B-86001/M), I-17000-3171, FEB. 6, 1956

B-86001/M), I-17000-3171, FEB. 6, 1956

TO THE HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED JUNE 7, 1955, FROM THE CHIEF OF FINANCE, CONCERNING INCREASED RENTAL AND SUBSISTENCE ALLOWANCE PAYMENTS AND SAVED TOTAL COMPENSATION PAYMENTS MADE TO FIRST LIEUTENANT ROBERT MOGUL, 0-1535243, NSC, USA, AS FOR AN OFFICER WITH A DEPENDENT FATHER FOR THE PERIOD MARCH 1, 1949, TO SEPTEMBER 30, 1950. THE PAYMENTS WERE QUESTIONED IN A REPORT OF INVESTIGATION TRANSMITTED TO YOU WITH OUR LETTER OF MAY 3, 1955.

THE INVESTIGATION, INCLUDING A PERSONAL INTERVIEW WITH THE OFFICER'S MOTHER, FATHER, AND THE ACCOUNTANT WHO HANDLED THEIR BUSINESS AFFAIRS, DISCLOSED THAT DURING THE PERIOD INVOLVED THE PARENTS, THEIR SON, JEROME MOGUL, THEIR DAUGHTER, MRS. FLORENCE LEAL, THEIR GRANDDAUGHTER, SUSAN LEAL, AND THE MOTHER'S BROTHER, LOUIS HIRSH, ALL LIVED TOGETHER IN A HOUSE OWNED JOINTLY BY THE MOTHER AND HER BROTHER, BUT THAT THE LATTER DID NOT HAVE ANY OF HIS MEALS WITH THE FAMILY. MRS. LEAL CONTRIBUTED $40 A MONTH TOWARD THE COMMON EXPENSES OF THE HOUSEHOLD. JEROME MOGULWAS A STUDENT AT THE COLLEGE OF THE CITY OF NEW YORK AND RECEIVED FROM HIS PARENTS AN ALLOWANCE OF $40 A MONTH FROM MARCH 1 TO AUGUST 31, 1949, AND $55 A MONTH FROM SEPTEMBER 1, 1949, TO SEPTEMBER 30, 1950.

SINCE THE OFFICER'S MOTHER AND FATHER LIVED TOGETHER DURING THE PERIODS INVOLVED THE DEPENDENCY STATUS OF EITHER, OR BOTH, MUST BE DETERMINED ON THE BASIS OF THE FAMILY UNIT. IN ANY CASE WHERE ONE HALF OR MORE OF THE FUNDS NORMALLY AVAILABLE FOR THE LIVING EXPENSES OF BOTH PARENTS IS RECEIVED FROM SOURCES OTHER THAN THE OFFICER, NEITHER PARENT IS IN FACT DEPENDENT ON THE OFFICER FOR CHIEF SUPPORT.

THE PARENTS' AVERAGE MONTHLY LIVING EXPENSES AND INCOME AS ESTIMATED BY THEM AND THEIR ACCOUNTANT AT THE TIME OF THE INTERVIEW ARE SHOWN IN THE REPORT OF INVESTIGATION TO HAVE BEEN AS FOLLOWS:

TABLE

PERIODS EXPENSES INCOME MARCH 1 TO JUNE 30, 1949

$293 $115 JULY 1 TO AUGUST 31, 1949 260 115 SEPTEMBER 1 TO DECEMBER 31, 1949 290 161 JANUARY 1 TO SEPTEMBER 30, 1950

293 185

THE STATED AVERAGE MONTHLY LIVING EXPENSES OF THE PARENTS WAS COMPUTED BY DEDUCTING THE AMOUNT CONTRIBUTED BY FLORENCE LEAL FROM THE GROSS COMMON EXPENSES OF THE ENTIRE HOUSEHOLD AND ADDING THE REMAINDER OF THE COMMON HOUSEHOLD EXPENSES TO THE AMOUNT OF THE PARENTS' PERSONAL EXPENSES, WHICH INCLUDED THE MONTHLY ALLOWANCE TO JEROME. THE AVERAGE MONTHLY INCOME OF THE PARENTS WAS COMPUTED BY ADDING THEIR AVERAGE MONTHLY SALARIES TO THE MOTHER'S NET INCOME FROM HER RENTAL PROPERTY. THE OFFICER IS STATED TO HAVE CONTRIBUTED $120 A MONTH BY AN ALLOTMENT FROM HIS PAY.

