B-121540, APRIL 8, 1955, 34 COMP. GEN. 504

B-121540: Apr 8, 1955

Additional Materials:

Contact:

Shirley Jones
(202) 512-8156
jonessa@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

BEFORE COMPUTING THE TWO-THIRDS PAY WHICH IS AVAILABLE FOR THE DEBT REDUCTION PURPOSES. ONLY THOSE DEBTS DUE THE UNITED STATES WHICH ARE NOT COVERED BY THE ACT OF JULY 15. THE INACTIVE DUTY PAY OF A SERVICE MEMBER IS PAY WITHIN THE MEANING OF THE ACT OF JULY 15. THE INACTIVE DUTY PAY OF A SERVICE MEMBER IS AVAILABLE TO SATISFY ANY INDEBTEDNESS ARISING DURING EITHER ACTIVE OR INACTIVE DUTY. MAY BE DEDUCTED FROM THE PAY OF MEMBERS OF THE MILITARY SERVICES WHO ARE INDEBTED TO THE GOVERNMENT AS A RESULT OF ERRONEOUS PAYMENTS MAY BE APPLIED TO THE RETIRED AND RETAINER PAY OF MEMBERS TO SATISFY AN INDEBTEDNESS WHICH OCCURRED WHILE ON ACTIVE DUTY. DECISION IS LEFT TO THE ADMINISTRATIVE OFFICE WHETHER.

