B-156913, JULY 14, 1967, 47 COMP. GEN. 25

B-156913, JULY 14, 1967, 47 COMP. GEN. 25

DECEDENTS' ESTATES - PAY, ETC., DUE MILITARY PERSONNEL - AMOUNTS WITHHELD FROM HOSPITALIZED VETERANS - RETIRED PAY V PENSIONS, ETC., - INSANE AND INCOMPETENT MEMBERS THE RULING IN BERKEY V UNITED STATES, 176 CT. CL. 1, THAT THE AMOUNT OF ACCUMULATED RETIRED PAY WITHHELD PURSUANT TO 38 U.S.C. 3203 (A) (1) FROM A RETIRED OFFICER OF THE UNIFORMED SERVICES ADJUDICATED AN INCOMPETENT WHO DIED INTESTATE WHILE RECEIVING CARE IN A VETERANS HOSPITAL MAY BE PAID TO THE DECEDENT'S SON WILL BE FOLLOWED BY THE COMPTROLLER GENERAL AS THE COURT'S CONSTRUCTION THAT SECTION 3203 (B) (1), BARRING PAYMENT OF AN ACCUMULATED LUMP SUM IN THE EVENT OF AN INCOMPETENT'S DEATH, HAS NO APPLICATION TO PAYMENT OF RETIRED PAY--- NOT CONSIDERED A GRATUITY--- TO MEMBERS OF THE IMMEDIATE FAMILY OF A DECEDENT, ELIMINATES DISCRIMINATION, AND RESULTS IN THE UNIFORM DISPOSITION OF THE ACCUMULATED RETIRED PAY WITHHELD UNDER 38 U.S.C. 3203 (A) (1) FROM BOTH COMPETENT AND INCOMPETENT RETIRED MEMBERS. PAY RETIRED - WITHHOLDING - VETERANS ADMINISTRATION CARE AND TREATMENT - DISPOSITION OF PAY UPON INCOMPETENT'S DEATH UNDER THE RULING IN BERKEY V UNITED STATES, 176 CT. CL. 1, THAT THE RETIRED PAY WITHHELD PURSUANT TO 38 U.S.C. 3203 (A) (1) FROM A RETIRED MEMBER OF THE UNIFORMED SERVICES ADJUDGED INCOMPETENT WHO DIED WHILE RECEIVING CARE IN A VETERANS HOSPITAL IS PAYABLE TO MEMBERS OF THE IMMEDIATE FAMILY OF A DECEDENT AS THE FORFEITURE PROVISIONS OF 3203 (B) (1) ARE INAPPLICABLE TO WITHHELD RETIRED PAY, CONSIDERED EARNED COMPENSATION AND NOT A GRATUITY, RETIRED PAY IS FOR DISTRIBUTION UNDER 10 U.S.C. 2771, AS THERE IS NO BASIS FOR DISTINGUISHING BETWEEN CASES INVOLVING A COMPETENT OR AN INCOMPETENT RETIRED MEMBER. THEREFORE DISTRIBUTION OF THE WITHHELD RETIRED PAY IN BOTH CATEGORIES--- COMPETENT AND INCOMPETENT--- SHOULD BE ON THE SAME BASIS, AND CLAIMS SIMILAR TO THE BERKEY CASE HANDLED AS INDICATED IN 40 COMP. GEN. 666, AND 41 COMP. GEN. 218 IS REVERSED.

TO THE SECRETARY OF DEFENSE, JULY 14, 1967:

FURTHER REFERENCE IS MADE TO LETTER OF APRIL 28, 1967, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING DECISION WHETHER THIS OFFICE WILL FOLLOW THE RULING OF THE COURT OF CLAIMS IN THE CASE OF BERKEY V UNITED STATES, 176 CT. CL. 1, REGARDING PAYMENT OF ACCUMULATED (WITHHELD) RETIRED PAY UPON THE DEATH OF AN INCOMPETENT RETIRED MEMBER OF THE UNIFORMED SERVICES IN A VETERANS ADMINISTRATION HOSPITAL. DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 399 DISCUSSING THIS MATTER WAS RECEIVED AS AN ENCLOSURE.

