B-151926, AUGUST 4, 1966, 46 COMP. GEN. 107.

B-151926, AUGUST 4, 1966, 46 COMP. GEN. 107.

PAY - READJUSTMENT PAYMENT TO RESERVISTS ON INVOLUNTARY RELEASE - RECOUPMENT - DISABILITY RETIREMENT. A MEMBER OF THE UNIFORMED SERVICES WHO WHILE SERVING AS A TEMPORARY OFFICER HELD A RESERVE OFFICER STATUS AND UPON RELEASE FROM ACTIVE DUTY RECEIVED A LUMP-SUM READJUSTMENT PAYMENT, AND WHO FOLLOWING A PERIOD OF ENLISTED SERVICE IS RETIRED FOR DISABILITY UNDER 10 U.S.C. 1201, ELECTING DISABILITY RETIRED PAY COMPUTED ON YEARS OF SERVICE PURSUANT TO 10 U.S.C. 8911 RATHER THAN ON HIS DEGREE OF DISABILITY IS SUBJECT TO 50 U.S.C. 1016/C) PROVIDING FOR THE DEDUCTION OF 75 PERCENT OF A READJUSTMENT PAYMENT WHEN REGULAR AS WELL AS RESERVE MEMBERS QUALIFY FOR RETIREMENT UNDER TITLES 10 AND 14 OF THE UNITED STATES CODE. NOTWITHSTANDING 50 U.S.C. 1016/C) FAILS TO INCLUDE MEMBERS RETIRED FOR DISABILITY, THE OFFICER QUALIFYING FOR RETIRED PAY WITHIN THE MEANING OF SECTION 1016/C) IS NOT ENTITLED TO BE PAID RETIRED PAY PRIOR TO RECOUPMENT OF 75 PERCENT OF THE READJUSTMENT PAYMENT HE RECEIVED.

TO LIEUTENANT COLONEL J. J. VANYA, DEPARTMENT OF THE AIR FORCE AUGUST 4, 1966:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 5, 1966, REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY OF MAKING PAYMENT ON A VOUCHER IN FAVOR OF MAJOR FREDERICK E. BAILEY, USAF, RETIRED, FOR $801.32, REPRESENTING REFUND OF RETIRED PAY WITHHELD FROM HIM DURING THE PERIOD JANUARY 15 THROUGH FEBRUARY 28, 1966, TO PARTIALLY OFFSET 75 PERCENT OF THE READJUSTMENT PAY WHICH HE RECEIVED PRIOR TO RECEIPT OF RETIRED PAY. YOUR LETTER WAS FORWARDED HERE BY LETTER OF MAY 4, 1966, FROM THE DIRECTORATE OF ACCOUNTING AND FINANCE AND HAS BEEN ASSIGNED AIR FORCE REQUEST NO. DO-AF-905 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

YOU STATE THAT MAJOR BAILEY RETIRED FOR DISABILITY "ON JANUARY 14, 1966", UNDER THE PROVISIONS OF SECTION 1201 OF TITLE 10, U.S.C. YOU FURTHER STATE THAT THE OFFICER RECEIVED A LUMP-SUM READJUSTMENT PAYMENT OF $15,000 ON NOVEMBER 22, 1963, OF WHICH 75 PERCENT OR $11,250 WILL BE RECOUPED UNDER THE PROVISIONS OF 50 U.S.C. 1016/C) PRIOR TO RELEASE OF RETIRED PAY IF SUCH ACTION IS HELD TO BE PROPER. SINCE MAJOR BAILEY RETIRED UNDER 10 U.S.C. 1201 WITH 30 PERCENT DISABILITY AND WITH RETIRED PAY ENTITLEMENT COMPUTED ON OVER 20 YEARS' ACTIVE SERVICE RATHER THAN HIS DEGREE OF DISABILITY, YOU EXPRESS DOUBT AS TO WHETHER THE PRINCIPLE SET FORTH IN B- 151926, OCTOBER 22, 1963 (43 COMP. GEN. 402), CAN BE PROPERLY APPLIED IN THIS CASE.

IT APPEARS FROM THE ENCLOSURES SUBMITTED WITH YOUR LETTER THAT WHILE MAJOR BAILEY WAS SERVING ON EXTENDED ACTIVE DUTY FROM JULY 25, 1940,TO JANUARY 4, 1946, AND FROM JULY 5, 1951, TO NOVEMBER 22, 1963, AS A TEMPORARY OFFICER, HE ALSO HAD A STATUS AS A RESERVE OFFICER. HE WAS RELEASED FROM EXTENDED ACTIVE DUTY AS A MAJOR, USAF, ON NOVEMBER 22, 1963, AND ON DECEMBER 4, 1963, HE ENLISTED IN THE UNITED STATES AIR FORCE AND SERVED IN THAT CAPACITY UNTIL HIS RELEASE FROM ACTIVE DUTY ON JANUARY 14, 1966, AND HIS RETIREMENT ON JANUARY 15, 1966. THE MEMBER'S RETIREMENT ORDERS SHOW THAT HE HAD 20 YEARS AND 2 DAYS' ACTIVE SERVICE FOR RETIREMENT PURPOSES AND 25 YEARS 7 MONTHS AND 18 DAYS' SERVICE FOR BASIC PAY PURPOSES. THE ORDERS ALSO SHOW THAT HE HAD A 30 PERCENT PHYSICAL DISABILITY AND THAT HE WAS RETIRED IN THE GRADE OF MAJOR. UNDER THE HEADING OF REMARKS ON THOSE ORDERS IT IS STATED THAT: "MEMBER IS QUALIFIED FOR RETIREMENT AND ENTITLED TO RETIRED PAY UP 10 U.S.C. 8911, 8991. (37 COMP GEN 794);, THE RECORD ALSO SHOWS THAT, IN EXECUTING FORM DD 418, THE MEMBER ELECTED TO RECEIVE DISABILITY RETIRED PAY COMPUTED ON THE NUMBER OF YEARS OF SERVICE BASED ON 26 YEARS.