B-121540, APRIL 8, 1955, 34 COMP. GEN. 504

SET-OFF - DEBT COLLECTION - ERRONEOUS PAYMENTS TO MILITARY PERSONNEL - ACT OF JULY 15, 1954 IN DETERMINING THE MAXIMUM AMOUNT THAT MAY BE INVOLUNTARILY WITHHELD FROM THE PAY OF MILITARY PERSONNEL UNDER THE ACT OF JULY 15, 1954, WHICH RELATES TO THE COLLECTION OF DEBTS DUE THE UNITED STATES RESULTING FROM ERRONEOUS PAYMENTS, THE BASIC ALLOWANCE FOR QUARTERS SHOULD BE USED TO THE FULLEST EXTENT TO COVER THE CLASS Q ALLOTMENT, AND ONLY THE BALANCE SHOULD BE DEDUCTED FROM THE BASIC PAY, ETC., BEFORE COMPUTING THE TWO-THIRDS PAY WHICH IS AVAILABLE FOR THE DEBT REDUCTION PURPOSES. AMOUNTS DUE FOR TRAVEL ALLOWANCES OF OFFICERS AND REIMBURSEMENT OF COST OF TRANSPORTATION OF DEPENDENTS AND HOUSEHOLD GOODS OF BOTH OFFICERS AND ENLISTED MEN ON SEPARATION OR RETIREMENT MAY BE SET OFF AGAINST DEBTS DUE THE UNITED STATES AS A RESULT OF ERRONEOUS PAYMENTS PURSUANT TO THE ACT OF JULY 15, 1954, WHICH AUTHORIZES THE WITHHOLDING OF PAY OF MILITARY PERSONNEL TO SATISFY SUCH DEBTS. UNDER THE ACT OF MAY 22, 1928, WHICH PERMITS THE REMISSION OF DEBTS ADMINISTRATIVELY DETERMINED TO BE DUE FROM ENLISTED MEMBERS, ONLY THOSE DEBTS DUE THE UNITED STATES WHICH ARE NOT COVERED BY THE ACT OF JULY 15, 1954, AUTHORIZING THE WITHHOLDING OF PAY OF MILITARY PERSONNEL TO SATISFY AN INDEBTEDNESS RESULTING FROM ERRONEOUS PAYMENTS, MAY BE REMITTED. UNDER THE ACT OF JULY 15, 1954, WHICH AUTHORIZES THE WITHHOLDING OF PAY OF MILITARY PERSONNEL TO SATISFY ANY INDEBTEDNESS RESULTING FROM ERRONEOUS PAYMENTS, ONLY THOSE LUMP-SUM LEAVE PAYMENTS ACCRUING UNDER SECTION 4 (C) OF THE ARMED FORCES LEAVE ACT OF 1946 MAY BE USED TO LIQUIDATE MILITARY PERSONNEL INDEBTEDNESS RESULTING FROM ERRONEOUS PAYMENTS. THE INACTIVE DUTY PAY OF A SERVICE MEMBER IS PAY WITHIN THE MEANING OF THE ACT OF JULY 15, 1954, WHICH PROVIDES FOR THE WITHHOLDING OF PAY OF MEMBERS OF THE UNIFORMED SERVICES TO SATISFY ANY INDEBTEDNESS RESULTING FROM ERRONEOUS PAYMENTS, AND, THEREFORE, THE INACTIVE DUTY PAY OF A SERVICE MEMBER IS AVAILABLE TO SATISFY ANY INDEBTEDNESS ARISING DURING EITHER ACTIVE OR INACTIVE DUTY. THE TWO-THIRDS LIMITATION ON THE AMOUNTS WHICH, PURSUANT TO THE ACT OF JULY 15, 1954, MAY BE DEDUCTED FROM THE PAY OF MEMBERS OF THE MILITARY SERVICES WHO ARE INDEBTED TO THE GOVERNMENT AS A RESULT OF ERRONEOUS PAYMENTS MAY BE APPLIED TO THE RETIRED AND RETAINER PAY OF MEMBERS TO SATISFY AN INDEBTEDNESS WHICH OCCURRED WHILE ON ACTIVE DUTY. WHILE THE ACT OF JULY 15, 1954, WHICH AUTHORIZES THE WITHHOLDING OF THE PAY OF MEMBERS OF THE MILITARY PERSONNEL TO SATISFY INDEBTEDNESS RESULTING FROM ERRONEOUS PAYMENTS, PROVIDES THAT COLLECTION SHALL BE EFFECTED OVER A PERIOD NOT GREATER THAN THE ANTICIPATED PERIOD OF ACTIVE DUTY, DECISION IS LEFT TO THE ADMINISTRATIVE OFFICE WHETHER, AND TO WHAT EXTENT, AN AMOUNT IN EXCESS OF TWO-THIRDS OF SUCH PAY SHALL BE WITHHELD IN A PARTICULAR CASE. INASMUCH AS THE ACT OF JULY 15, 1954, WHICH AUTHORIZES THE WITHHOLDING OF PAY TO SATISFY INDEBTEDNESS RESULTING FROM ERRONEOUS PAYMENTS, CONTEMPLATES THAT THE DETERMINATIONS OF INDEBTEDNESS BE MADE WHILE THE DEBTOR IS A "MEMBER" EITHER ON THE ACTIVE LIST, OR ON THE RETIRED LIST, OR OF A RESERVE COMPONENT, ERRONEOUS PAYMENTS PREVIOUSLY MADE TO PERSONS WHO WERE NOT MEMBERS ON THE DATE OF THE ACT AND WHO SUBSEQUENTLY DO NOT BECOME MEMBERS ARE NOT COVERED BY THE ACT; HOWEVER, WHEN SUCH A DETERMINATION HAS BEEN MADE, THE AUTHORITY TO COLLECT BY DEDUCTIONS FROM THE PAYMENTS SPECIFIED IN THE ACT CONTINUES EVEN THOUGH THE DEBTOR CEASES TO BE A "MEMBER.'

ASSISTANT COMPTROLLER GENERAL WEITZEL TO THE SECRETARY OF DEFENSE, APRIL 8, 1955:

REFERENCE IS MADE TO LETTER OF DECEMBER 7, 1954, FROM THE ASSISTANT SECRETARY OF DEFENSE, REQUESTING DECISION ON EIGHT QUESTIONS WHICH HAVE ARISEN IN IMPLEMENTING THE ACT OF JULY 15, 1954, 68 STAT. 482, AS SET FORTH AND DISCUSSED IN COMMITTEE ACTION NO. 110 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, SOME OF WHICH INVOLVE CERTAIN MATTERS CONSIDERED IN DECISION DATED OCTOBER 11, 1954, B 121540, 34 COMP. GEN. 164.

SECTION 1 OF THE ACT OF JULY 15, 1954, 68 STAT. 482, IS AS FOLLOWS:

THAT, WHEN IT IS DETERMINED BY THE SECRETARY OF THE DEPARTMENT CONCERNED OR THE HEAD OF THE AGENCY OR INDEPENDENT ESTABLISHMENT CONCERNED, OR ONE OF THEIR DESIGNEES, THAT AN EMPLOYEE OF THE UNITED STATES OR ANY MEMBER OF THE ARMY, NAVY, AIR FORCE, MARINE CORPS, OR COAST GUARD, OR A RESERVE COMPONENT THEREOF, IS INDEBTED TO THE UNITED STATES AS THE RESULT OF ANY ERRONEOUS PAYMENT MADE BY THE DEPARTMENT, AGENCY, OR INDEPENDENT ESTABLISHMENT CONCERNED TO OR ON BEHALF OF ANY SUCH PERSON, THE AMOUNT OF THE INDEBTEDNESS MAY BE COLLECTED IN MONTHLY INSTALLMENTS, OR AT OFFICIALLY ESTABLISHED REGULAR PAY PERIOD INTERVALS, BY DEDUCTION IN REASONABLE AMOUNTS FROM THE CURRENT PAY ACCOUNT OF SUCH PERSON. THE DEDUCTIONS MAY BE MADE ONLY FROM BASIC COMPENSATION, BASIC PAY, SPECIAL PAY, AND INCENTIVE PAY, RETIRED PAY, RETAINER PAY, OR IN THE CASE OF PERSONS NOT ENTITLED TO BASIC PAY, OTHER AUTHORIZED PAY. COLLECTION SHALL BE EFFECTED OVER A PERIOD NOT GREATER THAN THE ANTICIPATED PERIOD OF ACTIVE DUTY OR PERIOD OF EMPLOYMENT, AS THE CASE MAY BE. THE AMOUNT DEDUCTED FOR ANY PERIOD SHALL NOT EXCEED AN AMOUNT EQUAL TO TWO-THIRDS OF THE PAY FROM WHICH THE DEDUCTION IS MADE, UNLESS THE DEDUCTION OF A GREATER AMOUNT IS NECESSARY TO EFFECT COLLECTION WITHIN THE PERIOD OR ANTICIPATED PERIOD OF ACTIVE DUTY OR EMPLOYMENT. IF SUCH INDIVIDUAL RETIRES, RESIGNS, OR HIS EMPLOYMENT OR PERIOD OF ACTIVE DUTY IS OTHERWISE TERMINATED BEFORE SUCH ADJUSTMENT HAS BEEN COMPLETED, ADJUSTMENT SHALL BE MADE BY DECREASING SUBSEQUENT PAYMENTS, OF WHATEVER NATURE, DUE SUCH PERSON BY THE DEPARTMENT, AGENCY, OR INDEPENDENT ESTABLISHMENT CONCERNED. NOTHING IN THIS SECTION SHALL MODIFY ANY EXISTING LAW WHICH PROVIDES FOR FORFEITURE OF PAY OR ALLOWANCES.

IT WAS HELD IN THE DECISION OF OCTOBER 11, 1954, THAT WITHHOLDING TAX AND ALLOTMENTS IN SUPPORT OF BASIC ALLOWANCE FOR QUARTERS (CLASS Q ALLOTMENTS) SHOULD BE DEDUCTED FROM BASIC PAY, SPECIAL PAY, AND INCENTIVE PAY BEFORE COMPUTATION IS MADE OF THE TWO-THIRDS PAY WHICH MAY BE WITHHELD UNDER THE 1954 ACT TO LIQUIDATE AN INDEBTEDNESS. QUESTION ONE NOW PRESENTED IS AS FOLLOWS:

1. IN DETERMINING THE AMOUNT THAT MAY BE INVOLUNTARILY WITHHELD FROM A MEMBER'S PAY TO COLLECT AN INDEBTEDNESS CAUSED BY AN ERRONEOUS PAYMENT UNDER THE ACT AND THE ACTING COMPTROLLER GENERAL'S DECISIONB 121540, DATED 11 OCTOBER 1954, MAY PART OF THE AMOUNT OF CLASS Q ALLOTMENT BE DEDUCTED FROM ANY BASIC ALLOWANCES DUE THE MEMBER, AND THE BALANCE BE DEDUCTED FROM HIS PAY?

