B-160705, MARCH 6, 1967, 46 COMP. GEN. 684

B-160705, MARCH 6, 1967, 46 COMP. GEN. 684

PAY - READJUSTMENT PAYMENT TO RESERVISTS ON INVOLUNTARY RELEASE - RECOUPMENT - DISABILITY RETIREMENT THE FACT THAT A RESERVE OFFICER OF THE UNIFORMED SERVICES WHO QUALIFIED FOR VOLUNTARY RETIREMENT AFTER 20 YEARS OF ACTIVE SERVICE UNDER 10 U.S.C. 8911 IS RETIRED FOR DISABILITY AND ELECTS RETIRED PAY PURSUANT TO 10 U.S.C. 1401 COMPUTED ON THE BASIS OF HIS DISABILITY DOES NOT PRECLUDE THE APPLICATION OF 50 U.S.C. 1016 (C) REQUIRING RECOUPMENT OF 75 PERCENT OF A READJUSTMENT PAYMENT MADE TO A MEMBER OF A RESERVE COMPONENT WHO QUALIFIES FOR RETIRED PAY UNDER ANY PROVISION OF TITLES 10 OR 14 THAT AUTHORIZES RETIREMENT UPON COMPLETION OF 20 YEARS OF ACTIVE SERVICE. THEREFORE, THE OFFICER ELIGIBLE FOR RETIREMENT WITHIN THE MEANING OF 50 U.S.C. 1016 (C), AN EXEMPTION TO THE RECOUPMENT PROVISION ON THE BASIS OF PHYSICAL DISABILITY RETIREMENT, ABSENT CONGRESSIONAL APPROVAL FOR THE PAYMENT OF DUAL BENEFITS, WOULD BE INCONSISTENT WITH 50 U.S.C. 1016 (B) (6) REQUIRING READJUSTMENT PAY RECOUPMENT FROM DISABILITY COMPENSATION RECEIVED FROM THE VETERANS ADMINISTRATION.

TO THE SECRETARY OF DEFENSE, MARCH 6, 1967:

FURTHER REFERENCE IS MADE TO OUR LETTER TO YOU DATED FEBRUARY 1, 1967, B- 160705, REQUESTING AN ADMINISTRATIVE REPORT AND SUCH COMMENTS AS YOU MAY DEEM APPROPRIATE ON THE CLAIM OF MAJOR GEORGE D. LOCKE, USAF, RETIRED, FOR PAYMENT OF AMOUNTS NOW BEING WITHHELD BY THE AIR FORCE ACCOUNTING AND FINANCE CENTER FROM HIS RETIRED PAY TO RECOUP 75 PERCENT OF A READJUSTMENT PAYMENT OF $12,300 MADE TO HIM UPON HIS RELEASE FROM ACTIVE DUTY ON JUNE 30, 1962.

WE HAVE RECEIVED LETTER DATED FEBRUARY 20, 1967, FROM THE GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE COMMENTING ON THE CLAIM AND TRANSMITTING A REPORT FROM THE DEPARTMENT OF THE AIR FORCE SETTING FORTH THE FACTS SURROUNDING MAJOR LOCKE'S RETIREMENT AND THE PAYMENT TO HIM OF READJUSTMENT PAY.

IT IS REPORTED THAT WHEN MAJOR LOCKE WAS RELEASED FROM ACTIVE DUTY ON JUNE 30, 1962 HE WAS PAID READJUSTMENT PAY IN THE AMOUNT OF $3,900 AND THAT ON AUGUST 1, 1962, HE WAS PAID AN ADDITIONAL AMOUNT OF $8,400, OR A TOTAL OF $12,300, AS SUCH PAY. THEREAFTER, ON AUGUST 29, 1962, HE ENLISTED IN THE UNITED STATES AIR FORCE AND SERVED AS AN ENLISTED MAN UNTIL HE RETIRED ON APRIL 30, 1966, IN THE GRADE OF MAJOR UNDER 10 U.S.C. 1201 WITH 70 PERCENT PHYSICAL DISABILITY. IT IS FURTHER REPORTED THAT AT THE TIME OF HIS RETIREMENT HE HAD COMPLETED 20 YEARS AND 3 DAYS OF ACTIVE SERVICE AND 23 YEARS 6 MONTH AND 29 DAYS OF SERVICE FOR BASIC PAY WHICH QUALIFIED HIM FOR VOLUNTARY RETIREMENT (AFTER 20 YEARS OF ACTIVE SERVICE) UNDER 10 U.S.C. 8911.