THE PLAINTIFF, CHARLES M. BERKEY, WAS THE ONLY CHILD OF CAPTAIN CHARLES M. HURT, UNITED STATES ARMY, RETIRED. CAPTAIN HURT WAS PLACED ON THE RETIRED LIST JULY 31, 1930, FOR DISABILITY INCIDENT TO SERVICE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 1251, REVISED STATUTES, 10 U.S.C. 933 (1946 ED.). IN THE MONTH OF OCTOBER 1947 HE WAS ADMITTED TO THE VETERANS ADMINISTRATION HOSPITAL, MURFREESBORO, TENNESSEE, AS AN ADJUDICATED INCOMPETENT. HE REMAINED HOSPITALIZED CONTINUOUSLY UNTIL HIS DEATH INTESTATE ON AUGUST 6, 1962. EFFECTIVE APRIL 1, 1948, ONE HALF OF HIS MONTHLY RETIRED PAY WAS WITHHELD AS REQUIRED BY APPLICABLE PROVISIONS OF LAW NOW CODIFIED IN 38 U.S.C. 3203 (A) (1). THE REDUCTION IN HIS RETIRED PAY CONTINUED THROUGH THE DATE OF HIS DEATH.

PLAINTIFF'S BERKEY'S SUIT WAS FOR THE AMOUNT OF ACCUMULATED AND UNPAID RETIRED PAY WITHHELD FROM HIS INCOMPETENT FATHER UNDER AUTHORITY OF SECTION 3203 (A) (1) WHICH STATUTORY PROVISION GOVERNS THE PAYMENT OF VETERANS' COMPENSATION OR RETIREMENT PAY IN THE CASE OF CERTAIN VETERANS WHO ARE BEING FURNISHED HOSPITAL TREATMENT OR INSTITUTIONAL OR DOMICILIARY CARE BY THE VETERANS ADMINISTRATION. SECTION 3203 (A) (1) PROVIDES THAT UNDER CERTAIN CONDITIONS VETERANS' COMPENSATION PAYMENTS OR RETIREMENT PAY SHALL CONTINUE WITHOUT REDUCTION FOR A 6-MONTH PERIOD FOLLOWING ADMISSION OF THE VETERAN OR RETIRED MEMBER FOR TREATMENT OR CARE AND THAT AFTER 6 MONTHS ONLY ONE-HALF OF THE VETERANS' COMPENSATION OR RETIRED PAY SHALL BE PAID.

SECTION 3203 (A) (1) FURTHER PROVIDES THAT WHEN DISCHARGED FROM SUCH TREATMENT OR CARE UPON CERTIFICATION BY THE OFFICER IN CHARGE OF THE HOSPITAL, INSTITUTION OR HOME, THAT MAXIMUM BENEFITS HAVE BEEN RECEIVED OR THAT RELEASE IS APPROVED, THE VETERAN OR RETIRED MEMBER SHALL BE PAID IN A LUMP SUM THE TOTAL AMOUNT BY WHICH HIS VETERANS' COMPENSATION OR RETIREMENT PAY HAS BEEN REDUCED. IF TREATMENT OR CARE IS TERMINATED BY THE VETERAN OR RETIRED MEMBER AGAINST MEDICAL ADVICE OR AS A RESULT OF DISCIPLINARY ACTION, THE AMOUNT OF VETERANS' COMPENSATION OR RETIRED PAY WHICH HAS BEEN WITHHELD FROM SUCH VETERAN OR RETIRED MEMBER MAY NOT BE PAID TO HIM UNTIL THE EXPIRATION OF 6 MONTHS AFTER SUCH TERMINATION OF TREATMENT OR, IN THE EVENT OF HIS PRIOR DEATH, AS PROVIDED IN SECTION 3203 (A) (2) (A).

SECTION 3203 (A) (2) (A) ESTABLISHES THE FOLLOWING ORDER OF PRECEDENCE FOR PAYMENT OF THE LUMP SUM (ACCUMULATED VETERANS' COMPENSATION OR RETIREMENT PAY) IN THE EVENT THAT A VETERAN OR RETIRED MEMBER, SUBJECT TO THE STATUTORY PROVISIONS ABOVE REFERRED TO, DIES WHILE RECEIVING HOSPITAL TREATMENT, INSTITUTIONAL OR DOMICILIARY CARE FURNISHED BY THE VETERANS ADMINISTRATION OR BEFORE RECEIVING PAYMENT OF SUCH LUMP SUM: (1) SPOUSE, (2) CHILDREN IN EQUAL PARTS, OR (3) DEPENDENT PARENTS IN EQUAL PARTS.