THE PROVISION IN SECTION 1 OF THE 1954 ACT THAT THE MONTHLY INSTALLMENTS TO LIQUIDATE AN INDEBTEDNESS ARISING FROM ERRONEOUS PAYMENTS "MAY BE MADE ONLY FROM BASIC COMPENSATION, BASIC PAY, SPECIAL PAY, AND INCENTIVE PAY," APPARENTLY WAS INTENDED TO BAR THE WITHHOLDING OF ALLOWANCES TO APPLY ON SUCH DEBTS. THE CONCLUSION THAT A CLASS Q ALLOTMENT WAS TO BE DEDUCTED FROM BASIC PAY, ETC., BEFORE DETERMINING THE TWO-THIRDS PAY WHICH MAY BE USED TO LIQUIDATE AN INDEBTEDNESS WAS BASED ON THE PROVISIONS OF THE DEPENDENTS ASSISTANCE ACT OF 1950, 64 STAT. 794. WHILE THAT ACT REFERS TO "AN ALLOTMENT OF PAY," IT IS CLEAR THAT THE REQUIRED ALLOTMENT FREQUENTLY IS IN EXCESS OF A MEMBER'S BASIC PAY AND, HENCE, IT MUST HAVE BEEN CONTEMPLATED THAT IN MANY INSTANCES SUCH ALLOTMENT WOULD BE CHARGED, IN PART AT LEAST, AGAINST OTHER AMOUNTS DUE THE MEMBER. THE AMOUNT OF THE BASIC ALLOWANCE FOR QUARTERS SERVES AS A BASIS FOR FIXING THE AMOUNT OF THE CLASS Q ALLOTMENT REQUIRED AND, SINCE THE CREDITS IN AN ENLISTED MAN'S ACCOUNT AVAILABLE TO COVER HIS CLASS Q ALLOTMENT INCLUDES HIS BASIC ALLOWANCE FOR QUARTERS, NO REASON IS PERCEIVED WHY, FOR THE PURPOSES OF THE ACT OF JULY 15, 1954, THE BASIC ALLOWANCE FOR QUARTERS SHOULD NOT BE USED TO THE FULLEST EXTENT POSSIBLE TO COVER THE ALLOTMENT, ONLY THE BALANCE REMAINING TO BE DEDUCTED FROM BASIC PAY, ETC., BEFORE COMPUTING THE TWO THIRDS PAY WHICH IS AVAILABLE FOR DEBT REDUCTION PURPOSES UNDER THAT ACT. QUESTION ONE IS ANSWERED ACCORDINGLY.

2. ARE TRAVEL ALLOWANCES OF OFFICERS, AND REIMBURSEMENT OF COST OF TRANSPORTATION OF DEPENDENTS AND HOUSEHOLD GOODS OF BOTH OFFICERS AND ENLISTED MEN ON SEPARATION OR RETIREMENT AVAILABLE FOR SET-OFF AGAINST DEBTS CAUSED BY ERRONEOUS PAYMENTS?

