B-154783, NOV. 25, 1964

B-154783, NOV. 25, 1964

TO COLONEL J. L. CLANCY:

REFERENCE IS MADE TO YOUR LETTER OF MAY 18, 1964, FORWARDED HERE ON JULY 21, 1964, UNDER DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE NO. DO-A-783, REQUESTING DECISION AS TO THE PROPRIETY OF PAYMENT ON A VOUCHER IN THE AMOUNT OF $47.05 REPRESENTING AN ADJUSTMENT IN RETIRED PAY IN THE CASE OF LIEUTENANT COLONEL JOHN F. LANGLEY, 0 8 973, RETIRED, FOR THE PERIOD MARCH 1 TO 31, 1964, AND FURTHER REQUESTING DECISION AS TO WHETHER HE WAS PAID CORRECTLY FROM APRIL 1, 1955, THROUGH FEBRUARY 28, 1964. THE MEMBER WAS RETIRED FOR AGE IN 1941.

FROM OCTOBER 1, 1949, TO SEPTEMBER 30, 1963, COLONEL LANGLEY WAS PAID RETIRED PAY UNDER METHOD (A) OF SECTION 511 OF THE CAREER COMPENSATION ACT OF 1949, APPROVED OCTOBER 12, 1949, CH. 681, 63 STAT. 829, COMPUTED IN ACCORDANCE WITH LAWS IN EFFECT PRIOR TO OCTOBER 1, 1949, WITH PERCENTAGE INCREASES THEREAFTER AND EFFECTIVE OCTOBER 1, 1963, HIS RETIRED PAY WAS ADJUSTED UNDER SECTION 5 (B) (1) OF THE UNIFORMED SERVICES PAY ACT OF 1963, APPROVED OCTOBER 2, 1963, PUB.L. 88-132, 77 STAT. 212. HIS RETIRED PAY WAS REDUCED FOR THE MONTH OF MARCH 1964 TO THE RATE PROVIDED IN SECTION 5 (B) (2) OF THE ACT OF OCTOBER 2, 1963 IN ACCORDANCE WITH HIS REQUEST IN ORDER THAT HE MIGHT CONTINUE RECEIVING SOCIAL SECURITY PAYMENTS BASED ON FREE WAGE CREDITS FOR MILITARY SERVICE UNDER SECTION 217 OF THE SOCIAL SECURITY ACT AS ADDED BY SECTION 105 OF THE ACT OF AUGUST 28, 1950, CH. 809, 64 STAT. 512, AS AMENDED, 42 U.S.C. 417. THE QUESTIONS PRESENTED ARE WHETHER:

"A. THE ACCOUNT WAS IN ORDER PRIOR TO 1 OCTOBER 1963, AND ENTITLEMENT WAS CORRECT AS ORIGINALLY COMPUTED UNDER SECTION 5 (B) (1) OF THE UNIFORMED SERVICES PAY ACT OF 1963 (EXCEPT NOTIFICATION WAS NOT FURNISHED THE FEDERAL SECURITY ADMINISTRATOR), AND THE OFFICER MAY RECEIVE THAT PAY AND YET RETAIN HIS RIGHT TO SOCIAL SECURITY BENEFITS BASED UPON FREE WAGE CREDITS ALREADY VESTED BY PUBLIC LAW 81-734; OR,

"B. IF ENTITLEMENT WAS CORRECT AS STATED IN PARAGRAPH A. AND THEREBY CAUSING THE LOSS OF ALL OR PART OF FREE WAGE CREDITS, MAY THE OFFICER DECLINE THE GREATER BENEFITS IN FAVOR OF THE 5 PERCENT INCREASE PRESCRIBED BY SECTION 5 (B) (2), AND THEREBY PRESERVE HIS RIGHT TO FREE WAGE CREDITS ALREADY VESTED BY PUBLIC LAW 81-734; OR,

"C. IF THE ANSWERS TO BOTH PARAGRAPHS A. AND B. ARE NEGATIVE, SHOULD THE ACCOUNT NOW BE ADJUSTED RETROACTIVELY FOR THE PERIOD 1 APRIL 1955 THROUGH 30 SEPTEMBER 1963, WITH APPROPRIATE INFORMATION FURNISHED THE FEDERAL SECURITY ADMINISTRATOR; AND,

"D. IF THE ANSWER TO PARAGRAPH C. IS IN THE AFFIRMATIVE, SHOULD ENTITLEMENT BE COMPUTED AS PRESCRIBED BY SECTION 5 (C) (1) OF THE UNIFORMED SERVICES PAY ACT OF 1963?

