B-121540, JANUARY 24, 1964, 43 COMP. GEN. 524

B-121540, JANUARY 24, 1964, 43 COMP. GEN. 524

PAY - WITHHOLDING - DEBT LIQUIDATION - RETIRED PAY WHEN THE TOTAL OR NEARLY TOTAL STOPPAGE OF THE FINAL PAY OF A MEMBER OF THE UNIFORMED SERVICES TO EFFECT COLLECTION OF ERRONEOUS PAYMENTS UNDER 5 U.S.C. 46D WOULD CREATE A HARDSHIP FOR THE MEMBER AND HIS DEPENDENTS INCIDENT TO HIS RETIREMENT FROM ACTIVE SERVICE, THE COLLECTION MAY BE MADE FROM RETIRED PAY WHEN THERE IS A REASONABLE PROSPECT OF COLLECTING THE DEBT IN FULL FROM ACTIVE DUTY PAY AND RETIRED PAY, THE WITHHOLDING OF LESS THAN THE MEMBER'S TOTAL ACTIVE DUTY PAY TO PREVENT HARDSHIP BEING IN ACCORD WITH THE LEGISLATIVE INTENT OF 5 U.S.C. 46D, AUTHORIZING COLLECTION OF DEBTS FROM RETIRED PAY.

TO THE SECRETARY OF DEFENSE, JANUARY 24, 1964:

BY LETTER DATED DECEMBER 27, 1963, THE ASSISTANT SECRETARY OF DEFENSE, COMPTROLLER, TRANSMITTED COMMITTEE ACTION NO. 333 OF THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE WHEREIN THE FOLLOWING QUESTION IS PRESENTED:

MAY THE SERVICES AMEND CURRENT PROCEDURES FOR COLLECTION OF ERRONEOUS PAYMENTS UNDER 5 U.S.C. 46D TO PROVIDE FOR COLLECTION FROM RETIRED PAY IN LIEU OF TOTAL OR NEARLY TOTAL STOPPAGE OF FINAL PAY WHEN SUCH STOPPAGE WOULD CREATE HARDSHIP FOR THE MEMBER AND HIS DEPENDENTS?

THE QUESTION IS PROMPTED BY THE FACT THAT INSTANCES ARISE WHERE ERRONEOUS PAYMENTS IN SIZABLE AMOUNTS ARE DISCOVERED SHORTLY BEFORE THE RETIREMENT OF A MEMBER. TO LIQUIDATE SUCH AN INDEBTEDNESS PRIOR TO RETIREMENT MIGHT RESULT IN TOTAL OR NEARLY TOTAL STOPPAGE OF FINAL PAY. THIS MAY RESULT IN EXTREME HARDSHIP TO SUCH MEMBERS AND THEIR DEPENDENTS DURING A TIME WHEN ABNORMAL EXPENSES ARE ENCOUNTERED AS A CONSEQUENCE OF COMPLETING A MILITARY CAREER AND ESTABLISHING A HOME FOR RETIREMENT.

IN DECISION OF APRIL 8, 1955, B-121540, 34 COMP. GEN. 504, 509, ANSWER TO QUESTION 7, IT WAS HELD THAT WHILE ALL PAY OF A MEMBER MAY BE WITHHELD IF SUCH ACTION IS NECESSARY TO SATISFY AN INDEBTEDNESS WITHIN HIS ANTICIPATED PERIOD OF ACTIVE DUTY, THAT ACTION IS NOT MANDATORY AND DECISION IS LEFT TO THE ADMINISTRATIVE DISCRETION WHETHER AND TO WHAT EXTENT AN AMOUNT IN EXCESS OF TWO-THIRDS OF SUCH ACTIVE DUTY PAY SHOULD BE WITHHELD IN A PARTICULAR CASE. IT WAS ALSO HELD, ANSWER TO QUESTION 8, THAT ONCE A PROPER DETERMINATION OF INDEBTEDNESS IS MADE WHILE THE DEBTOR IS A MEMBER, THE DEBT MAY BE SATISFIED BY DEDUCTIONS MADE FROM ANY RETIRED PAY, RETIREMENT PAY, OR OTHER AUTHORIZED PAY SUBSEQUENT TO RETIREMENT OR OTHER SEPARATION FROM ACTIVE SERVICE.

WHERE THERE IS A REASONABLE PROSPECT OF COLLECTING THE DEBT IN FULL FROM ACTIVE DUTY PAY AND RETIRED PAY, IT IS OUR OPINION THAT WITHHOLDING LESS THAN THE MEMBER'S TOTAL ACTIVE DUTY PAY IN ORDER TO PREVENT HARDSHIP IS IN ACCORD WITH THE LEGISLATIVE INTENT OF THE PROVISION AUTHORIZING COLLECTION OF DEBTS FROM RETIRED PAY. ACCORDINGLY, WE ARE NOT REQUIRED TO OBJECT TO COLLECTION OF ERRONEOUS PAYMENTS FROM RETIRED PAY WHERE TOTAL OR NEARLY TOTAL STOPPAGE OF FINAL PAY WOULD CREATE A HARDSHIP FOR THE MEMBER AND HIS DEPENDENTS INCIDENT TO HIS RETIREMENT FROM ACTIVE SERVICE.