EXCEPT FOR THE PAYMENT OF MILEAGE FOR THE TRAVEL OF OFFICERS UPON SEPARATION OR RETIREMENT, THE SAME QUESTION WAS CONSIDERED IN THE DECISION OF OCTOBER 11, 1954. IT WAS HELD THAT, WHILE AMOUNTS DUE AS REIMBURSEMENT FOR THE TRANSPORTATION OF DEPENDENTS AND HOUSEHOLD EFFECTS ON SEPARATION FROM ACTIVE SERVICE ARE AVAILABLE FOR SETOFF AGAINST DEBTS CAUSED BY ERRONEOUS PAYMENTS, THE MILEAGE ALLOWANCE AUTHORIZED FOR ENLISTED MEN UPON SEPARATION FROM THE SERVICE MAY NOT BE WITHHELD FOR THAT PURPOSE. THE BASIS FOR THE CONCLUSION THAT THE MILEAGE ALLOWANCE DUE ENLISTED MEN ON SEPARATION WAS NOT SO AVAILABLE WAS THE LONG-RECOGNIZED RULE TO THAT EFFECT FOUNDED ON THE PRESUMPTION THAT THE CONGRESS, AS A MATTER OF PUBLIC POLICY, DOES NOT INTEND THAT ENLISTED MEN SHOULD BE DISCHARGED, OFTEN FAR FROM HOME, WITHOUT SUFFICIENT FUNDS TO RETURN HOME. AS NOTED IN COMMITTEE ACTION NO. 110, SOME OF THE EARLIER DECISIONS OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT ON THIS POINT MENTIONED, AS AN ADDITIONAL CONSIDERATION, THAT THE PROVISIONS OF LAW IN EFFECT AT THAT TIME GAVE AN ENLISTED MAN THE OPTION OF RECEIVING TRANSPORTATION IN KIND OR A COMMUTED MILEAGE ALLOWANCE AND THAT, SINCE SETOFF COULD NOT BE MADE FROM TRANSPORTATION IN KIND, IT SHOULD NOT BE MADE FROM THE COMMUTED ALLOWANCE. THAT FACTOR, HOWEVER, APPEARS TO HAVE BEEN OF RELATIVELY MINOR IMPORTANCE, SINCE THE RULE AGAINST WITHHOLDING TRAVEL ALLOWANCE DUE ENLISTED MEN WAS FOLLOWED FOR MANY YEARS DURING WHICH THAT OPTION DID NOT EXIST. THE RULE WAS NEVER EXTENDED TO OFFICERS. THEIR FINANCIAL SITUATION WAS DIFFERENT AND NORMALLY THEY WERE NOT PAID MILEAGE UNTIL AFTER THE TRAVEL WAS PERFORMED. THE FACT THAT THE JOINT TRAVEL REGULATIONS NOW AUTHORIZE PAYMENT OF MILEAGE TO OFFICERS ON DISCHARGE OR RELEASE FROM ACTIVE DUTY WITHOUT REGARD TO THE ACTUAL PERFORMANCE OF TRAVEL PROVIDES NO SUFFICIENT BASIS TO EXEMPT SUCH PAYMENTS FROM APPLICATION TO THEIR DEBTS. NOR DOES THE CIRCUMSTANCE THAT BOTH OFFICERS AND ENLISTED MEN NOW HAVE AN OPTION UNDER THE JOINT TRAVEL REGULATIONS OF ACCEPTING TRANSPORTATION IN KIND FOR THEIR DEPENDENTS AND HOUSEHOLD GOODS TO THEIR HOMES OR BEING REIMBURSED FOR THE COST OF SUCH TRANSPORTATION ON AN ACTUAL EXPENSE OR COMMUTED BASIS FURNISH A SUFFICIENT BASIS FOR CONCLUDING THAT AMOUNTS DUE AS REIMBURSEMENT, WHEN TRANSPORTATION IN KIND IS NOT FURNISHED, ARE EXEMPT FROM APPLICATION TO DEBTS DUE THE GOVERNMENT. THE FACT THAT REIMBURSEMENT IS CLAIMED SHOWS THAT THE MEMBERS HAD SUFFICIENT FUNDS TO OBTAIN THE NECESSARY TRANSPORTATION. HENCE, QUESTION TWO IS ANSWERED IN THE AFFIRMATIVE.

3. MAY DEBTS OF ENLISTED MEN OF THE ARMY AND AIR FORCE, CAUSED BY ERRONEOUS PAYMENTS, CONTINUE TO BE REMITTED UNDER THE ACT OF 22 MAY 1928?

SECTION 1 OF THE DRAFT OF A PROPOSED BILL WHICH LATER WAS ENACTED INTO LAW AS THE ACT OF JULY 15, 1954, INCLUDED A REMISSION PROVISION SIMILAR TO THAT CONTAINED IN THE ACT OF MAY 22, 1928, 10 U.S.C. 875A. THAT PROVISION WAS OMITTED, HOWEVER, FROM THE ACTUAL BILLS, H.R. 7477 AND S. 2728, LATER INTRODUCED IN THE HOUSE OF REPRESENTATIVES AND THE SENATE, PROBABLY BECAUSE OF OUR OBJECTION IN A REPORT DATED NOVEMBER 28, 1952, A-48860, TO THE BUREAU OF THE BUDGET ON THE PROPOSED BILL. IN ATTEMPTING TO RESOLVE THE APPARENT INCONSISTENCIES BETWEEN THE 1928 AND 1954 ACTS REFERRED TO IN THE ANSWER TO QUESTION 4 OF THE DECISION OF OCTOBER 11, 1954, THE FACT OF SUCH OMISSION WAS ONE OF THE MATTERS WHICH INFLUENCED US TO CONCLUDE THAT, PENDING CLARIFICATION OF THE 1954 ACT, IT SHOULD BE INTERPRETED AS BEING UNIFORMLY APPLICABLE TO MEMBERS OF THE NAVY. THIS VIEW EXTENDS TO THE REMISSION OF DEBTS ALSO AND THE REMISSION PROVISIONS OF THE 1928 ACT SHOULD BE REGARDED AS RELATING ONLY TO ADMINISTRATIVELY ASCERTAINED DEBTS OTHER THAN THOSE COVERED BY THE 1954 ACT. QUESTION THREE IS ANSWERED IN THE NEGATIVE.