IT IS ALSO REPORTED THAT HIS MONTHLY RETIRED PAY ENTITLEMENT, EFFECTIVE MAY 1, 1966, WAS $562.80, COMPUTED ON 70 PERCENT DISABILITY, THE FORMULA GIVING HIM THE GREATER BENEFITS. THIS AMOUNT WAS INCREASED TO $583.62, EFFECTIVE DECEMBER 1, 1966. THE AIR FORCE REPORT SHOWS THAT, ON THE BASIS OF THE CURRENT RATE OF WITHHOLDING FROM HIS RETIRED PAY, $9,225 (75 PERCENT OF $12,300) WILL BE RECOUPED BY SEPTEMBER 1967. MAJOR LOCKE'S RETIRED PAY WOULD BE PARTIALLY RESUMED IN SEPTEMBER 1967 WITH FULL RESUMPTION EFFECTIVE OCTOBER 1, 1967.

THE DEPARTMENT OF THE AIR FORCE, IN ITS REPORT REFERS TO OUR DECISION OF AUGUST 4, 1966, 46 COMP. GEN. 107, AND WHILE RECOGNIZING CERTAIN DIFFERENCES BETWEEN THE FACTS IN THAT CASE AND THOSE IN MAJOR LOCKE'S CASE, EXPRESSES THE VIEW THAT UNDER THAT DECISION AND THE APPLICABLE PROVISIONS OF LAW, RETIRED PAY SHOULD NOT BE PAID TO MAJOR LOCKE UNTIL RECOUPMENT OF 75 PERCENT OF THE READJUSTMENT PAY HAS BEEN COMPLETED.

THE GENERAL COUNSEL OF THAT DEPARTMENT OF DEFENSE STATES THAT "THE SERVICES HAVE INDICATED THAT THEY WOULD NOT PAY BOTH RETIRED PAY AND READJUSTMENT PAY IN A CASE SUCH AS MAJOR LOCKE-S.' THE GENERAL COUNSEL FURTHER STATES THAT IN THE LIGHT OF THE RECOUPMENT PROVISIONS IN 50 U.S.C. 1016 (C) AND 1016 (B) (6), IT SEEMS HIGHLY UNLIKELY THAT THE CONGRESS INTENDED TO PERMIT THE PAYMENT OF BOTH READJUSTMENT PAY AND RETIRED PAY IN CASES, SUCH AS MAJOR LOCKE-S, WHERE RETIRED PAY IS COMPUTED ON THE BASIS OF PERCENTAGE OF DISABILITY RATHER THAN YEARS OF ACTIVE SERVICE. THE GENERAL COUNSEL CONCLUDES THAT HE IS IN COMPLETE AGREEMENT WITH OUR TENTATIVE VIEWS AS EXPRESSED IN OUR LETTER OF FEBRUARY 1, 1967, TO YOU, THAT THE FACTUAL DIFFERENCES BETWEEN THE CASE OF MAJOR FREDERICK E. BAILEY (CONSIDERED IN THE DECISION OF AUGUST 4, 1966), AND THE CASE OF MAJOR LOCKE ARE NOT SUCH AS TO REQUIRE A CONCLUSION DIFFERENT FROM THAT REACHED BY THE AIR FORCE IN MAJOR LOCKE'S CASE.

THE PROVISIONS OF LAW UNDER WHICH RECOUPMENT OF THE READJUSTMENT PAYMENT FROM MAJOR LOCKE'S RETIRED PAY IS BEING MADE ARE CONTAINED IN SECTION 265 (C) OF THE ARMED FORCES RESERVE ACT OF 1952, AS ADDED BY THE ACT OF JULY 9, 1956, CH. 534, 70 STAT. 517, AND AMENDED BY THE ACT OF JUNE 28, 1962, PUBLIC LAW 87-509, 76 STAT. 121, 50 U.S.C. 1016 (C). THOSE PROVISIONS ARE AS FOLLOWS:

A MEMBER OF A RESERVE COMPONENT WHO HAS RECEIVED A READJUSTMENT PAYMENT UNDER THIS SECTION AFTER THE DATE OF ENACTMENT OF THIS AMENDED SUBSECTION AND WHO QUALIFIES FOR RETIRED PAY UNDER ANY PROVISION OF TITLE 10 OR TITLE 14 THAT AUTHORIZES HIS RETIREMENT UPON COMPLETION OF 20 YEARS OF ACTIVE SERVICE, MAY RECEIVE THAT PAY SUBJECT TO THE IMMEDIATE DEDUCTION FROM THAT PAY OF AN AMOUNT EQUAL TO 75 PERCENT OF THE AMOUNT OF THE READJUSTMENT PAYMENT, WITHOUT INTEREST.

