B-243489, October 2, 1991

B-243489: Oct 2, 1991

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DIGEST: Where the widowed spouse of a member was not notified that the member declined to participate in the Survivor Benefit Plan (SBP). To the extent it was not reduced by SBP premiums. Was erroneous and subject to waiver. Where the collection of such premiums is not against equity and good conscience by virtue of the protection afforded the spouse had the coverage been in effect. Harrison: This action is the result of a request by Mrs. When he retired he declined to participate in the SBP program which would have provided an annuity for his wife should he predecease her. Which was granted. His military pay records were accordingly corrected to show that he elected spouse coverage in the SBP in 1977.

B-243489, October 2, 1991

DIGEST: Where the widowed spouse of a member was not notified that the member declined to participate in the Survivor Benefit Plan (SBP), subsequently makes the election through a correction of the member's military records, the member's retired pay, to the extent it was not reduced by SBP premiums, was erroneous and subject to waiver. However, where the collection of such premiums is not against equity and good conscience by virtue of the protection afforded the spouse had the coverage been in effect, as of the date of the constructive election, neither the erroneous retired pay or annuity payments may be waived and they should e offset against SBP benefits subsequently received by the spouse.

Bonnie F. Harrison:

This action is the result of a request by Mrs. Bonnie F. Harrison, widow of Master Sergeant Lawrence E. Harrison, USAF (Retired), for waiver of the government's claim against her for unpaid Survivor Benefit Plan (SBP) premiums. We find that the claim may not be waived.

Sergeant Harrison retired in 1977 and died in 1990. When he retired he declined to participate in the SBP program which would have provided an annuity for his wife should he predecease her. After his death, Mrs. Harrison applied for an SBP annuity, which was granted, payable from April 28, 1990, the day after his death, on the basis of her never having been notified of his declination. His military pay records were accordingly corrected to show that he elected spouse coverage in the SBP in 1977, prior to his retirement. Mrs. Harrison was advised that she was indebted to the government for unpaid SBP premiums from 1977 through April 27, 1990, totaling $13,994.64. She was credited $8,492.02 for SBP benefits payable for the period April 28, 1990, through February 28, 1991. This amount was used to offset the premiums owed for the period November 1, 1977 through April 27, 1990, reducing the debt to $5,502.62. The Air Force and our Claims Group ask whether waiver of part or all of the SBP premium debt is appropriate, i.e., whether a portion of the retired pay which Sergeant Harrison received prior to his death or annuity payments made after his death may be considered erroneous and may be waived and therefore not subject to reduction by the offset of SBP premiums.

Where a member elects not to participate in the SBP, 10 U.S.C. Sec. 1448(a)(3)(A) requires that the spouse be notified of this election. Failure to provide such notice has been held to invalidate the election and restores full coverage under the Plan. Barber v. United States, 230 Cl.Ct. 287 (1982). Since there is no evidence that Mrs. Harrison received notice the Air Force determined that she was entitled to an SBP annuity.

Waiver of claims by the government for the collection of erroneous overpayments of military pay and allowances is provided for by 10 U.S.C. Sec. 2774. The Comptroller General may waive a debt incurred as a result of such overpayments where collection would be against equity and good conscience and not in the best interest of the United States. We have held that when a member's records are corrected such correction dates is retroactive and may make payments, which were proper at the time, now improper or erroneous. 56 Comp.Gen. 587 1977. Thus Sergeant Harrison's retired pay, though proper when paid, became erroneous and subject to waiver when his records were corrected to the extent SBP premiums were not deducted.

However, we do not think waiver is appropriate in this case. Because of the correction of the error involved here, Mrs. Harrison will now receive a regular annuity which otherwise would not have gone to her. Well over half the erroneously uncollected premiums for this annuity have been offset by past due annuity payments. In our view it is not against equity or good conscience to collect the remainder through an appropriate schedule of deductions from her future annuity payments. Cf. Earl G. Smith, B-1888948, June 15, 1977; see Barber, supra. Mrs. Harrison's request for waiver is therefore denied.