4. MAY LUMP-SUM LEAVE PAYMENTS WHICH ARE NOT PAID UNDER SECTION 6 OF THE ARMED FORCES LEAVE ACT OF 1946, 60 STAT. 965, AS AMENDED, 37 U.S.C. 35, BE REDUCED TO LIQUIDATE A SERVICE MEMBER'S INDEBTEDNESS ARISING OUT OF AN ERRONEOUS PAYMENT?

IT IS ONLY THE LUMP-SUM LEAVE PAYMENTS MADE UNDER SECTION 6 OF THE 1946 LEAVE ACT, 60 STAT. 965, WHICH ARE EXEMPT FROM CLAIMS OF THE UNITED STATES UNDER SECTION 7 OF THAT ACT, 60 STAT. 967. LUMP-SUM PAYMENTS ACCRUING UNDER SECTION 4 (C) OF THAT ACT, AS AMENDED BY THE ACT OF AUGUST 4, 1947, 61 STAT. 748, ARE NOT EXEMPT AND MAY BE USED TO LIQUIDATE DEBTS UNDER THE 1954 ACT.

5. TO WHAT EXTENT MUST INACTIVE DUTY TRAINING PAY BE WITHHELD TO LIQUIDATE DEBTS ARISING OUT OF ERRONEOUS PAYMENTS THAT WERE MADE (A) WHILE A SERVICE MEMBER IS ON ACTIVE DUTY AND (B) WHILE HE IS NOT ON ACTIVE DUTY?

WHILE THE PROVISIONS OF THE 1954 ACT ARE NOT CLEAR, THERE IS NO DOUBT THAT A PERSON ENTITLED TO RECEIVE INACTIVE-DUTY PAY IS A "MEMBER OF THE ARMY, NAVY, AIR FORCE, MARINE CORPS, OR COAST GUARD, OR A RESERVE COMPONENT THEREOF" WITHIN THE MEANING OF THAT ACT. HENCE, IT WOULD APPEAR THAT THE ACT CONTAINS AUTHORITY FOR AN ADMINISTRATIVE DETERMINATION OF INDEBTEDNESS IN THE CASE OF SUCH A PERSON. THE ITEMS OF PAY (AS LISTED IN THE ACT) TO BE WITHHELD TO SATISFY SUCH AN INDEBTEDNESS, DO NOT SPECIFICALLY INCLUDE INACTIVE-DUTY PAY, BUT THERE ARE INCLUDED OTHER PAY ITEMS PAYABLE ONLY DURING PERIODS OF INACTIVE DUTY (RETAINER PAY AND RETIRED PAY). ALSO, THE LAW PERMITS THE WITHHOLDING OF "OTHER AUTHORIZED PAY.' THOSE PROVISIONS ARE BROAD ENOUGH TO INCLUDE INACTIVE-DUTY PAY AND, THEREFORE, AS TO ERRONEOUS PAYMENTS MADE WHILE A MEMBER IS ON INACTIVE DUTY, HIS INACTIVE DUTY PAY IS AVAILABLE TO SATISFY THE RESULTING INDEBTEDNESS JUST AS ACTIVE-DUTY PAY IS AVAILABLE TO SATISFY AN INDEBTEDNESS ARISING DURING ACTIVE DUTY.

THE FIFTH SENTENCE OF SECTION 1 OF THE ACT PROVIDES THAT IF THE PERIOD OF "ACTIVE DUTY" TERMINATES BEFORE PAYMENT OF THE DEBT HAS BEEN COMPLETED, ADJUSTMENT "SHALL" BE MADE BY "DECREASING SUBSEQUENT PAYMENTS.' INACTIVE- DUTY TRAINING PAY, RECEIVED SUBSEQUENT TO RELEASE FROM ACTIVE DUTY, WOULD SEEM TO BE A "SUBSEQUENT PAYMENT" TO BE DECREASED TO SATISFY THE PAYEE'S INDEBTEDNESS WHICH AROSE DURING ACTIVE DUTY. THE AMOUNT BY WHICH SUCH PAY SHOULD BE REDUCED IS NOT STIPULATED; HENCE, IT WOULD SEEM THAT REGULATIONS ISSUED PURSUANT TO THE ACT SHOULD INCLUDE PROVISION ANNOUNCING THE ADMINISTRATIVE POLICY CONCERNING WITHHOLDING OF INACTIVE-DUTY TRAINING PAY AS WELL AS OTHER ,SUBSEQUENT PAYMENTS.' QUESTION FIVE IS ANSWERED ACCORDINGLY.

