B-123209, AUGUST 2, 1963, 43 COMP. GEN. 112

VETERANS - INSURANCE - PAY ALLOTMENTS - MEMBER'S AUTHORIZATION A PROPOSAL TO AUTOMATICALLY INCREASE ALLOTMENTS OF PAY OF MEMBERS OF THE UNIFORMED SERVICES TO PAY VETERANS ADMINISTRATION FOR INSURANCE PREMIUMS WHEN TERM POLICIES ARE RENEWED PURSUANT TO 38 U.S.C. 705 WOULD IN EFFECT RESULT IN THE DIVERSION OF A PORTION OF THE MEMBER'S TAKE HOME PAY WITHOUT HIS EXPRESS AUTHORIZATION OR CONSENT AND, IN THE ABSENCE OF A STATUTE AUTHORIZING AUTOMATIC ALLOTMENTS, THE PROPOSAL MAY NOT BE APPROVED.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, AUGUST 2, 1963:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 3, 1963, WITH ENCLOSURE, REQUESTING ADVICE AS TO WHETHER WE "WOULD OBJECT TO A PROPOSED ARRANGEMENT WHEREBY SERVICE DEPARTMENTS WOULD AUTOMATICALLY INCREASE SERVICEMENS' ALLOTMENTS OF PAY TO THE VETERANS ADMINISTRATION FOR INSURANCE PREMIUMS WITHOUT THEIR EXPRESSED AUTHORIZATION WHEN TERM POLICIES ARE RENEWED FOR AN ADDITIONAL 5-YEAR PERIOD.'

YOU STATE THAT SUCH AN ARRANGEMENT WOULD FACILITATE THE IMPLEMENTATION OF SECTION 705 OF TITLE 38, U.S.C. WHICH PROVIDES IN PERTINENT PART AS FOLLOWS:

AT THE EXPIRATION OF ANY TERM PERIOD ANY FIVE-YEAR LEVEL PREMIUM TERM POLICY WHICH HAS NOT BEEN EXCHANGED OR CONVERTED TO A PERMANENT PLAN OF INSURANCE AND WHICH IS NOT LAPSED SHALL BE RENEWED AS LEVEL PREMIUM TERM INSURANCE WITHOUT APPLICATION FOR A SUCCESSIVE FIVE-YEAR PERIOD AT THE PREMIUM RATE FOR THE ATTAINED AGE WITHOUT MEDICAL EXAMINATION.

YOU POINT OUT THAT THE EXPIRATION OF A 5-YEAR LEVEL PREMIUM TERM POLICY PERIOD THE SERVICE DEPARTMENTS CONTINUE THE EXISTING ALLOTMENT UNTIL THE SERVICEMAN AUTHORIZES A SUPERSEDING INCREASED ALLOTMENT. IT IS STATED THAT THIS HAS IMPOSED AN ADMINISTRATIVE BURDEN UPON THE VETERANS ADMINISTRATION AND, YOU BELIEVE, UPON THE SERVICE DEPARTMENTS. YOU SAY THAT THIS NECESSITATES CORRESPONDENCE WITH THE SERVICEMAN REQUESTING THAT HE ARRANGE WITH HIS SERVICE DEPARTMENT FOR AN INCREASED ALLOTMENT, AND THAT THE FREQUENT MOVEMENT OF MILITARY PERSONNEL OFTEN CAUSES DELAY IN RECEIPT OF THESE REQUESTS AND APPROPRIATE ACTION BY THEM. ALSO, IT IS STATED THAT PROCESSING OF IRREGULAR PREMIUM REMITTANCES INCREASES PROCESSING COSTS AND RESULTS IN ADDITIONAL RECORD KEEPING BY THE VETERANS ADMINISTRATION. IT IS YOUR VIEW THAT PRESENT PROCESSING BY THE SERVICE DEPARTMENTS SHOULD RESULT IN ADDITIONAL ADMINISTRATIVE COSTS IN THEIR OPERATIONS. THE PRESENT ARRANGEMENT, IT IS STATED, INCREASES THE POSSIBILITY OF LAPSE OF SERVICEMEN'S INSURANCE POLICIES.

YOU STATE THAT THE DEPARTMENT OF DEFENSE BELIEVES THAT THE PROPOSED ARRANGEMENT MAY BE LEGALLY OBJECTIONABLE IN VIEW OF OUR DECISION OF JANUARY 25, 1956, B-123209. IF WE ARE REQUIRED TO OBJECT TO THE PROPOSAL, YOU ASK WHETHER AN ALTERNATIVE PROPOSAL WOULD BE ACCEPTABLE WHICH WOULD REVISE DEPARTMENT OF DEFENSE FORM DD 234 (ALLOTMENT AUTHORIZATION TO START OR STOP ALLOTMENTS) TO AUTHORIZE ANY INCREASED AMOUNT OF ALLOTMENT REQUIRED TO COVER THE INCREASED VETERANS ADMINISTRATION PREMIUM AT THE EXPIRATION OF ANY PERIOD OF A 5-YEAR LEVEL PREMIUM TERM POLICY.