SECTION 265/C) OF THE ARMED FORCES RESERVE ACT OF 1952, AS ADDED BY THE ACT OF JULY 9, 1956, CH. 534, 70 STAT. 517, AND AMENDED BY THE ACT OF JUNE 28, 1962, PUBLIC LAW 87-509, 76 STAT. 121, 50 U.S.C. 1016/C), PROVIDES AS FOLLOWS:

A MEMBER OF A RESERVE COMPONENT WHO HAS RECEIVED A READJUSTMENT PAYMENT UNDER THIS SECTION AFTER THE DATE OF ENACTMENT OF THIS AMENDED SUBSECTION AND WHO QUALIFIES FOR RETIRED PAY UNDER ANY PROVISION OF TITLE 10 OR TITLE 14 THAT AUTHORIZES HIS RETIREMENT UPON COMPLETION OF 20 YEARS OF ACTIVE SERVICE, MAY RECEIVE THAT PAY SUBJECT TO THE IMMEDIATE DEDUCTION FROM THAT PAY OF AN AMOUNT EQUAL TO 75 PERCENT OF THE AMOUNT OF THE READJUSTMENT PAYMENT, WITHOUT INTEREST.

IN OUR DECISION OF OCTOBER 22, 1963, CITED BY YOU, WE CONSIDERED THE ABOVE RECOUPMENT PROVISION AND SAID, IN ANSWER TO QUESTION 1, THAT THE LEGISLATIVE HISTORY SHOWS THAT DURING THE COURSE OF THE HEARINGS FREQUENT MENTION WAS MADE OF RESERVE OFFICERS ENLISTING AFTER THEIR RELEASE FROM ACTIVE DUTY AND LATER QUALIFYING FOR "TITLE II" RETIRED PAY---WHICH IS APPLICABLE TO BOTH REGULARS AND RESERVES---ON THE BASIS OF 20 OR MORE YEARS OF ACTIVE SERVICE. WE HELD THAT IN VIEW OF THE BROAD WORDING IN SECTION 1/4) OF THE ACT OF JUNE 28, 1962, 50 U.S.C. 1016/C), THE PRESCRIBED DEDUCTION FOR READJUSTMENT PAY SHOULD BE MADE FROM THE RETIRED PAY OF REGULARS AS WELL AS RESERVE MEMBERS. IN ANSWER TO QUESTION 2 IN THAT DECISION (OCTOBER 22, 1963), WE SAID, WITH RESPECT TO ENLISTED MEMBERS TRANSFERRED TO THE FLEET RESERVE OR THE FLEET MARINE CORPS RESERVE WITH 20 OR LESS THAN 20 YEARS OF ACTIVE SERVICE, THAT IT SEEMED CLEAR THAT CONGRESS INTENDED THAT THE READJUSTMENT PAYMENT SHOULD BE DEDUCTED IMMEDIATELY WHEN A MEMBER BECOMES ENTITLED TO MONTHLY PAYMENTS OF RETIREMENT BENEFITS "BASED ON THE ACTIVE SERVICE FOR WHICH THE MEMBER RECEIVES THAT PAYMENT;,

THE RETIRED PAY OF A MEMBER RETIRED FOR DISABILITY UNDER SECTION 1201 OF TITLE 10 IS FOR COMPUTATION UNDER FORMULA 1 OF SECTION 1401 OF TITLE 10, WHICH AUTHORIZES THE USE OF A PERCENTAGE FACTOR OF 2 1/2 PERCENT OF YEARS OF SERVICE CREDITED UNDER SECTION 1208 OR THE PERCENTAGE OF DISABILITY ON DATE WHEN RETIRED, AS THE MEMBER ELECTS. IN OUR DECISION OF MAY 27, 1958, B-135436, 37 COMP. GEN. 794, CITED BY YOU, AND 38 COMP. GEN. 715, WE HELD THAT SINCE THE MEMBERS THERE INVOLVED HAD BEEN RETIRED FOR DISABILITY BUT WERE ALSO ENTITLED TO VOLUNTARY RETIREMENT WITH 20 YEARS OF SERVICE UNDER 10 U.S.C. 3911 AND 8911, RESPECTIVELY, THEY WERE ENTITLED TO HAVE THEIR RETIRED PAY COMPUTED UNDER WHICHEVER OF THE TWO METHODS GAVE THEM THE GREATER BENEFITS IN ACCORDANCE WITH SECTION 1401 OF TITLE 10, U.S. CODE, WHICH PROVIDES IN PERTINENT PART THAT:

* * * IF A PERSON WOULD OTHERWISE BE ENTITLED TO RETIRED PAY COMPUTED UNDER MORE THAN ONE PAY FORMULA OF THIS TABLE OR OF ANY OTHER PROVISION OF LAW, HE IS ENTITLED TO BE PAID UNDER THE APPLICABLE FORMULA THAT IS MOST FAVORABLE TO HIM.

WHILE MAJOR BAILEY WAS RETIRED FOR DISABILITY UNDER 10 U.S.C. 1201 WITH 30 PERCENT DISABILITY, HE WAS ALSO ENTITLED TO VOLUNTARY RETIREMENT WITH 20 YEARS OF SERVICE UNDER 10 U.S.C. 8911. A MEMBER RETIRED UNDER SECTION 8911 IS ENTITLED TO HAVE HIS RETIRED PAY COMPUTED UNDER FORMULA B OF SECTION 8991 ON THE BASIS OF THE MONTHLY BASIC PAY OF THE MEMBER'S RETIRED GRADE MULTIPLIED BY "2 1/2 PERCENT OF YEARS OF SERVICE CREDITED TO HIM UNDER SECTION 1405 OF THIS TITLE;, UNDER 10 U.S.C. 1405, ALL OF MAJOR BAILEY'S SERVICE, INCLUDING ACTIVE AND INACTIVE SERVICE IS CREDITABLE.

THE LEGISLATIVE HISTORY OF THE RECOUPMENT PROVISIONS OF THE 1962 ACT REQUIRING DEDUCTION OF READJUSTMENT PAY FROM RETIRED PAY APPEARS TO CONTAIN NO DISCUSSION OF THE SITUATION OF A MEMBER WHO IS GRANTED RETIRED PAY FOR DISABILITY SOMETIME AFTER RECEIPT OF READJUSTMENT PAY. WE ARE LEFT TO SPECULATE AS TO THE REASONS WHY THE THE CONGRESS MIGHT WISH TO EXEMPT MEMBERS RETIRED FOR DISABILITY FROM THE RECOUPMENT PROVISIONS OF SECTION 265/C), AS AMENDED BY THE 1962 ACT. IN THIS CONNECTION, IT IS NOTED THAT A SIMILAR RECOUPMENT PROVISION WAS INCLUDED IN SUBSECTION (B) (6), AS AMENDED BY THE 1962 ACT, 50 U.S.C. 1016 (B) (6), RELATING TO PERSONS WHO ARE GRANTED DISABILITY COMPENSATION UNDER LAWS ADMINISTERED BY THE VETERANS ADMINISTRATION. IT MAY BE THAT THE FAILURE TO INCLUDE MEMBERS RETIRED FOR DISABILITY WITHIN THE EXPRESS COVERAGE OF SUBSECTION (C) WAS THE RESULT OF THE FAILURE OF THE SPONSORS OF THE THEN PROPOSED LEGISLATION TO INVITE THE ATTENTION OF THE CONGRESS TO THE POSSIBILITY THAT SOME MEMBERS, SUCH AS MAJOR BAILEY, WHO ARE IN RECEIPT OF READJUSTMENT PAY, MIGHT LATER BE RETIRED FOR DISABILITY.

AS FAR AS CAN BE DETERMINED FROM THE LEGISLATIVE HISTORY OF THE 1962 ACT, THE REASONS FOR SUBJECTING A RETIRED MEMBER OF A RESERVE COMPONENT TO THE RECOUPMENT PROVISIONS OF SUBSECTION (C) APPEAR TO BE EXACTLY THE SAME WHETHER HE ACTUALLY IS RETIRED UNDER LAWS AUTHORIZING RETIREMENT UPON COMPLETION OF 20 YEARS OF ACTIVE DUTY, OR HIS RETIRED PAY IS MERELY COMPUTED UNDER SUCH LAWS.

SECTION 8911, 10 U.S. CODE, AUTHORIZED MAJOR BAILEY'S RETIREMENT UPON COMPLETION OF 20 YEARS OF ACTIVE SERVICE AND IN THE CIRCUMSTANCES DISCLOSED THE CONCLUSION THAT HE "QUALIFIES/D) FOR RETIRED PAY" WITHIN THE MEANING OF THAT PHRASE AS USED IN SUBSECTION (C), APPEARS WARRANTED. ACCORDINGLY, HE IS NOT ENTITLED TO BE PAID RETIRED PAY PRIOR TO RECOUPMENT OF 75 PERCENT OF THE READJUSTMENT PAY PAID TO HIM AND PAYMENT ON THE VOUCHER, WHICH IS RETAINED HERE, IS NOT AUTHORIZED.