6. TO WHAT EXTENT DOES THE TWO-THIRDS LIMITATION ON AMOUNTS THAT MAY BE DEDUCTED FROM A MEMBER'S PAY APPLY TO RETIRED AND RETAINER PAY IN THOSE CASES (A) WHERE THE ERRONEOUS PAYMENT OCCURRED WHILE THE MEMBER WAS ON ACTIVE DUTY, AND (B) WHERE IT OCCURRED AFTER HIS RETIREMENT, OR TRANSFER TO THE FLEET RESERVE OR FLEET MARINE CORPS RESERVE?

FOR THE REASONS GIVEN IN THE REPLY TO QUESTION FIVE, THE 1954 ACT IS VIEWED AS APPLYING TO ERRONEOUS PAYMENTS MADE TO MEMBERS AFTER RETIREMENT OF TRANSFER TO THE FLEET RESERVE OR FLEET MARINE CORPS RESERVE. THE AMOUNT OF RETIRED OR RETAINER PAY TO BE WITHHELD TO SATISFY SUCH A DEBT IS A MATTER TO BE COVERED BY THE REGULATIONS ISSUED PURSUANT TO THE ACT.

7. IS IT MANDATORY THAT ALL PAY OF A MEMBER BE WITHHELD IF SUCH ACTION IS NECESSARY TO SATISFY AN INDEBTEDNESS WITHIN HIS ANTICIPATED PERIOD OF ACTIVE DUTY, OR MAY THE SECRETARIES AND THEIR DESIGNEES EXERCISE THEIR DISCRETION IN DETERMINING A REASONABLE AMOUNT?

THE DECISION OF OCTOBER 11, 1954, CONSIDERED THE QUESTION OF WHETHER THE TOTAL OF ALL BASIC PAY, SPECIAL PAY, AND INCENTIVE PAY COULD BE WITHHELD WHERE TWO-THIRDS OF THE MEMBER'S PAY FOR HIS ANTICIPATED PERIOD OF ACTIVE DUTY IS NOT SUFFICIENT TO PERMIT FULL COLLECTION OF THE DEBT. THAT QUESTION WAS ANSWERED IN THE AFFIRMATIVE. IN VIEW OF THE PLAIN REQUIREMENT THAT " COLLECTION SHALL BE EFFECTED OVER A PERIOD NOT GREATER THAN THE ANTICIPATED PERIOD OF ACTIVE DUTY" AND THE FACT THAT THE TWO- THIRDS LIMITATION ON WITHHOLDING IS MADE CONDITIONAL BY EXPRESSLY STIPULATING "UNLESS THE DEDUCTION OF A GREATER AMOUNT IS NECESSARY TO EFFECT COLLECTION WITHIN THE PERIOD OR ANTICIPATED PERIOD OF ACTIVE DUTY," IT WOULD SEEM THAT THE REMAINING ONE-THIRD OF A MEMBER'S PAY MUST BE CONSIDERED AVAILABLE TO SATISFY HIS INDEBTEDNESS, IF NECESSARY TO EFFECT COLLECTION OF THE DEBT WITHIN THE PERIOD OR ANTICIPATED PERIOD OF ACTIVE DUTY. HOWEVER, A CONCLUSION THAT THE LAW IN THIS RESPECT IS MANDATORY AND THAT IT REQUIRES THAT THE ENTIRE REMAINING ONE-THIRD OF THE MEMBER'S PAY BE WITHHELD IN ALL EVENTS CANNOT BE SUSTAINED WITHOUT PRESUMING THAT THE CONGRESS INTENDED THE LAW WOULD RESULT IN EXTREME HARDSHIP IN CERTAIN INSTANCES. MILITARY PERSONNEL, BY REASON OF ENLISTMENT OR INDUCTION ARE REQUIRED TO SERVE FOR LONG PERIODS AND A MANDATORY WITHHOLDING OF ALL BASIC PAY, INCENTIVE PAY, ETC., FOR ANY SUBSTANTIAL PERIOD MAY RESULT IN INSUFFICIENT FUNDS FOR EVEN THE NECESSITIES FOR HIMSELF AND HIS DEPENDENTS. IN OTHER WORDS, A PERSON INVOLUNTARILY SERVING IN THE MILITARY SERVICE COULD BE REQUIRED TO CONTINUE TO SERVE FOR THE PERIOD REQUIRED BY LAW, BUT AT THE SAME TIME BE DENIED ALL BASIC PAY, INCENTIVE PAY, ETC., IN ORDER THAT AN INDEBTEDNESS TO THE GOVERNMENT MIGHT BE LIQUIDATED. WE DO NOT THINK THAT THE CONGRESS INTENDED MANDATORILY TO IMPOSE THAT CONDITION OF SERVITUDE ON MEMBERS OF THE MILITARY SERVICE. THEREFORE, IT IS CONCLUDED THAT WHILE THE ENTIRE AMOUNT OF BASIC PAY, INCENTIVE PAY, ETC., MAY BE WITHHELD, IF NECESSARY TO LIQUIDATE A MEMBER'S INDEBTEDNESS, IT IS LEFT TO ADMINISTRATIVE DISCRETION TO DECIDE WHETHER AND TO WHAT EXTENT AN AMOUNT IN EXCESS OF TWO-THIRDS OF SUCH PAY SHOULD BE WITHHELD IN A PARTICULAR CASE.