IT HAS BEEN SUGGESTED THAT IN CASES SUCH AS THIS THE FAMILY UNIT BE CONSIDERED AS THE PARENTS OF A MEMBER AND THEIR MINOR CHILDREN (NOT FULLY EMPLOYED) RESIDING IN THE SAME HOUSEHOLD AND THAT, WHERE PERSONS OTHER THAN THE FAMILY UNIT LIVE IN THE SAME HOUSEHOLD, THE EXPENSES OF THE FAMILY UNIT BE DETERMINED BY ADDING TO THE PERSONAL EXPENSES OF THE FAMILY UNIT A PRO RATA SHARE OF THE HOUSEHOLD EXPENSES COMPUTED AT THE RATE OF TWO UNITS OF EXPENSE FOR ADULTS AND FULLY EMPLOYED MINORS AND ONE UNIT OF EXPENSE FOR MINORS NOT EMPLOYED. WE SEE NO BASIS FOR SUPPOSING THAT GENERALLY THE PRO RATA SHARE OF ORDINARY HOUSEHOLD EXPENSES IS MATERIALLY LESS FOR MINORS THAN FOR ADULTS, WHERE ALL LIVE TOGETHER IN A COMMON HOUSEHOLD, IRRESPECTIVE OF WHETHER THE MINORS ARE OR ARE NOT FULLY EMPLOYED, AND HENCE THE SUGGESTED METHOD APPEARS TOO SPECULATIVE FOR US TO ADOPT AS A STANDARD.

GENERALLY THE LIVING EXPENSES OF YOUNG CHILDREN ARE TO BE INCLUDED AS EXPENSES OF THE PARENT, OR PARENTS, AND FOR DEPENDENCY PURPOSES, THEY ARE TO BE REGARDED AS MEMBERS OF THE FAMILY UNIT WHILE LIVING AT HOME. FROM ALL THAT APPEARS IN THE PRESENT CASE, HOWEVER, THE SON, JEROME MOGUL, GOING TO COLLEGE, WAS OVER 18 YEARS OLD AND CAPABLE OF SELF-SUPPORT. REASON IS APPARENT WHY HIS EXPENSES SHOULD BE TREATED AS PART OF HIS PARENTS' EXPENSES IN DETERMINING WHETHER THE PARENTS WERE DEPENDENT FOR THEIR CHIEF SUPPORT ON THEIR OFFICER SON IN THE ARMED SERVICES. WERE THE OFFICER'S CONTRIBUTIONS USED TO SUPPORT HIS PARENTS OR HIS BROTHER IN COLLEGE?

WHILE SECTION 102 (G) OF THE CAREER COMPENSATION ACT, 37 U.S.C. 231 (G), RECOGNIZES A MEMBER'S OWN CHILDREN AS HIS DEPENDENTS UNTIL THEY ARE 21 YEARS OLD, IT DOES NOT RECOGNIZE A BROTHER OR SISTER AS A DEPENDENT IN ANY EVENT AND THEY SHOULD NOT BE RECOGNIZED INDIRECTLY, AT GOVERNMENT EXPENSE, AS SUCH DEPENDENTS (BY TREATING THEIR LIVING EXPENSES AS PART OF THEIR PARENTS' LIVING EXPENSES) AFTER THEY REACH THAT AGE AND CONDITION GENERALLY ACCEPTED AS MAKING THEM CAPABLE OF SELF-SUPPORT. IN THAT RESPECT IT MAY BE POINTED OUT, FOR EXAMPLES, THAT THE WORLD WAR VETERANS ACT, AS AMENDED, 38 U.S.C. 472 (F) (3) DISCONTINUES THE PAYMENT OF DEATH COMPENSATION TO VETERANS' CHILDREN WHEN THEY REACH THE AGE OF EIGHTEEN YEARS, UNLESS PERMANENTLY INCAPABLE OF SELF-SUPPORT; THE SOCIAL SECURITY ACT, 42 U.S.C. 402 (D) (C) AND 606, RECOGNIZES A CHILD AS A DEPENDENT ONLY UNTIL IT REACHES THE AGE OF EIGHTEEN; THE CIVIL SERVICE RETIREMENT ACT, 5 U.S.C. 724 (C) (4), TERMINATES THE ANNUITY PAYABLE TO A CHILD UPON THE DEATH OF A CIVIL OFFICER OR EMPLOYEE WHEN THE CHILD ATTAINS THE AGE OF EIGHTEEN YEARS, UNLESS SUCH CHILD IS INCAPABLE OF SELF-SUPPORT; AND, LIKEWISE, SECTION 2F OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 501, 37 U.S.C. 371 (F), BY DEFINITION OF THE WORD "CHILD," RESTRICTS THE PAYMENT OF ANNUITIES UNDER THAT ACT TO CHILDREN OF DECEASED RETIRED MEMBERS OF THE UNIFORMED SERVICES TO THOSE UNDER EIGHTEEN YEARS OF AGE, EXCEPT THOSE INCAPABLE OF SELF-SUPPORT.

