B-237973, Mar 22, 1991, 70 Comp.Gen. 350

B-237973: Mar 22, 1991

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MILITARY PERSONNEL - Pay - Reservists - Retirement pay - Amount determination - Computation A reservist's civil service retirement income is not "earned income from nonmilitary employment" under the dual compensation restrictions of 37 U.S.C. Sec. 204 which requires a reduction in the pay and allowances a member receives while incapacitated if he receives income from nonmilitary employment since civil service retirement income is unrelated to the member's current employment status. USAF Reserve: This action is the result of a claim by Chief Master Sergeant Trente R. For an amount equal to his federal civil service annuity which was deducted from the pay and allowances to which he was entitled under 37 U.S.C.

B-237973, Mar 22, 1991, 70 Comp.Gen. 350

MILITARY PERSONNEL - Pay - Reservists - Retirement pay - Amount determination - Computation A reservist's civil service retirement income is not "earned income from nonmilitary employment" under the dual compensation restrictions of 37 U.S.C. Sec. 204 which requires a reduction in the pay and allowances a member receives while incapacitated if he receives income from nonmilitary employment since civil service retirement income is unrelated to the member's current employment status. Accordingly, it may not be offset against his pay and allowances.

Chief Master Sergeant Trente R. Adair, USAF Reserve:

This action is the result of a claim by Chief Master Sergeant Trente R. Adair, USAFR, for an amount equal to his federal civil service annuity which was deducted from the pay and allowances to which he was entitled under 37 U.S.C. Sec. 204(g) when he became incapacitated. That provision requires that the pay and allowances to which a member of a reserve component is entitled be reduced by earned income received from nonmilitary employment during a period of incapacitation. It is our view that his civil service annuity is not earned income from nonmilitary employment and the claim should be paid.

Sergeant Adair, a member of the Air Force Reserve, was ordered to active duty for 6 days from November 21, to November 26, 1988. During this period of active duty he suffered a disabling illness and was declared medically unfit for duty from November 27, 1988 to January 10, 1989, and became entitled to pay and allowances under 37 U.S.C. Sec. 204(g).

Sergeant Adair is also a retired federal civil service employee who receives a civil service annuity. Throughout the period that he received disability compensation as a reserve member, he also continued to receive his civil service annuity. The Air Force deducted a total of $2076.40 from the allowances to which he was entitled in accordance with 37 U.S.C. Sec. 204(g) which provides as follows:

"(g)(1) A member of a reserve component of a uniformed service is entitled to the pay and allowances provided by law or regulation for a member of a regular component of a uniformed service of corresponding grade and length of service whenever such member is physically disabled as the result of an injury, illness, or disease incurred or aggravated:

"(A) in line of duty while performing active duty;

"(B) in line of duty while performing inactive-duty training (other than work or study in connection with a correspondence course of an armed force or attendance in an inactive status at an educational institution under the sponsorship of an armed force or the Public Health Service); or;

"(C) while traveling directly to or from such duty or training.

"In the case of a member who receives earned income from nonmilitary employment or self-employment performed in any month in which the member is otherwise entitled to pay and allowances under paragraph (1), the total pay and allowances shall be reduced by the amount of such income. calculating earned income for the purpose of the preceding sentence, income from an income protection plan, vacation pay, or sick leave which the member elects to receive shall be considered."

The implementing regulation similarly speaks of civilian earned income as:

"... the member's normal wages or salary or other earnings ... that would have been payable for the disability period had the member been fully engaged in civilian employment ...."

It is clear that Congress intended to reduce the pay and allowances to which a member of a reserve component is entitled when he is able to earn income from civilian employment. However, we think that the "employment" contemplated by the statute and regulation is active employment that, to the extent it can be engaged in, is inconsistent with the receipt of disability payments. Since a civil service annuitant is no longer actively employed in that sense, any income received in the form of a civil service annuity should not be considered as earned income for the purposes of 37 U.S.C. Sec. 204(g), in our view.

Accordingly, the amounts deducted from Sergeant Adair's disability pay and allowances should be refunded to him.