SECTION 708 OF TITLE 38, U.S. CODE, PROVIDES IN PART THAT THE ADMINISTRATOR OF VETERANS' AFFAIRS SHALL BY REGULATIONS PRESCRIBE THE TIME AND METHOD OF PAYMENT OF THE PREMIUMS ON INSURANCE, WHICH AT THE ELECTION OF THE INSURED MAY BE DEDUCTED FROM HIS ACTIVE SERVICE PAYOR BE OTHERWISE MADE. SEE ALSO 38 U.S.C. 743. REGULATIONS GOVERNING THE PAYMENT OF PREMIUMS ARE CONTAINED IN 38 CFR 8.3-8.20. 38 CFR 8.6 PROVIDES THAT PREMIUMS ON NATIONAL SERVICE LIFE INSURANCE MAY BE PAID BY PERSONS IN THE ACTIVE MILITARY, NAVAL OR COAST GUARD SERVICES OR BY PERSONS ENTITLED TO RETIREMENT PAY FROM SUCH SERVICES (A) BY DIRECT REMITTANCE TO THE VETERANS ADMINISTRATION, OR (B) BY ALLOTMENT OF SERVICE PAY OR RETIREMENT PAY.

IN OUR DECISION OF JANUARY 25, 1956, B-123209, 35 COMP. GEN. 418, MENTIONED ABOVE, THERE WAS CONSIDERED THE QUESTION WHETHER THE DEPARTMENT OF DEFENSE IS LEGALLY JUSTIFIED IN CHECKING THE PAY ACCOUNTS OF MEMBERS OF THE ARMED FORCES FOR INSURANCE PREMIUMS WHICH WERE NOT DEDUCTED FROM THEIR SERVICE PAY WHERE THE MEMBER INDICATED IN THE APPLICATION FOR NATIONAL SERVICE LIFE INSURANCE THAT PREMIUMS WOULD BE PAID BY AN ALLOTMENT FROM HIS SERVICE PAY BUT FAILED TO MAKE THE ALLOTMENT. IN THAT DECISION WE REFERRED TO THE CASE OF UNITED STATES V. JONES, 101 F.SUPP. 128, HOLDING THAT WHERE A SERVICE MEMBER DID NOT HAVE IN EFFECT AN ALLOTMENT OF HIS SERVICE PAY TO COVER THE PREMIUMS ON NATIONAL SERVICE LIFE INSURANCE, PAYMENTS MADE BY THE ARMY TO THE VETERANS ADMINISTRATION TO COVER SUCH PREMIUMS WERE OVERPAYMENTS IN THE ACCOUNTS OF THOSE AGENCIES MADE UNDER MISTAKE OF FACT AND DID NOT CONSTITUTE PAYMENT OF PREMIUMS. WE ALSO REFERRED TO THE CASE OF MELVILLE V. UNITED STATES, 23 CT.CL. 74, WHEREIN THE COURT HELD THAT PAYMENT OF AN ALLOTMENT TO THE WIFE OF AN OFFICER WITHOUT SPECIFIC AUTHORITY OF LAW AND WITHOUT HIS CONSENT OR AUTHORIZATION DID NOT CONSTITUTE PAYMENT OF PAY AND HE THEREFORE COULD RECOVER THE AMOUNT WITHHELD FROM HIS PAY ON ACCOUNT OF SUCH ALLOTMENT PAYMENTS. THE BASIS OF THOSE DECISIONS WE HELD (QUOTING FROM THE SYLLABUS):

MEMBERS OF THE UNIFORMED SERVICES WHO MADE APPLICATION FOR NATIONAL SERVICE LIFE INSURANCE, BUT WHO FAILED TO EXECUTE AN ALLOTMENT OF PAY TO COVER THE PREMIUMS, ARE NOT LIABLE FOR PREMIUMS PAID ON THEIR BEHALF BY THE GOVERNMENT AND THE PREMIUM PAYMENTS MAY NOT BE REGARDED AS OVERPAYMENTS OR ERRONEOUS PAYMENTS TO THE MEMBER TO CONSTITUTE A DEBT WHICH COULD BE COLLECTED BY CHECK AGE AGAINST THE MEMBER'S PAY ACCOUNT UNDER AUTHORITY OF THE ACT OF JULY 15, 1954, 5 U.S.C. 46D.