SECTION 105 OF THE ACT OF AUGUST 28, 1950, AMENDED THE SOCIAL SECURITY ACT BY PROVIDING GRATUITOUS WAGE CREDITS OF $160 PER MONTH TO BE CREDITED TO WORLD WAR II VETERANS FOR ACTIVE SERVICE DURING WORLD WAR II. SUCH GRATUITOUS CREDIT IS NOT AUTHORIZED IF A BENEFIT WHICH IS BASED, IN WHOLE OR IN PART, ON THE INDIVIDUAL'S ACTIVE MILITARY OR NAVAL SERVICE DURING WORLD WAR II IS DETERMINED BY ANY AGENCY OR WHOLLY OWNED INSTRUMENTALITY OF THE UNITED STATES (OTHER THAN VETERANS ADMINISTRATION) TO BE PAYABLE BY IT UNDER ANY OTHER LAW OF THE UNITED STATES OR UNDER A SYSTEM ESTABLISHED BY SUCH AGENCY OR INSTRUMENTALITY. THE STATUTORY LIMITATION ON THIS GRATUITOUS CREDIT HAS BEEN INTERPRETED AS APPLICABLE ONLY IF THE INDIVIDUAL'S ACTIVE MILITARY OR NAVAL SERVICE DURING THE PERIOD INVOLVED IS DIRECTLY CREDITED IN ESTABLISHING ELIGIBILITY TO OR IN COMPUTING THE AMOUNT OF THE BENEFIT. SEE PARAGRAPH 1813, SOCIAL SECURITY ADMINISTRATION CLAIMS MANUAL. UNDER PARAGRAPH 1838, DEALING WITH RETIREMENT FOR AGE, COLONEL LANGLEY'S MILITARY RETIRED PAY COMPUTED UNDER LAWS IN EFFECT PRIOR TO OCTOBER 1, 1949, APPARENTLY WAS NOT REGARDED AS A BENEFIT BASED IN WHOLE OR IN PART ON HIS ACTIVE MILITARY SERVICE DURING WORLD WAR II. A RECOMPUTATION OF RETIRED PAY UNDER METHOD (B) OF SECTION 511 OF THE CAREER COMPENSATION ACT, USING HIS YEARS OF ACTIVE SERVICE TO DETERMINE THE PERCENTAGE MULTIPLE WOULD REQUIRE A REASSESSMENT OF HIS SOCIAL SECURITY ENTITLEMENT AS PROVIDED IN PARAGRAPH 1840.

BEGINNING OCTOBER 1, 1949, THE COMPUTATION OF COLONEL LANGLEY'S RETIRED PAY WAS GOVERNED BY SECTION 511 OF THE CAREER COMPENSATION ACT WHICH PROVIDED THAT SUCH RETIRED PAY SHOULD BE PAID IN THE AMOUNT, WHICHEVER IS GREATER, COMPUTED BY ONE OF THE FOLLOWING METHODS: (A) MONTHLY RETIRED PAY IN THE AMOUNT AUTHORIZED FOR HIM BY PROVISIONS OF LAW IN EFFECT ON SEPTEMBER 30, 1949, OR (B) MONTHLY RETIRED PAY COMPUTED AT 2 1/2 PERCENTUM OF THE MONTHLY BASIC PAY OF THE HIGHEST FEDERALLY RECOGNIZED RANK, GRADE OR RATING SATISFACTORILY HELD BY HIM, MULTIPLIED BY THE NUMBER OF YEARS OF ACTIVE SERVICE CREDITABLE TO HIM. NO ELECTION OR CHOICE BETWEEN THESE TWO METHODS WAS AUTHORIZED. IN 37 COMP. GEN. 31, 34, WE HELD THAT "AFTER RECEIVING RETIRED PAY COMPUTED BY ONE METHOD, IF CONDITIONS CHANGE IN SUCH A MANNER THAT A RETIRED MEMBER'S PAY WOULD INCREASE BY COMPUTING HIS RETIRED PAY UNDER THE OTHER METHOD, SUCH RECOMPUTATION WAS AUTHORIZED AND REQUIRED UNDER SECTION 511 WITHOUT ANY ELECTION ON HIS PART. 29 COMP. GEN. 404, 407 408.' WE FURTHER HELD THAT THE AUTHORITY FOR SUCH RECOMPUTATION UNDER SECTION 511 WAS TERMINATED BY THE PROVISIONS OF THE CAREER INCENTIVE ACT OF 1955, APPROVED MARCH 31, 1955, CH. 20, 69 STAT. 18. SUBSEQUENTLY THE COURT OF CLAIMS IN THE CASE OF FAGAN, ET AL. (GOVER) V. UNITED STATES, 149 CT. CL. 716 (1960), RULED THAT THE 1955 ACT DID NOT TERMINATE THE RIGHT TO RECOMPUTE UNDER THE ALTERNATIVE METHODS PRESCRIBED IN SECTION 511 OF THE 1949 ACT BUT THAT UPON A CHANGE IN CONDITIONS THE MEMBERS RETIRED PAY MUST BE COMPUTED UNDER THE METHOD WHICH WOULD RESULT IN THE HIGHEST RETIRED PAY. SINCE THE PLAINTIFF GOVER'S RETIRED PAY WAS GREATER IF COMPUTED UNDER METHOD (B) OF SECTION 511, USING THE NEW RATES OF PAY PROVIDED IN THE 1955 ACT THAN IF COMPUTED UNDER METHOD (A) WITH THE PERCENTAGE INCREASE PROVIDED IN THAT ACT, THE COURT HELD THAT GOVER SHOULD BE PAID UNDER METHOD (B), EFFECTIVE APRIL 1, 1955. IN OUR DECISION OF OCTOBER 20, 1960, 40 COMP. GEN. 222, WE STATED THAT WE WOULD FOLLOW THE FAGAN (GOVER) DECISION.

