B-37160, OCTOBER 12, 1943, 23 COMP. GEN. 270

B-37160: Oct 12, 1943

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WHICH IS PAYABLE BY THE VETERANS' ADMINISTRATION UNDER AUTHORITY OF THE ACT OF MAY 24. IS ONE OF THE "BENEFITS PAYABLE PURSUANT TO ANY LAW ADMINISTERED BY THE VETERANS' ADMINISTRATION" WITHIN THE MEANING OF SECTION 5 OF THE ACT OF OCTOBER 17. SUCH BENEFIT PAYMENTS ARE NOT AVAILABLE FOR SET-OFF IN LIQUIDATION OF AN INDEBTEDNESS OF AN EMERGENCY OFFICER RESULTING FROM AUTHORIZED PURCHASES ON CREDIT FROM A NAVY COMMISSARY STORE. 1943: I HAVE YOUR LETTER OF SEPTEMBER 22. SO AS TO PROHIBIT COLLECTION BY SET-OFF AGAINST SUCH RETIRED PAY OF AMOUNTS OWING TO A NAVY COMMISSARY STORE FROM WHICH AUTHORIZED PURCHASES ON CREDIT WERE MADE BY SAID OFFICER. IS HEREBY AMENDED BY ADDING AT THE END THEREOF THE FOLLOWING SENTENCE: " FROM AND AFTER THE DATE OF APPROVAL OF THIS AMENDATORY ACT THIS SECTION SHALL BE CONSTRUED TO PROHIBIT THE COLLECTION BY SET-OFF OR OTHERWISE OUT OF ANY BENEFITS PAYABLE PURSUANT TO ANY LAW ADMINISTERED BY THE VETERANS' ADMINISTRATION AND RELATING TO VETERANS.

B-37160, OCTOBER 12, 1943, 23 COMP. GEN. 270

EMERGENCY OFFICERS' RETIRED PAY - AVAILABILITY FOR SET-OFF AGAINST INDEBTEDNESS OWING UNITED STATES EMERGENCY OFFICERS' RETIRED PAY, WHICH IS PAYABLE BY THE VETERANS' ADMINISTRATION UNDER AUTHORITY OF THE ACT OF MAY 24, 1928, AS AMENDED, IS ONE OF THE "BENEFITS PAYABLE PURSUANT TO ANY LAW ADMINISTERED BY THE VETERANS' ADMINISTRATION" WITHIN THE MEANING OF SECTION 5 OF THE ACT OF OCTOBER 17, 1940, PROHIBITING COLLECTION OF CLAIMS OF THE UNITED STATES BY SET-OFF AGAINST CERTAIN VETERANS' BENEFITS, AND, THEREFORE, SUCH BENEFIT PAYMENTS ARE NOT AVAILABLE FOR SET-OFF IN LIQUIDATION OF AN INDEBTEDNESS OF AN EMERGENCY OFFICER RESULTING FROM AUTHORIZED PURCHASES ON CREDIT FROM A NAVY COMMISSARY STORE.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE NAVY, OCTOBER 12, 1943:

I HAVE YOUR LETTER OF SEPTEMBER 22, 1943 ( JAG:K:WJG:HR L-16 4 (4/100), REQUESTING DECISION WHETHER THE RETIRED PAY, PAYABLE BY THE VETERANS' ADMINISTRATION TO FIRST LIEUTENANT PAUL C. GREENE, AS AN EMERGENCY RETIRED OFFICER, UNDER THE ACT OF MAY 24, 1928, AS AMENDED, 38 U.S.C. 581, COMES WITHIN THE CATEGORY OF "BENEFITS PAYABLE PURSUANT TO ANY LAW ADMINISTERED BY THE VETERANS' ADMINISTRATION," WITHIN THE MEANING OF SECTION 5 OF THE ACT OF OCTOBER 17, 1940, 54 STAT. 1195 (38 U.S.C. 454A), SO AS TO PROHIBIT COLLECTION BY SET-OFF AGAINST SUCH RETIRED PAY OF AMOUNTS OWING TO A NAVY COMMISSARY STORE FROM WHICH AUTHORIZED PURCHASES ON CREDIT WERE MADE BY SAID OFFICER.