8. TO WHAT EXTENT SHOULD THE "RETIREMENT PAY" OF RETIRED MEMBERS AND THE "RETIRED" AND ,RETIREMENT" PAY OF FORMER MEMBERS BE WITHHELD ON ACCOUNT OF DEBTS CAUSED BY ERRONEOUS PAYMENTS?

AS POINTED OUT IN THE DISCUSSION OF THIS QUESTION IN COMMITTEE ACTION NO. 110, AND AS EXEMPLIFIED BY THE LANGUAGE OF SECTIONS 301 AND 302 OF THE ACT OF JUNE 29, 1948, 62 STAT. 1087, THE TERMS "RETIRED PAY" AND "RETIREMENT PAY" HAVE BEEN USED INTERCHANGEABLY IN DIFFERENT STATUTES. WHILE THE BETTER PRACTICE IS TO USE BOTH (SEE SECTION 511 OF THE CAREER COMPENSATION ACT OF 1949, 63 STAT. 829), SO AS TO REMOVE ANY DOUBT AS TO WHAT IS INTENDED, WHERE, AS HERE, THERE IS NO INDICATION IN THE STATUTE THAT THE TERM "RETIRED PAY" IS USED IN A TECHNICAL SENSE THAT TERM SHOULD BE REGARDED AS INCLUDING "RETIREMENT PAY.' THE 1954 ACT APPARENTLY CONTEMPLATES DEDUCTIONS, ONCE A PROPER DETERMINATION OF THE INDEBTEDNESS IS MADE WHILE THE DEBTOR IS A "MEMBER," FROM ANY RETIRED OR RETIREMENT PAY OTHERWISE AUTHORIZED, REGARDLESS OF WHETHER THE DEBTOR CONTINUES TO BE A EMBER.' IF THE MATTER WERE OTHERWISE DOUBTFUL, SUCH DOUBT WOULD BE SET AT REST BY THE USE OF THE WORDS "OTHER AUTHORIZED PAY," IN REFERRING TO DEDUCTIONS IN CASES OF PERSONS NOT ENTITLED TO BASIC PAY, AND "SUBSEQUENT PAYMENTS OF WHATEVER NATURE," IN REFERRING TO DEBTS TO BE SATISFIED SUBSEQUENT TO RETIREMENT, RESIGNATION, ETC.

SECTION 1 OF THE 1954 ACT REFERS TO DETERMINATIONS THAT "MEMBERS," NOT "FORMER MEMBERS," ARE INDEBTED TO THE UNITED STATES. HENCE, IT APPEARS THAT ERRONEOUS PAYMENTS PREVIOUSLY MADE TO PERSONS WHO WERE NOT MEMBERS ON THE DATE OF THE ACT AND WHO SUBSEQUENTLY DO NOT BECOME MEMBERS ARE NOT COVERED BY THE ACT. THAT IS, THE ACT CONTEMPLATES THAT THE DETERMINATION OF INDEBTEDNESS SHALL BE MADE WHILE THE DEBTOR IS A "MEMBER," EITHER ON THE ACTIVE LIST, OR ON THE RETIRED LIST, OR OF A RESERVE COMPONENT. WHEN SUCH A DETERMINATION HAS BEEN MADE, HOWEVER, THE AUTHORITY TO COLLECT BY DEDUCTION FROM THE SPECIFIED PAYMENTS CONTINUES EVEN THOUGH THE DEBTOR CEASES TO BE A "MEMBER.'

Oct 1, 2020

Looking for more? Browse all our products here