A COMPUTATION OF COLONEL LANGLEY'S RETIRED PAY MADE IN ACCORDANCE WITH THE PROVISIONS OF THE CAREER INCENTIVE ACT SHOWS THAT EFFECTIVE APRIL 1, 1955, HIS ENTITLEMENT UNDER METHOD (B) OF SECTION 511 OF THE 1949 ACT WAS $367.77 PER MONTH, WHICH IS GREATER THAN THE RATE YOU REPORT HE WAS PAID, $358.11 PER MONTH, COMPUTED UNDER METHOD (A). BASED ON THE DECISIONS CITED ABOVE, THEREFORE, HIS RETIRED PAY ENTITLEMENT BEGINNING APRIL 1, 1955, ACCRUED ONLY UNDER METHOD (B) AT THE GREATER RATE. THE ACT OF MAY 20, 1958, PUB.L. 85-422, 72 STAT. 122, FURTHER AMENDED THE CAREER COMPENSATION ACT BY SUBSTITUTING HIGHER RATES OF ACTIVE DUTY BASIC PAY BUT PROHIBITED RETIRED MEMBERS SUCH AS COLONEL LANGLEY FROM RECOMPUTING THEIR RETIRED PAY UNDER THOSE RATES, AUTHORIZING INSTEAD A 6 PERCENT INCREASE IN THE RETIRED PAY TO WHICH THEY WERE ENTITLED ON THE DAY BEFORE THE EFFECTIVE DATE OF THAT ACT. ACCORDINGLY, COLONEL LANGLEY'S RETIRED PAY BEGINNING JUNE 1, 1958, ACCRUED AT THE RATE OF $389.84 PER MONTH. UPON PASSAGE OF THE 1963 PAY ACT, COLONEL LANGLEY WAS NOT A MEMBER OR FORMER MEMBER WHO, IN ACCORDANCE WITH SECTION 511 OF THE CAREER COMPENSATION ACT, WAS ENTITLED TO RETIRED PAY COMPUTED BY METHOD (A) OF THAT SECTION. THEREFORE HE DOES NOT COME WITHIN THE PURVIEW OF SECTION 5/B) OF THE 1963 ACT.

SECTION 5/C) OF THE 1963 ACT COVERS RETIRED MEMBERS WHO WERE RECEIVING RETIRED PAY UNDER THE CAREER COMPENSATION ACT BUT WHO WERE DENIED THE RIGHT TO RECOMPUTE UNDER THE PAY RATES CONTAINED IN THE 1958 ACT. UNDER SECTION 5 (C) (1) THE APPLICABLE RATE WOULD BE $445.63 PER MONTH, THE SAME AS THE RATE ACTUALLY PAID TO COLONEL LANGLEY AND UNDER SECTION 5 (C) (2) THE APPLICABLE RATE WOULD BE $409.33. SINCE ENTITLEMENT ACCRUES UNDER SECTION 5/C) AT THE RATE PROVIDED BY METHOD (1) OR METHOD (2) "WHICHEVER PAY IS THE GREATER" WITH NO PROVISION FOR ELECTING THE LESSER OF THE TWO AND NO PROVISION FOR CONSIDERING GRATUITOUS BENEFITS UNDER OTHER LAWS, COLONEL LANGLEY'S ENTITLEMENT EFFECTIVE OCTOBER 1, 1963, ACCRUED AT THE RATE OF $445.63 PER MONTH. IT IS WELL ESTABLISHED THAT IN THE ABSENCE OF A STATUTE SO PROVIDING, MILITARY RETIRED PAY CANNOT BE WAIVED. 28 COMP. GEN. 675. THEREFORE THE ONLY RATE OF RETIRED PAY PROPERLY PAYABLE TO COLONEL LANGLEY, BEGINNING OCTOBER 1, 1963, IS $445.63 PER MONTH.

