B-143407, OCT. 3, 1960

B-143407, OCT. 3, 1960

TO MR. ERVIN A. SCHULTZ:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 16, 1960, CONCERNING YOUR CLAIM FOR RETIRED PAY WITHHELD FROM YOU DURING THE PERIOD MARCH 23, 1958, TO DECEMBER 31, 1959, UNDER THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212 OF THE ECONOMY ACT OF JUNE 31, 1932, AS AMENDED, 5 U.S.C. 59A. SUCH CLAIM WAS CONSIDERED IN A SETTLEMENT OF OUR CLAIMS DIVISION DATED FEBRUARY 2, 1960, AND YOUR LETTER WILL BE REGARDED AS A REQUEST FOR A REVIEW OF THAT SETTLEMENT.

THE DEPARTMENT OF THE AIR FORCE HAS REPORTED THAT YOU WERE COMMISSIONED AS A LIEUTENANT COLONEL, AIR RESERVE, ON JULY 31, 1947, WHICH COMMISSION WAS TERMINATED ON APRIL 1, 1953. NO INFORMATION HAS BEEN FURNISHED, WHICH SHOWS THAT YOU SERVED ON ACTIVE DUTY IN SUCH HIGHER GRADE AS A RESERVE OFFICER, AND IT APPEARS THAT YOU WERE SERVING AS AN AIR FORCE OF THE UNITED STATES OFFICER (MAJOR) WHEN YOU WERE CERTIFIED FOR PAYMENT OF RETIREMENT PAY EFFECTIVE SEPTEMBER 9, 1949, UNDER THE PROVISIONS OF SECTION 5 OF THE ACT OF APRIL 3, 1939, AS AMENDED, 10 U.S.C. 456 (1946 ED.). YOU ELECTED TO HAVE YOUR RETIRED PAY COMPUTED UNDER THE PROVISIONS OF TITLE IV OF THE CAREER COMPENSATION ACT OF 1949 (NOW CHAPTER 61, 10 U.S. CODE), EFFECTIVE OCTOBER 1, 1949. UNDER THE SETTLEMENT OF FEBRUARY 2, 1960, YOU WERE ALLOWED $425.81, STATED TO BE THE AMOUNT OF RETIRED PAY ADMINISTRATIVELY WITHHELD FROM YOU DURING THE PERIOD MARCH 23, 1958, THROUGH DECEMBER 31, 1959, UNDER SECTION 212 OF THE ECONOMY ACT. YOU CONTEND THAT THE AMOUNT SO ALLOWED WAS INCORRECTLY COMPUTED AND YOU REQUEST VERIFICATION OF THE COMPUTATION.

THE EXEMPTION FROM THE DUAL COMPENSATION RESTRICTIONS OF THE ECONOMY ACT UNDER SECTION 29 (C) OF THE ACT OF AUGUST 10, 1956, 5 U.S.C. 30R (C) (DERIVED FROM SECTION 1 (B) OF THE ACT OF JULY 1, 1947, 61 STAT. 239) WHICH IS IN FAVOR OF "ANY RESERVE" AND IS APPLICABLE TO "PAY AND ALLOWANCES AS A RESERVE," REQUIRES MORE THAN A SHOWING OF A FORMER INACTIVE DUTY STATUS IN A RESERVE COMPONENT OF THE ARMED FORCES. IN OUR DECISION OF OCTOBER 9, 1959, 39 COMP. GEN. 280, IT WAS HELD THAT:

"* * * THE PAY AND ALLOWANCES MENTIONED IN THE ACT OF JULY 1, 1947, AS AMENDED, ARE THOSE WHICH ARE PAYABLE TO A MEMBER OF A RESERVE COMPONENT IN HIS CAPACITY AS A RESERVIST AND THAT THEY MUST BEAR SOME RELATIONSHIP TO ACTIVE DUTY PERFORMED IN SUCH CAPACITY. MERE MEMBERSHIP IN THE OFFICERS RESERVE CORPS OR IN ANY OTHER RESERVE COMPONENT OF THE ARMED FORCES IS NOT IN ITSELF A SUFFICIENT BASIS FOR EXEMPTION UNDER THE ACT OF JULY 1, 1947, AS AMENDED, OR UNDER THE STATUTORY PROVISIONS CURRENTLY IN EFFECT, WHICH ARE CONTAINED IN 5 U.S.C. 30R (C) (1958 ED.). SEE B-134102, DECEMBER 10, 1957, AND 38 COMP. GEN. 839. IN THE DECISION RENDERED ON JANUARY 14, 1959, BY THE COURT OF CLAIMS IN THE CASE OF BOWMAN ET AL. V. UNITED STATES, C.CL.S NO. 108-58, IN FAVOR OF NATHAN REED WARTHEN, PLAINTIFF NO. 5, THE COURT STATED (REFERRING TO ITS EARLIER DECISION IN SARLES V. UNITED STATES, C.CLS. NO. 353-56 DECIDED MARCH 5, 1958), THAT THE 1947 ACT,PROPERLY INTERPRETED, COVERS ANY PERSON WHO HAS BECOME ENTITLED TO RETIRED PAY "BY REASON OF SERVICE IN A RESERVE COMPONENT.'"