SECTION 5 OF THE ACT OF OCTOBER 17, 1940, PROVIDES:

THAT SECTION 3 OF PUBLIC LAW NUMBERED 262, SEVENTY-FOURTH CONGRESS APPROVED AUGUST 12, 1935, IS HEREBY AMENDED BY ADDING AT THE END THEREOF THE FOLLOWING SENTENCE: " FROM AND AFTER THE DATE OF APPROVAL OF THIS AMENDATORY ACT THIS SECTION SHALL BE CONSTRUED TO PROHIBIT THE COLLECTION BY SET-OFF OR OTHERWISE OUT OF ANY BENEFITS PAYABLE PURSUANT TO ANY LAW ADMINISTERED BY THE VETERANS' ADMINISTRATION AND RELATING TO VETERANS, THEIR ESTATES, OR THEIR DEPENDENTS OF ANY CLAIM OF THE UNITED STATES OR ANY AGENCY THEREOF AGAINST (A) ANY PERSON OTHER THAN THE INDEBTED BENEFICIARY OR HIS ESTATE; OR (B) ANY BENEFICIARY OR HIS ESTATE EXCEPT AMOUNTS DUE TO THE UNITED STATES BY SUCH BENEFICIARY OR HIS ESTATE BY REASON OF OVERPAYMENTS OR ILLEGAL PAYMENTS MADE UNDER SUCH LAWS RELATING TO VETERANS, TO SUCH BENEFICIARY OR HIS ESTATE OR TO HIS DEPENDENTS AS SUCH: PROVIDED HOWEVER, THAT IF THE BENEFITS BE INSURANCE PAYABLE BY REASON OF YEARLY RENEWABLE TERM OF UNITED STATES GOVERNMENT LIFE (CONVERTED) INSURANCE ISSUED BY THE UNITED STATES, THE EXEMPTION HEREIN PROVIDED SHALL BE INAPPLICABLE TO INDEBTEDNESS EXISTING AGAINST THE PARTICULAR INSURANCE CONTRACT UPON THE MATURITY OF WHICH THE CLAIM IS BASED, WHETHER SUCH INDEBTEDNESS BE IN THE FORM OF LIENS TO SECURE UNPAID PREMIUMS, OR LOANS, OR INTEREST ON SUCH PREMIUMS OR LOANS, OR INDEBTEDNESS ARISING FROM OVERPAYMENTS OF DIVIDENDS, REFUNDS, LOANS, OR OTHER INSURANCE BENEFITS: PROVIDED FURTHER, THAT NOTHING IN THIS AMENDATORY ACT SHALL BE CONSTRUED TO MODIFY OR REPEAL SECTION 7 OF PUBLIC LAW NUMBERED 425, SEVENTY-FOURTH CONGRESS, ENACTED JANUARY 27, 1936 (38 U.S.C. 687-B; 49 STAT. 1101).'

SECTION 581, TITLE 38, U.S.C., PROVIDES, IN PERTINENT PART, AS FOLLOWS:

ALL PERSONS WHO HAVE SERVED AS OFFICERS OF THE ARMY, NAVY, OR MARINE CORPS OF THE UNITED STATES DURING THE WORLD WAR, OTHER THAN AS OFFICERS OF THE REGULAR ARMY, NAVY, OR MARINE CORPS, WHO DURING SUCH SERVICE HAVE INCURRED PHYSICAL DISABILITY IN LINE OF DUTY, AND WHO WERE ON OR BEFORE MAY 24, 1929, RATED IN ACCORDANCE WITH LAW AT NOT LESS THAN 30 PERCENTUM PERMANENT DISABILITY BY THE VETERANS' ADMINISTRATION FOR DISABILITY RESULTING DIRECTLY FROM SUCH WAR SERVICE, SHALL, FROM DATE OF RECEIPT OF APPLICATION BY THE ADMINISTRATOR OF VETERANS' AFFAIRS, BE PLACED UPON, AND THEREAFTER CONTINUED ON, SEPARATE RETIRED LISTS, HEREBY CREATED AS PART OF THE ARMY, NAVY AND MARINE CORPS OF THE UNITED STATES, TO BE KNOWN AS THE EMERGENCY OFFICERS' RETIRED LIST OF THE ARMY, NAVY, OR MARINE CORPS OF THE UNITED STATES, RESPECTIVELY, WITH THE RANK HELD BY THEM WHEN DISCHARGED FROM THEIR COMMISSIONED SERVICE, AND SHALL BE ENTITLED TO THE SAME PRIVILEGES AS WERE ON MAY 24, 1928, OR MAY THEREAFTER BE PROVIDED FOR BY LAW OR REGULATIONS FOR OFFICERS OF THE REGULAR ARMY, NAVY, OR MARINE CORPS WHO HAVE BEEN RETIRED FOR PHYSICAL DISABILITY INCURRED IN LINE OF DUTY, AND SHALL BE ENTITLED TO ALL HOSPITALIZATION PRIVILEGES AND MEDICAL TREATMENT AS WERE ON MAY 24, 1928, OR MAY THEREAFTER BE AUTHORIZED BY THE VETERANS' ADMINISTRATION, AND SHALL RECEIVE FROM DATE OF RECEIPT OF THEIR APPLICATION RETIRED PAY AT THE RATE OF 75 PERCENTUM OF THE PAY TO WHICH THEY WERE ENTITLED AT THE TIME OF THEIR DISCHARGE FROM THEIR COMMISSIONED SERVICE, EXCEPT PAY UNDER THE ACT OF MAY 18, 1920: PROVIDED, THAT ALL PAY AND ALLOWANCES TO WHICH SUCH PERSONS OR OFFICERS MAY BE ENTITLED UNDER THE PROVISIONS OF THIS LAW SHALL BE PAID SOLELY OUT OF THE MILITARY AND NAVAL COMPENSATION APPROPRIATION FUND OF THE VETERANS' ADMINISTRATION, AND SHALL BE IN LIEU OF ALL DISABILITY COMPENSATION BENEFITS TO SUCH OFFICERS OR PERSONS PROVIDED IN CHAPTER 10 OF THIS TITLE, EXCEPT AS OTHERWISE AUTHORIZED HEREIN: * * *

THUS, UNDER THE PROVISIONS OF LAW LAST QUOTED ABOVE, EMERGENCY OFFICERS OF THE ARMY, NAVY, AND MARINE CORPS RATED AT NOT LESS THAN 30 PERCENTUM PERMANENT DISABILITY BY THE VETERANS' ADMINISTRATION, UPON APPLICATION TO AND ACTION BY THE VETERAN'S ADMINISTRATION, ARE ENTITLED TO PAY AND ALLOWANCES IN LIEU OF ALL DISABILITY COMPENSATION BENEFITS, AND SUCH PAY AND ALLOWANCES ARE PAYABLE SOLELY FROM THE MILITARY AND NAVAL COMPENSATION APPROPRIATION FUND OF THE VETERANS' ADMINISTRATION. CLEARLY, THE ACT IN QUESTION IS ONE FOR ADMINISTERING BY THE VETERANS' ADMINISTRATION. HOWEVER, THE REAL QUESTION HERE IS WHETHER EMERGENCY OFFICERS' RETIRED PAY IS A ,BENEFIT" WITHIN THE MEANING OF THE TERM AS USED IN SECTION 5 OF THE ACT OF OCTOBER 17, 1940, SUPRA.

