAND CASE, NOTHING STATED IN SUCH DECISION WITH RESPECT TO THAT CASE MAY BE ACCEPTED AS FURNISHING A BASIS FOR MODIFYING OUR DECISION OF SEPTEMBER 25, 1958. ACCORDINGLY, YOUR QUESTION IS ANSWERED IN THE NEGATIVE.

IN FORWARDING YOUR LETTER HERE, THE COMPTROLLER OF THE NAVY FURNISHED SUPPLEMENTAL MATTER FOR CONSIDERATION WITH A VIEW TO SIMPLIFYING THE HANDLING OF THESE CASES. IN HIS COMMUNICATION THE NAVY COMPTROLLER STATES THAT THE ADMINISTRATIVE DIFFICULTIES COULD BE MINIMIZED IF THE NAVY NEED ONLY ADVISE THE BUREAU OF EMPLOYEES' COMPENSATION AS TO THE RATE AND AMOUNT OF THE MEMBER'S RETIRED OR RETAINER PAY. IT IS REPORTED THAT THIS RATE IS ALMOST INVARIABLY LESS THAN THE RATE OF THE DISABILITY COMPENSATION AND THAT, THEREFORE, DEDUCTION OF THE AMOUNT OF RETIRED OR RETAINER PAY RECEIVED OR RECEIVABLE FROM THE AMOUNT OF ALLOWABLE DISABILITY COMPENSATION WOULD ESTABLISH A MUCH SIMPLER ADMINISTRATIVE PROCEDURE, PROVIDED IT IS FREE FROM OBJECTION ON LEGAL GROUNDS. DECISION IS REQUESTED AS TO WHETHER SUCH PROCEDURE SATISFIES THE REQUIREMENTS OF THE PERTINENT LAW.

UNDER THE ABOVE-QUOTED PROVISIONS OF LAW, AN EMPLOYEE WHO IS IN RECEIPT OF DISABILITY COMPENSATION MAY NOT RECEIVE FROM THE UNITED STATES "ANY SALARY, PAY, OR REMUNERATION WHATSOEVER" EXCEPT IN RETURN FOR SERVICES ACTUALLY PERFORMED AND EXCEPT PENSIONS FOR SERVICE IN THE ARMY OR NAVY OF THE UNITED STATES. AS UNDERSTOOD BY US, THE PROPOSED ADMINISTRATIVE PROCEDURE CONTEMPLATES THE CONTINUED PAYMENT OF RETIRED OR RETAINER PAY DESPITE AN AWARD OF DISABILITY COMPENSATION, ALTHOUGH PAYMENT OF SUCH COMPENSATION WOULD BE AT A REDUCED RATE REPRESENTING THE DIFFERENCE BETWEEN THE AMOUNT AWARDED AND THE RETIRED OR RETAINER PAY. THUS VIEWED, THE PROPOSED PROCEDURE SUGGESTS DUAL PAYMENTS WHICH APPEAR TO COME WITHIN THE STATUTORY PROHIBITION. THE RETIRED OR RETAINER PAY MAY NOT BE REGARDED AS BEING IN THE NATURE OF THE DISABILITY COMPENSATION REPLACED BY SUCH PAY, SINCE WE KNOW OF NO STATUTORY AUTHORITY FOR THUS SUBJECTING DEPARTMENT OF THE NAVY APPROPRIATIONS TO PAYMENT OF DISABILITY COMPENSATION. ACCORDINGLY, THE PROPOSED ADMINISTRATIVE PROCEDURE DOES NOT, IN OUR VIEW, SATISFY THE REQUIREMENTS OF LAW.