UNDER SECTION 3203 (B) (1) THE COMPENSATION OR RETIREMENT PAY OF A VETERAN OR RETIRED MEMBER WHOSE STATUS LIES WITHIN THE SCOPE OF THE ABOVE- CITED STATUTORY PROVISIONS AND WHO HAS BEEN RATED BY THE VETERANS ADMINISTRATION AS BEING INCOMPETENT BY REASON OF MENTAL ILLNESS IS SUBJECT TO THE SAME RESTRICTIONS AND LIMITATIONS PRESCRIBED IN SECTION 3203 (A) (1). THUS PAYMENT OF THE FULL AMOUNT OF VETERANS' COMPENSATION OR RETIREMENT PAY IS AUTHORIZED IN SUCH A CASE FOR A 6 MONTH PERIOD FOLLOWING ADMISSION TO HOSPITALIZATION OR CARE WITH REDUCTION TO A ONE-HALF BASIS THEREAFTER. AS TO A LUMP-SUM PAYMENT IN SUCH A CASE, SECTION 3203 (B) (1) EXPRESSELY PROVIDES:

* * * HOWEVER, NO PAYMENT OF A LUMP SUM HEREIN AUTHORIZED SHALL BE MADE TO THE VETERAN UNTIL AFTER THE EXPIRATION OF SIX MONTHS FOLLOWING A FINDING OF COMPETENCY AND IN THE EVENT OF THE VETERAN'S DEATH BEFORE PAYMENT OF SUCH LUMP SUM NO PART THEREOF SHALL BE PAYABLE.

IN THE DECISION OF JUNE 10, 1966, THE COURT CONCEDED THAT READ LITERALLY THE PROVISIONS OF SECTION 3203 (B) (1), QUOTED ABOVE,"WOULD BAR PAYMENT OF THE ACCUMULATED LUMP SUM TO THE SURVIVORS OF AN INCOMPETENT VETERAN SUCH AS PLAINTIFF'S (BERKEY-S) FATHER, WHO DIES IN THE HOSPITAL WHILE STILL INCOMPETENT.' BASED ON THE LEGISLATIVE HISTORY AND THE PRESUMED PURPOSE AND POLICY OF THE STATUTORY PROVISIONS IN QUESTION AND DISTINGUISHING ACCUMULATIONS OF GRATUITOUS BENEFITS (SEE FOOTNOTE 15, PAGE 9 OF THE SLIP OPINION) FROM ACCUMULATED RETIRED PAY, THE COURT CONCLUDED THAT IT HAD NOT BEEN THE INTENT OF THE CONGRESS TO PROHIBIT PAYMENT OF WITHHELD RETIRED PAY TO MEMBERS OF THE IMMEDIATE FAMILY IN SUCH A CASE. THUS, THE DECISION OF JUNE 10, 1966, CONSTRUES THE LAW IN A MANNER WHICH, IN THE CIRCUMSTANCES DESCRIBED, ELIMINATES ANY DISCRIMINATION AND RESULTS IN THE UNIFORM DISPOSITION OF ACCUMULATED RETIRED PAY WHICH HAS BEEN WITHHELD UNDER AUTHORITY OF SECTION 3203 (A) (1).

SINCE SUCH A CONSTRUCTION OF THE PROVISIONS OF LAW IN ISSUE IS NOT UNTENABLE, THE FIRST QUESTION, WHICH READS AS FOLLOWS:

WILL THE COMPTROLLER GENERAL FOLLOW THE RULING OF THE COURT OF CLAIMS IN BERKEY V U.S., CT. CL. NO. 171-65, 10 JUNE 1966, AND ALLOW PAYMENT OF ACCUMULATED RETIRED PAY UPON THE DEATH OF AN INCOMPETENT MEMBER? ANSWERED IN THE AFFIRMATIVE.

THE SECOND QUESTION INQUIRES WHETHER, IF THE ANSWER TO QUESTION 1 IS IN THE AFFIRMATIVE:

WILL PAYMENT BE GOVERENED BY 10 U.S.C. 2771, AS DECIDED IN 40 COMP. GEN. 666 WITH RESPECT TO COMPETENT VETERANS, OR WILL THE DISTRIBUTION PROVISIONS OF 38 U.S.C. 3203 (A) (2) (A) APPLY, AS INDICATED IN BERKEY V U.S. ?

AS INDICATED ABOVE, THE COURT IN THE DECISION OF JUNE 10, 1966, EMPHASIZED THE POINT THAT RETIRED PAY WITHHELD UNDER THE PROVISIONS OF SECTION 3203 (A) (1) IS NOT A GRATUITY OR MERE PENSION. SEE PAGE 10 OF THE SLIP OPINION. THE COURT ALSO NOTED THAT MILITARY RETIRED PAY, EXCEPTING WORLD WAR I EMERGENCY OFFICERS' RETIRED PAY "HAS GENERALLY NOT BEEN CONSIDERED A PENSION, GRANT, OR GRATUITY, BUT AS SOMETHING THE SERVICEMAN EARNS AND HAS EARNED.' SEE FOOTNOTE 9, PAGE 6 OF THE SLIP OPINION.