ALLOTMENTS OF PAY ARE SIMPLY ORDERS ON THE PAYMASTER IN THE NATURE OF POWERS OF ATTORNEY AUTHORIZING THE PAY TO BE PAID TO CERTAIN DESIGNATED PERSONS WHO ARE THEREBY EMPOWERED TO RECEIVE AND RECEIPT FOR THE SAME. SEE 2 COMP. DEC. 654. AN ALLOTMENT AUTHORIZATION WHEN PROPERLY EXECUTED BECOMES THE LEGAL DOCUMENT WHICH AUTHORIZES THE SERVICES CONCERNED TO PAY A SPECIFIC AMOUNT OF A MEMBER'S MONTHLY PAY TO A DESIGNATED PAYEE. THE SECRETARY OF THE NAVY IS AUTHORIZED BY SECTION 6142 AND 6146 OF TITLE 10, U.S. CODE, TO PERMIT NAVY AND MARINE CORPS PERSONNEL TO REGISTER ALLOTMENTS FROM THEIR PAY. SIMILAR AUTHORITY FOR THE ARMY AND AIR FORCE IS CONTAINED IN SECTIONS 3689 AND 8689 OF TITLE 10, U.S.C. AS AN EXAMPLE OF THE SERVICE REGULATIONS, WHEN A CHANGE IS REQUIRED IN EITHER CLASS N (NATIONAL SERVICE LIFE INSURANCE), OR CLASS D (UNITED STATES GOVERNMENT LIFE INSURANCE) ALLOTMENTS, PARAGRAPH 11-75, ARMY REGULATIONS 37-104, PROVIDES THAT CHANGES IN ALLOTMENTS OF PAY, INCLUDING CHANGES IN THE MONTHLY AMOUNTS WILL BE MADE BY THE ALLOTTER DISCONTINUING THE OLD ALLOTMENT AND AUTHORIZING THE NEW ALLOTMENT ON DOD FORM 1341.

WHILE WE RECOGNIZE THE ADMINISTRATIVE PROBLEM IN THE PRESENT INSURANCE ALLOTMENT ARRANGEMENT, WE MAY NOT, IN THE ABSENCE OF A STATUTE SO PROVIDING, SANCTION A PROCEDURE WHICH WOULD HAVE THE EFFECT OF DIVERTING A PORTION OF A MEMBER'S TAKE-HOME PAY FOR INSURANCE RENEWAL PURPOSES WITHOUT HIS EXPRESS CONSENT. SINCE THE MEMBER AUTHORIZES A FIXED AMOUNT OF HIS PAY FOR HIS INSURANCE ALLOTMENT, IT IS OUR VIEW THAT IN THE LIGHT OF THE ABOVE DECISION OF JANUARY 25, 1956, AND THE AUTHORITIES THERE CITED, AN AUTOMATIC INCREASE IN THAT ALLOTMENT WITHOUT THE MEMBER'S EXPRESS AUTHORIZATION OR CONSENT WOULD NOT BE AUTHORIZED BY LAW. COMPARE DECISION OF AUGUST 20, 1962, B 149585, 42 COMP. GEN. 118, TO THE SECRETARY OF THE NAVY. ACCORDINGLY, WE MAY NOT GIVE OUR APPROVAL TO SUCH PROPOSAL.

WITH RESPECT TO YOUR ALTERNATIVE PROPOSAL WHICH WOULD REVISE THE ALLOTMENT AUTHORIZATION FORM TO AUTHORIZE ANY INCREASED AMOUNT OF ALLOTMENT REQUIRED TO COVER THE INCREASED VETERANS ADMINISTRATION PREMIUM AT THE EXPIRATION OF ANY PERIOD OF A 5-YEAR LEVEL PREMIUM TERM POLICY, WE UNDERSTAND THAT YOUR OFFICE MADE A SIMILAR PROPOSAL TO THE DEPARTMENT OF DEFENSE AND THAT SUCH DEPARTMENT EXPRESSED DISAGREEMENT WITH SUCH PROPOSAL. WHILE WE PERCEIVE NO LEGAL OBJECTION TO AMENDING THE ALLOTMENT AUTHORIZATION FORM AS INDICATED, SINCE THE USE OF THAT FORM IS A MATTER PRIMARILY WITHIN THE JURISDICTION OF THE DEPARTMENT OF DEFENSE, AND SINCE THAT DEPARTMENT MAY BE OPPOSED TO CHANGING THE PRESENT VOLUNTARY INSURANCE ALLOTMENT PROCEDURE, WE WOULD NOT BE JUSTIFIED IN APPROVING THE ALTERNATIVE PROPOSAL AT THIS TIME. WE UNDERSTAND, ALSO, HOWEVER, THAT THE DEPARTMENT OF DEFENSE IS WILLING TO COOPERATE WITH YOUR OFFICE TO WORK OUT SOME SOLUTION IN THE MATTER. IF THE VETERANS ADMINISTRATION AND DEPARTMENT OF DEFENSE SHOULD AGREE ON A PROPOSAL WHICH IT IS BELIEVED WILL SOLVE THE PROBLEM, AND THERE IS ANY DOUBT AS TO ITS LEGALITY, WE SHALL BE PLEASED TO COMPLY WITH A REQUEST FOR OUR VIEWS ON THE LEGALITY OF SUCH PROPOSAL.