B-86001, I-17000-2626, JUN. 9, 1955

B-86001, I-17000-2626, JUN. 9, 1955

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED OCTOBER 22, 1954, WITH ENCLOSURES, FROM THE BUREAU OF NAVAL PERSONNEL, CONCERNING INCREASED ALLOWANCES PAID TO COMMANDER EUGENE SOBCZYK, 95726, USN, AS FOR AN OFFICER WITH A DEPENDENT MOTHER.

BY LETTER DATED SEPTEMBER 3, 1954, THERE WERE TRANSMITTED TO YOU THREE COPIES OF A REPORT OF INVESTIGATION MADE BY OUR REPRESENTATIVES WHICH INDICATED THAT THE MOTHER WAS NOT IN FACT DEPENDENT UPON THE OFFICER FOR CHIEF SUPPORT DURING THE PERIOD JULY 1, 1947, TO MARCH 31, 1949. THE REPORT DISCLOSED THAT DURING THE PERIOD INVOLVED THE LIVING EXPENSES OF THE MOTHER AVERAGED $134 PER MONTH AND THAT SHE HAD INCOME FROM SOURCES OTHER THAN THE OFFICER'S CONTRIBUTIONS IN THE TOTAL AMOUNT OF $2,399.94, OR AN AVERAGE OF $114.54 PER MONTH. THE INCOME CONSISTED OF $900 FROM STOCK DIVIDENDS AND $1,499.94 FROM NINE MONTHLY PAYMENTS OF $166.66 PER MONTH FROM LIFE INSURANCE ON THE OFFICER'S FATHER, WHO DIED IN APRIL 1947. DURING THE SAME PERIOD THE OFFICER HAD AN ALLOTMENT OF $150 PER MONTH TO HIS MOTHER, WHICH, WITH THE EXCEPTION OF $350, WAS DEPOSITED IN A JOINT SAVINGS ACCOUNT OF THE OFFICER AND HIS MOTHER. THE OFFICER CONTENDS THAT THE MONTHLY PAYMENTS OF THE INSURANCE BENEFITS SHOULD NOT BE INCLUDED IN THE INCOME OF HIS MOTHER AND THAT, SINCE HE HAD AN ALLOTMENT OF $150 A MONTH TO HER, SHE SHOULD BE CONSIDERED IN FACT DEPENDENT UPON HIM FOR CHIEF SUPPORT.

RESPECTING THE OFFICER'S CONTENTION THAT THE PAYMENT OF THE INSURANCE BENEFITS SHOULD NOT BE REGARDED AS INCOME, IT HAS BEEN HELD THAT SINCE INSTALLMENT PAYMENTS OF LIFE INSURANCE ARE ORDINARILY PROVIDED TO FURNISH IMMEDIATE AND CONTINUING MEANS OF DIRECT SUPPORT FOR THE BENEFICIARY, RATHER THAN CAPITAL FUNDS FOR INVESTMENT BY THE BENEFICIARY, SUCH PAYMENTS PROPERLY ARE TO BE REGARDED AS INCOME AVAILABLE FOR CURRENT SUPPORT IN DETERMINING WHETHER AN ALLEGED DEPENDENT WAS, OR IS, IN FACT DEPENDENT UPON AN OFFICER FOR CHIEF SUPPORT UNDER THE DEPENDENCY ALLOWANCE STATUTE. HOLMES V. UNITED STATES, 100 C.CLS. 304. AS TO THE OFFICER'S ALLOTMENT OF $150 PER MONTH TO HIS MOTHER, IT DOES NOT APPEAR THAT ANY SUBSTANTIAL PART OF THE ALLOTMENT WAS REQUIRED FOR THE NECESSARY AND PROPER SUPPORT OF THE MOTHER, OR THAT THE AMOUNT RETAINED AND USED BY HER--- $350, OR $16.60 PER MONTH--- CONSTITUTED THE CHIEF PART OF THE AMOUNT REQUIRED FOR HER SUPPORT DURING THE PERIOD JULY 1, 1947, TO MARCH 31, 1949.

ACCORDINGLY, FURTHER CONSIDERATION BY THE DEPARTMENT OF THE NAVY WITH VIEW TOWARD RECOVERY OF THE FULL AMOUNT OF THE INCREASED ALLOWANCES PAID TO THE OFFICER ON ACCOUNT OF HIS MOTHER FOR THE PERIOD JULY 1, 1947, TO MARCH 31, 1949, AND INFORMATION AS TO THE AMOUNT COLLECTED, WILL BE APPRECIATED.