Request by Retired Military Member for Waiver of Indebtedness

B-199106: Nov 13, 1980

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A retired Army member appealed the action taken by the Claims Division denying waiver of his debt to the United States. The debt arose out of overpayment of retired pay for a period when the amount of his Veterans Administration (VA) compensation payments exceeded the amount of his retired pay and he, nevertheless, continued to receive full retired pay. The member had waived that portion of his retired pay equal to his VA compensation, as is required by law, since duplication of payments of retired pay and VA compensation is not authorized. The Army subsequently discovered that, for a period of 6 years, the member received both VA and retirement payments. The member, though he had the opportunity to observe the relationship between his VA compensation and deductions from his retired pay through cost-of-living increase notices, made no effort to question the correctness of his retired pay. The member stated that the fault was the Army's, that VA had made many mistakes with his compensation check, and that he could not be expected to pay heed to fluctuations in his VA compensation. However, he was or should have been aware of the relationship between the two compensation systems, at least to the extent of being aware that he was not entitled to full payments under both systems. Therefore, he should have been on notice that there existed at least the possibility of an error in his pay account. Claims against the United States arising out of erroneous payments of pay or allowances, including retired pay, may be waived unless there exists an indication of fault or lack of good faith on the part of the member. Fault is considered to exist if, in light of all the facts, the member should have known that an error existed and taken action to have it corrected. In this case, while the payments were made due to administrative error on the part of the agencies involved, a comparison of the amount of VA compensation received with the retired pay entitlement, as presented in the cost-of-living notices, would have put a reasonable person on notice of the possibility of an error. The member's failure to make any effort to inquire as to the correctness of his pay constituted fault on his part, precluding waiver. Accordingly, the action taken by the Claims Division was sustained.