UNDER THE EXPRESS TERMS OF THE ACT OF MAY 24, 1928, AS AMENDED, THE RETIRED PAY PROVIDED THEREUNDER IS "IN LIEU OF ALL DISABILITY COMPENSATION BENEFITS.' IN THE DECISION 19 COMP. GEN. 676, INVOLVING THE QUESTION OF WHETHER SUCH RETIRED PAY WAS A "PENSION" WITHIN THE MEANING OF SECTION 7 OF THE EMPLOYEES' COMPENSATION ACT OF SEPTEMBER 7, 1916, 39 STAT. 743, AND, THEREFORE, SPECIFICALLY EXCEPTED FROM THE CONCURRENT PAYMENTS PROHIBITION OF THE SAID SECTION, IT WAS STATED:

* * * SINCE DISABILITY COMPENSATION UNDER VETERANS' LEGISLATION HAS BEEN HELD TO BE IN THE NATURE OF A PENSION, AND SINCE EMERGENCY OFFICERS' RETIRED PAY IS IN LIEU OF DISABILITY COMPENSATION PAYABLE UNDER VETERANS' LEGISLATION AND IS PAID FROM THE APPROPRIATION PROVIDED FOR THE PAYMENT OF VETERANS' DISABILITY COMPENSATION, IT APPEARS REASONABLE TO CONCLUDE THAT, BY APPLYING THE RULE STATED IN 2 COMP. GEN. 582, THE RETIRED PAY FOR DISABILITY AUTHORIZED UNDER THE STATUTES LAST ABOVE QUOTED IS LIKEWISE IN THE NATURE OF A "PENSION" FOR SERVICE IN THE ARMY OR NAVY WITHIN THE MEANING OF THE TERM "PENSIONS" AS USED IN THE EXCEPTION EMBODIED IN SECTION 7 OF THE EMPLOYEES' COMPENSATION ACT. SEE 36, OP. ATTY. GEN. 227, AT PAGES 229, 230, AND AUTHORITIES THEREIN CITED.

SINCE EMERGENCY OFFICERS' RETIRED PAY IS IN LIEU OF DISABILITY COMPENSATION AND SINCE DISABILITY COMPENSATION UNDER VETERANS' LEGISLATION IS REGARDED AS PENSION (15 COMP. GEN. 498, 507), AND, SINCE PENSIONS ARE CLEARLY BENEFITS PAYABLE UNDER VETERANS' LEGISLATION, IT NECESSARILY FOLLOWS THAT EMERGENCY OFFICERS' RETIRED PAY IS ONE OF THE "BENEFITS PAYABLE PURSUANT TO ANY LAW ADMINISTERED BY THE VETERANS' ADMINISTRATION," AND, AS SUCH, NOT AVAILABLE FOR SET-OFF IN LIQUIDATION OF THE INDEBTEDNESS HERE INVOLVED.

HOWEVER, COLLECTION OF AN OTHERWISE PROPER INDEBTEDNESS DUE FROM THE DEBTOR VETERAN IS NOT NECESSARILY FORECLOSED OR BARRED IF ASSETS FROM SOURCES OTHER THAN THOSE REFERRED TO IN SECTION 5 OF THE ACT OF OCTOBER 17, 1940, ARE AVAILABLE FOR THAT PURPOSE; AND THE CHIEF OF FINANCE, WAR DEPARTMENT, WAS SO ADVISED UNDER DATE OF JANUARY 29, 1941, B-13540, IN CONNECTION WITH AN INDEBTEDNESS OF THE SAME OFFICER HERE INVOLVED, RESULTING FROM CREDITS EXTENDED TO HIM IN THE PURCHASE OF COMMISSARY SUPPLIES, ETC. IN THAT INSTANCE A STATEMENT OF ACCOUNT AGAINST THE OFFICER SHOWING THE AMOUNT DUE WAS FURNISHED THIS OFFICE FOR THE PURPOSE OF RAISING A DIRECT CHARGE AGAINST HIM. ACCORDINGLY, IF THERE BE FURNISHED THIS OFFICE AN ITEMIZED AUTHENTICATED RECORD OF THE PRESENT INDEBTEDNESS OF FIRST LIEUTENANT PAUL C. GREENE, SHOWING THE SAME TO BE PROPER CHARGE DUE THE UNITED STATES, THIS OFFICE WILL CONSIDER THE PROPRIETY OF RAISING A DIRECT CHARGE AGAINST SAID OFFICER.

THE "APPLICATION FOR PRIVILEGE OF BUYING FROM THE NAVY COMMISSARY STORE, SAN DIEGO" ACCOMPANYING YOUR LETTER IS RETURNED HEREWITH AS REQUESTED.