IN THE FACE OF THIS EVIDENCE OF LEGISLATIVE POLICY AS TO THE AGE WHEN GOVERNMENT DEPENDENCY BENEFITS FOR CHILDREN CAPABLE OF SELF SUPPORT SHALL STOP, WE MUST CONCLUDE THAT THE LIVING EXPENSES OF CHILDREN OVER EIGHTEEN YEARS OF AGE AND CAPABLE OF SELF-SUPPORT MAY NOT BE INCLUDED IN THE LIVING EXPENSES OF THEIR PARENTS TO ESTABLISH A RIGHT UNDER THE STATUTES HERE INVOLVED TO DEPENDENCY ALLOWANCES ON ACCOUNT OF THE PARENTS. IT FOLLOWS THAT, ON THE PRESENT RECORD, THE PROPORTIONATE SHARE OF THE HOUSEHOLD EXPENSES ATTRIBUTABLE TO JEROME MOGUL AND THE ALLOWANCE FURNISHED HIM BY HIS PARENTS MAY NOT BE INCLUDED AS A LIVING EXPENSE OF THE PARENTS. DURING THE PERIODS HERE IN QUESTION THE MOGUL HOUSEHOLD CONSISTED OF SIX PERSONS, ONE OF WHOM DID NOT HAVE ANY MEALS WITH THE FAMILY. FOR THE PERIOD MARCH 1 TO JUNE 30, 1949, THE COMMON EXPENSES OF THE ENTIRE HOUSEHOLD, EXCLUSIVE OF THE COST OF FOOD, AMOUNTED TO $54.36 A MONTH. FOR THE PERIOD FROM JULY 1 TO AUGUST 31, 1949, THEY AMOUNTED TO $21.61 A MONTH. IT WAS ESTIMATED THAT $173 A MONTH WAS EXPENDED FOR FOOD. ON THAT BASIS, THE PARENTS' MONTHLY LIVING EXPENSES FOR THE PERIOD MARCH 1 TO JUNE 30, 1949, SHOULD HAVE BEEN COMPUTED AS $153.19, AND FOR THE PERIOD JULY 1 TO AUGUST 31, 1949, AS $142.27, REPRESENTING TWO-SIXTHS OF THE COMMON HOUSEHOLD EXPENSES (LESS THE COST OF FOOD), TWO-FIFTHS OF THE COST OF FOOD, AND THE PERSONAL EXPENSES SHOWN FOR THE PARENTS, LESS THE ALLOWANCE GIVEN TO JEROME. SINCE THE PARENTS' AVERAGE INCOME OF $115 A MONTH WAS MORE THAN ONE-HALF OF THEIR AVERAGE MONTHLY LIVING EXPENSES DURING THOSE PERIODS, AS SO COMPUTED, THEY MAY NOT BE CONSIDERED AS HAVING BEEN DEPENDENT ON THE OFFICER FOR CHIEF SUPPORT REGARDLESS OF THE AMOUNT OF HIS CONTRIBUTIONS.

FOR THE PERIOD SEPTEMBER 1, 1949, TO JULY 31, 1950, THE PARENTS' AVERAGE MONTHLY INCOME NOT ONLY WAS MORE THAN ONE-HALF OF THEIR AVERAGE MONTHLY LIVING EXPENSES BUT WAS MORE THAN THE OFFICER'S CONTRIBUTIONS, SO THAT QUITE OBVIOUSLY THEY WERE NOT DEPENDENT ON THE OFFICER FOR CHIEF SUPPORT DURING THAT PERIOD.

UPON REVIEW OF THE MATTER, NO BASIS IS FOUND FOR CHANGING THE CONCLUSION REACHED IN OUR REPORT OF INVESTIGATION THAT NEITHER PARENT WAS IN FACT DEPENDENT ON THE OFFICER FOR CHIEF SUPPORT WITHIN THE MEANING OF THE APPLICABLE STATUTES DURING THE PERIOD MARCH 1, 1949, TO JULY 31, 1950.

IN VIEW OF THE PROVISIONS OF THE DEPENDENTS ASSISTANCE ACT OF 1950, 64 STAT. 794, NO DETERMINATION IS MADE HERE CONCERNING THE PAYMENTS MADE TO THE OFFICER AFTER JULY 31, 1950. SEE 30 COMP. GEN. 282.

WE WILL APPRECIATE INFORMATION AS TO THE AMOUNTS COLLECTED BY THE DEPARTMENT OF THE ARMY ON ACCOUNT OF THE IMPROPER PAYMENTS MADE TO LIEUTENANT MOGUL.