B-197524.OM, L/M, MAR 7, 1980

B-197524.OM: Mar 7, 1980

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CLAIMS DIVISION: RETURNED HEREWITH IS CLAIMS FILE NO. FALLON WAS OVERPAID BECAUSE THE NAVY DID NOT STOP PAYING HER THE ANNUITY WHEN HER OTHER INCOME EXCEEDED THE ALLOWABLE AMOUNT. MAY HAVE CREATED A BASIS UPON WHICH ERRONEOUS PAYMENTS. ARE LIKELY TO OCCUR. THIS IS SO BECAUSE THE ANNUITANT'S ANTICIPATED INCOME FOR THE CURRENT YEAR IS USED TO DETERMINE THE AMOUNT OF THE PAYMENTS MADE. WHEN AN ANNUITANT'S INCOME IS MORE THAN WAS ANTICIPATED AS WAS MRS. ADJUSTMENTS TO ANTICIPATED INCOME AND THUS TO ANNUITY PAYMENTS ARE NOT READILY MADE SO AS TO REFLECT THE ACTUAL INCOME. IT IS OUR VIEW THAT IN THE ABSENCE OF AN INDICATION THAT WIDOWS WHO CLAIM ENTITLEMENT TO A MINIMUM INCOME ANNUITY HAVE DELIBERATELY UNDERSTATED THEIR INCOME.

B-197524.OM, L/M, MAR 7, 1980

WAIVER OF SPB MINIMUM INCOME ANNUITY OVERPAYMENT - MRS. ANNA E. FALLON B-197524-O.M.

DIRECTOR, CLAIMS DIVISION:

RETURNED HEREWITH IS CLAIMS FILE NO. Z-2792750 INVOLVING AN OVERPAYMENT OF A MINIMUM INCOME ANNUITY TO MRS. ANNA E. FALLON, UNDER SECTION 4 OF PUBLIC LAW 92-425, APPROVED SEPTEMBER 21, 1973, 86 STAT. 706, AS AMENDED, 10 U.S.C. 1448 NOTE. MRS. FALLON WAS OVERPAID BECAUSE THE NAVY DID NOT STOP PAYING HER THE ANNUITY WHEN HER OTHER INCOME EXCEEDED THE ALLOWABLE AMOUNT.

IN OUR REVIEW OF THE CIRCUMSTANCES WHICH GAVE RISE TO MRS. FALLON'S SITUATION, IT APPEARS TO US THAT THE PROCEDURES ADOPTED BY THE SERVICES IN THEIR IMPLEMENTATION OF THE PROVISIONS OF SECTION 4, SUPRA, WHILE NOT UNREASONABLE, MAY HAVE CREATED A BASIS UPON WHICH ERRONEOUS PAYMENTS, ESPECIALLY OVERPAYMENTS, ARE LIKELY TO OCCUR. THIS IS SO BECAUSE THE ANNUITANT'S ANTICIPATED INCOME FOR THE CURRENT YEAR IS USED TO DETERMINE THE AMOUNT OF THE PAYMENTS MADE. THUS, WHEN AN ANNUITANT'S INCOME IS MORE THAN WAS ANTICIPATED AS WAS MRS. FALLON'S, ANNUITY OVERPAYMENTS RESULT. ADJUSTMENTS TO ANTICIPATED INCOME AND THUS TO ANNUITY PAYMENTS ARE NOT READILY MADE SO AS TO REFLECT THE ACTUAL INCOME.

CONSIDERING THE ABOVE AND THE MEAGER INCOME OF THESE ANNUITANTS, IT IS OUR VIEW THAT IN THE ABSENCE OF AN INDICATION THAT WIDOWS WHO CLAIM ENTITLEMENT TO A MINIMUM INCOME ANNUITY HAVE DELIBERATELY UNDERSTATED THEIR INCOME, WE BELIEVE THAT TO REQUIRE REPAYMENT BY THEM WOULD BE CONTRARY TO THE BASIC PURPOSE FOR WHICH THESE PAYMENTS ARE MADE AND AGAINST EQUITY AND GOOD CONSCIENCE. COMPARE B-183738, NOVEMBER 14, 1975; AND B-185545, MARCH 18, 1976.

IN THE PRESENT CASE, THERE APPEARS TO BE NO EVIDENCE OF DELIBERATE INCOME UNDERSTATEMENT. IN FACT THE CONTRARY APPEARS TO BE THE CASE SINCE WHEN MRS. FALLON BECAME EMPLOYED SHE NOTIFIED THE NAVY OF THAT FACT IN NOVEMBER 1976 AND ADVISED THAT SHE EXPECTED TO CONTINUE WORKING INTO 1977. THEREFORE, WE CONCUR IN THE NAVY'S DETERMINATION THAT WAIVER OF MRS. FALLON'S DEBT OF $536.04 BE GRANTED UNDER 10 U.S.C. 1453.