YOU REFER TO THE MEMBER'S RIGHT TO FREE WAGE CREDITS UNDER THE SOCIAL SECURITY SYSTEM AS ,ALREADY VESTED BY PUBLIC LAW 81-734.' YOU ALSO REFER TO OUR DECISION, 34 COMP. GEN. 149, WHEREIN WE HELD THAT ANY RIGHT CONFERRED BY STATUTE MAY BE TAKEN AWAY BY STATUTE BEFORE IT BECOMES VESTED, BUT AFTER A RIGHT HAS VESTED REPEAL OF THE STATUTE WHICH CREATED THE RIGHT CANNOT AFFECT SUCH RIGHT. WHILE IT APPEARS THAT COLONEL LANGLEY BECAME ENTITLED TO THE $160 PER MONTH WAGE CREDITS FOR THE WORLD WAR II PERIOD UPON ENACTMENT OF THE 1950 STATUTE, A RIGHT TO SUCH CREDITS WAS NOT A VESTED RIGHT IN THE SENSE THAT IT COULD NOT BE AFFECTED AS TO FUTURE PERIODS BY A CHANGE IN THE BASIS ON WHICH IT RESTED. HIS RIGHT TO PAYMENT OF SOCIAL SECURITY BENEFITS IS FOR DETERMINATION BY THE SECRETARY OF HEALTH, EDUCATION AND WELFARE OR HIS DELEGATE AND SUCH BENEFITS ARE SUBJECT TO TERMINATION OR RECOMPUTATION UPON A CHANGE IN THE INDIVIDUAL'S RETIRED PAY STATUS. SEE SECTION 217 (A) (2) OF THE SOCIAL SECURITY ACT, AS AMENDED, 42 U.S.C. 417 AND PARAGRAPH 1840 OF THE SOCIAL SECURITY ADMINISTRATION CLAIMS MANUAL. SINCE COLONEL LANGLEY'S RETIRED PAY WAS INCORRECTLY PAID FOR THE PERIOD ON AND AFTER APRIL 1, 1955, THE SECRETARY WAS NOT ADVISED AS TO HIS ACTUAL RETIRED PAY ENTITLEMENT. QUESTION (A) IS ANSWERED IN THE NEGATIVE AND NO ANSWER TO QUESTION (B) IS REQUIRED.

WITH REFERENCE TO QUESTION (C), COLONEL LANGLEY'S RETIRED PAY ACCOUNT SHOULD BE ADJUSTED RETROACTIVELY FROM APRIL 1, 1955, AS STATED ABOVE AND THE SECRETARY OF HEALTH, EDUCATION AND WELFARE SHOULD BE SO ADVISED. PAYMENT OF ANY ADDITIONAL RETIRED PAY SHOULD BE WITHHELD UNTIL RECEIPT IN YOUR OFFICE OF NOTICE THAT THE SECRETARY OF HEALTH, EDUCATION AND WELFARE HAS RECOVERED FROM COLONEL LANGLEY ANY PAYMENTS OF SOCIAL SECURITY BENEFITS FOR THE SAME PERIOD WHICH THE SECRETARY MAY DETERMINE WERE ERRONEOUS OR UNTIL CONSENT HAS BEEN OBTAINED FROM THE OFFICER TO DEDUCT SUCH ERRONEOUS PAYMENTS FROM THE ADDITIONAL AMOUNT DUE AS RETIRED PAY.

THE VOUCHER FORWARDED WITH YOUR LETTER COVERING ADJUSTMENT FOR THE MONTH OF MARCH 1964 IS RETURNED APPROVED FOR PAYMENT PROVIDED THERE IS NO OVERPAYMENT OF SOCIAL SECURITY BENEFITS FOR ..END :