AT THE TIME YOU WERE CERTIFIED FOR RETIREMENT PAY IN 1949, YOU WERE SERVING ON ACTIVE DUTY AS AN OFFICER IN THE AIR FORCE OF THE UNITED STATES WITHOUT COMPONENT, AND THE RECORDS SHOW THAT YOU HAD SERVED IN THAT CAPACITY OR AS AN OFFICER IN THE ARMY OF THE UNITED STATES WITHOUT COMPONENT FOR A PERIOD OF OVER SEVEN YEARS PRIOR TO THAT TIME. THERE IS NO EVIDENCE THAT YOU EVER SERVED ON ACTIVE DUTY IN THE AIR FORCE RESERVE AFTER YOU ACCEPTED A COMMISSION AS A LIEUTENANT COLONEL IN THAT COMPONENT ON JULY 31, 1947. HENCE, IT APPEARS THAT THE RETIRED PAY TO WHICH YOU HAVE BEEN ENTITLED SINCE 1949 IS NOT "PAY AND ALLOWANCES AS A RESERVE," WITHIN THE DUAL COMPENSATION EXEMPTION PROVISIONS OF SECTION 29 (C) OF THE 1956 ACT. FURTHERMORE, YOU WERE NOT A MEMBER OF THE AIR FORCE RESERVE DURING THE PERIOD OF YOUR CIVILIAN EMPLOYMENT BY THE GOVERNMENT, SUCH MEMBERSHIP HAVING TERMINATED IN 1953. WHILE THE COURT IN THE ABOVE CITED SARLES AND BOWMAN CASES TOOK THE VIEW THAT FORMER MEMBERSHIP IN A RESERVE COMPONENT IS SUFFICIENT TO EXEMPT A PERSON FROM THE RESTRICTIONS OF THE ECONOMY ACT IN CERTAIN CASES, IT WAS RECOGNIZED THAT THE EXEMPTION COVERS ONLY PERSONS WHO HAVE BECOME ENTITLED TO RETIRED PAY "BY REASON OF SERVICE IN A RESERVE MPONENT.' YOU DID NOT SERVE ON ACTIVE DUTY IN THE AIR FORCE RESERVE AND YOU BECAME ENTITLED TO RETIRED PAY WHILE SERVING AS A MEMBER OF THE AIR FORCE OF THE UNITED STATES WITHOUT COMPONENT.

THE QUESTION WHETHER A FORMER OR CURRENT INACTIVE DUTY STATUS IN A RESERVE COMPONENT ALONE IS SUFFICIENT TO ENTITLE THE PERSON CONCERNED TO EXEMPTION FROM THE RESTRICTIONS OF THE ECONOMY ACT, IS AMONG THE MATTERS INVOLVED IN AT LEAST TWO CASES NOW PENDING BEFORE THE UNITED STATES COURT OF CLAIMS. SEE WATMAN V. UNITED STATES, CT.CL. NO. 189 59, AND COX V. UNITED STATES, CT.CL.NO. 228-60. IN THE ABSENCE OF AN AUTHORITATIVE COURT DECISION REACHING A DIFFERENT CONCLUSION, PAYMENTS OF RETIRED PAY MUST BE MADE ON THE BASIS OF THE CONCLUSION REACHED IN OUR DECISION OF OCTOBER 9, 1959.

ACCORDINGLY, IT IS CONCLUDED THAT THE SETTLEMENT DATED FEBRUARY 2, 1960, WAS ERRONEOUS AND THE CHECK ISSUED IN PAYMENT THEREOF SHOULD BE RETURNED TO THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE FOR APPROPRIATE DISPOSITION.