ON PAGE 8 OF THE SLIP OPINION THE COURT REMARKED THAT THE THEME OF THE ENTIRE LEGISLATIVE HISTORY IS THAT ACCUMULATED GRATUITOUS BENEFITS SHALL BE PAID, AFTER DEATH, ONLY TO CLOSE RELATIVES AND NOT TO REMOTE OR COLLATERAL KIN; THAT THE LAW WAS DESIGNED "TO PREVENT THE PAYMENT OF GRATUITOUS BENEFITS FOR INCOMPETENT VETERANS, RECEIVING CARE AT PUBLIC EXPENSE, FROM ACCUMULATING IN EXCESSIVE AMOUNTS AND PASSING, ON DEATH, TO RELATIVES HAVING NO CLAIM AGAINST THE GOVERNMENT ON ACCOUNT OF THE VETERAN'S MILITARY SERVICE (I.E., RELATIVES FARTHER AWAY THAN WIVES, CHILDREN, AND PARENTS).' AFTER EXPRESSLY NOTING THAT "THE STRESS (IN THE CONGRESSIONAL DEBATE) IS ALWAYS ON THE DOUBLE NOTE THAT FEDERAL LARGESS SHOULD NOT PASS TO COLLATERAL KIN" THE COURT ADDED ,ON THE OTHER HAND, THERE WAS NO REFERENCE TO ACCUMULATED RETIREMENT PAY AND NO SUGGESTION AT ALL THAT SUCH EARNED COMPENSATION WOULD BE LOST TO THE WIFE OR CHILDREN IF THE INCOMPETENT DIED IN THE HOSPITAL OR BEFORE RECOVERING HIS SANITY.'

THE DECISION OF JUNE 10, 1966, SEEMS TO DISTINGUISH RETIREMENT PAY WITHHELD UNDER AUTHORITY OF 38 U.S.C. 3203 (A) (1) FROM GRATUITOUS VETERANS' BENEFITS, INCLUDING WORLD WAR I EMERGENCY OFFICERS' RETIREMENT PAY, AND CONCLUDES THAT SUCH RETIREMENT PAY THAT HAS BEEN WITHHELD UNDER THE PROVISIONS OF 38 U.S.C. 3203 (A) (1) IN THE CASE OF AN INCOMPETENT RETIRED MEMBER IS NOT SUBJECT TO THE FORFEITURE PROVISIONS OF 38 U.S.C. 3203 (B) (1). WHILE THE COURT BASES ITS CONCLUSION ON THE THEORY THAT THE STATUTE WAS NOT INTENDED TO "CUT OFF THE IMMEDIATE FAMILY OF AN INSTITUTIONALIZED INCOMPETENT VETERAN FROM THE ACCUMULATED RESIDUE OF HIS RETIREMENT PAY," THE OPINION DOES NOT INDICATE THE SPECIFIC STATUTORY AUTHORITY FOR DETERMINING THE PERSONS ELIGIBLE TO RECEIVE SUCH AMOUNT. THIS OFFICE HAS HELD THAT RETIRED PAY WITHHELD UNDER SECTION 3203 (A) (1) IN THE CASE OF DECEASED RETIRED MEMBERS WHO WERE NOT INCOMPETENT WAS FOR DISTRIBUTION UNDER THE PROVISIONS OF 10 U.S.C. 2771 (40 COMP. GEN. 666), AND SINCE THE COURT HAS NOW HELD THE FORFEITURE PROVISIONS OF SECTION 3203 (B) (1) TO BE INAPPLICABLE IN THE CASE OF INCOMPETENT MEMBERS, WE SEE NO BASIS FOR DISTINGUISHING BETWEEN THE CASE INVOLVING A COMPETENT RETIRED MEMBER AND THE CASE OF AN INCOMPETENT MEMBER.

ACCORDINGLY, IT IS OUR VIEW THAT DISTRIBUTION OF WITHHELD RETIRED PAY IN BOTH CATEGORIES SHOULD BE MADE ON THE SAME BASIS AND, HENCE, OTHER CLAIMS SIMILAR TO THE BERKEY CASE SHOULD BE HANDLED AS INDICATED IN 40 COMP. GEN. 666. DECISION OF OCTOBER 2, 1961, 41 COMP. GEN. 218, IS REVERSED.