B-167101, DEC. 29, 1969

B-167101: Dec 29, 1969

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128.16 REPRESENTING REFUND OF RETAINER PAY REPAID BY CLAIMANT FOR PERIOD HE WAS ALSO RECEIVING DISABILITY COMPENSATION. WAS CORRECT AND IS SUSTAINED SINCE CLAIMANT WAS PERMITTED TO RETAIN FULL AMOUNT OF EMPLOYEES' COMPENSATION. WHICH IS TAX FREE. WAS CHECKED ONLY FOR RETAINER PAY RECEIVED FOR SUBJECT PERIOD. WHICH WAS SUBJECT TO WITHHOLDING TAX. ROSE: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 8. WHILE YOU WERE IN RECEIPT OF FEDERAL EMPLOYEES' DISABILITY COMPENSATION FOR AN INJURY SUSTAINED BY YOU ON JUNE 3. IT WAS REPORTED THAT YOU RECEIVED RETIRED (RETAINER) PAY AT THE RATE OF $226.40 PER MONTH FROM JUNE 1. YOUR ACCOUNT WAS OVERPAID DURING THAT PERIOD AT THE RATE OF $226.40 PER MONTH OR A TOTAL OF $2.

B-167101, DEC. 29, 1969

PAY--RETIRED--FLEET RESERVISTS--RETAINER PAY WITHHOLDINGS--DISABILITY COMPENSATION AS CIVILIAN CLAIMS DIVISION SETTLEMENT IN AMOUNT OF $2,128.16 REPRESENTING REFUND OF RETAINER PAY REPAID BY CLAIMANT FOR PERIOD HE WAS ALSO RECEIVING DISABILITY COMPENSATION, LESS WITHHOLDING TAX, WAS CORRECT AND IS SUSTAINED SINCE CLAIMANT WAS PERMITTED TO RETAIN FULL AMOUNT OF EMPLOYEES' COMPENSATION, WHICH IS TAX FREE, AND WAS CHECKED ONLY FOR RETAINER PAY RECEIVED FOR SUBJECT PERIOD, WHICH WAS SUBJECT TO WITHHOLDING TAX.

TO MR. JOHN E. ROSE:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 8, 1969, ADDRESSED TO MR. FRED W. SHIELDS, ATTORNEY AT LAW, AND FORWARDED HERE BY MR. SHIELDS WITH HIS LETTER OF OCTOBER 15, 1969, CONCERNING THE SETTLEMENT OF OUR CLAIMS DIVISION DATED JULY 2, 1969, IN YOUR FAVOR IN THE AMOUNT OF $2,128.16 REPRESENTING RETAINER PAY WITHHELD FOR THE PERIOD DECEMBER 6, 1955, THROUGH SEPTEMBER 17, 1956, WHILE YOU WERE IN RECEIPT OF FEDERAL EMPLOYEES' DISABILITY COMPENSATION FOR AN INJURY SUSTAINED BY YOU ON JUNE 3, 1955.

YOU ALLEGE THAT YOU REPAID THE FULL AMOUNT OF THE COMPENSATION AWARDED YOU, $2,447.70, AND YOU INDICATE THAT YOU SHOULD RECEIVE THE FULL AMOUNT REPAID, OR A BALANCE OF $319.54. YOU ALSO QUESTION THE WITHHOLDING ON THE SETTLEMENT OF $425.63 AS TAXES.

BY LETTER DATED APRIL 9, 1964, FROM THE U. S. NAVY FINANCE CENTER, CLEVELAND, OHIO, IT WAS REPORTED THAT YOU RECEIVED RETIRED (RETAINER) PAY AT THE RATE OF $226.40 PER MONTH FROM JUNE 1, 1955, THROUGH MAY 31, 1958, AND SINCE YOU ALSO RECEIVED EMPLOYEES' DISABILITY COMPENSATION FOR THE PERIOD DECEMBER 6, 1955, THROUGH SEPTEMBER 17, 1956, YOUR ACCOUNT WAS OVERPAID DURING THAT PERIOD AT THE RATE OF $226.40 PER MONTH OR A TOTAL OF $2,128.16. IT IS FURTHER REPORTED THAT BY MEANS OF MONTHLY CHECK AGES AGAINST YOUR RETIRED PAY PLUS A PERSONAL REMITTANCE THE OVERPAYMENT OF $2,128.16 WAS COMPLETELY LIQUIDATED BY JANUARY 1960.

SINCE YOU WERE PERMITTED TO RETAIN THE FULL AMOUNT OF EMPLOYEES' COMPENSATION RECEIVED BY YOU, WHICH IS TAX FREE, AND WERE ONLY CHECKED FOR THE AMOUNT OF RETAINER PAY YOU RECEIVED FOR THE PERIOD YOU WERE IN RECEIPT OF SUCH DISABILITY COMPENSATION, THE SETTLEMENT REPRESENTING REFUND OF THE AMOUNT REPAID BY YOU, WHICH WAS SUBJECT TO WITHHOLDING TAX, WAS CORRECT AND IS SUSTAINED.