WHILE THE OFFICER INVOLVED IN THE ABOVE-MENTIONED DECISION OF AUGUST 4, 1966, WAS RETIRED FOR DISABILITY UNDER 10 U.S.C. 1201 WITH 30PERCENT DISABILITY, HE WAS ALSO QUALIFIED FOR VOLUNTARY RETIREMENT WITH AT LEAST 20 YEARS OF ACTIVE SERVICE UNDER 10 U.S.C. 8911, AND ACTUALLY HAD HIS RETIRED PAY COMPUTED UNDER 10 U.S.C. 8991 ON HIS YEARS OF SERVICE, RATHER THAN UNDER 10 U.S.C. 1401 ON HIS PERCENTAGE OF DISABILITY, BECAUSE IT WAS ADVANTAGEOUS TO HIM TO HAVE HIS RETIRED PAY SO COMPUTED AND BECAUSE 10 U.S.C. 1401 PROVIDES THAT "A PERSON * * * ENTITLED TO RETIRED PAY COMPUTED UNDER MORE THAN ONE PAY FORMULA * * * IS ENTITLED TO BE PAID UNDER THE APPLICABLE FORMULA THAT IS MOST FAVORABLE TO HIM.' IN HOLDING THAT THE OFFICER WAS NOT ENTITLED TO BE PAID RETIRED PAY PRIOR TO RECOUPMENT OF 75 PERCENT OF THE READJUSTMENT PAY PAID TO HIM, WE SAID THAT AS FAR AS CAN BE DETERMINED FROM THE LEGISLATIVE HISTORY OF THE 1962 ACT (PUBLIC LAW 87- 509), THE REASONS FOR SUBJECTING A RETIRED MEMBER OF A RESERVE COMPONENT TO THE RECOUPMENT PROVISIONS OF SUBSECTION (C) APPEAR TO BE EXACTLY THE SAME WHETHER HE ACTUALLY IS RETIRED UNDER LAWS AUTHORIZING RETIREMENT UPON COMPLETION OF 20 YEARS OF ACTIVE DUTY OR HIS RETIRED PAY IS MERELY COMPUTED UNDER SUCH LAWS.

THE FACTS IN MAJOR LOCKE'S CASE DIFFER FROM THOSE CONSIDERED IN THE DECISION OF AUGUST 4, 1966, ONLY TO THE EXTENT THAT SUCH DECISION INVOLVED AN OFFICER WHO WAS RETIRED WITH 30 PERCENT DISABILITY AND WHO (BECAUSE IT HAPPENED TO BE TO HIS ADVANTAGE) HAD HIS RETIRED PAY COMPUTED ON HIS YEARS OF SERVICE RATHER THAN HIS PERCENTAGE OF DISABILITY, WHEREAS MAJOR LOCKE'S RETIRED PAY WAS COMPUTED ON THE BASIS OF 70 PERCENT DISABILITY RATHER THAN HIS YEARS OF SERVICE BECAUSE THAT BASIS OF DISABILITY RATHER THAN HIS YEARS OF SERVICE BECAUSE THAT BASIS OF COMPUTATION HAPPENED (CONSIDERING HIS YEARS OF SERVICE AND PERCENTAGE OF DISABILITY) TO GIVE HIM A HIGHER RATE OF RETIRED PAY. HOWEVER, THE STATUTORY PROVISIONS WHICH WERE HELD TO REQUIRE RECOUPMENT IN THE CASE CONSIDERED IN OUR DECISION OF AUGUST 4, 1966, APPEAR TO BE EQUALLY APPLICABLE, AND TO REQUIRE RECOUPMENT, IN MAJOR LOCKE'S CASE.

THE RECOUPMENT PROVISION OF THE 1962 ACT, REQUIRING DEDUCTION OF READJUSTMENT PAY FROM RETIRED PAY, APPLIES TO A MEMBER WHO "QUALIFIES FOR RETIRED PAY UNDER ANY PROVISION OF TITLE 10 OR TITLE 14 THAT AUTHORIZES HIS RETIREMENT UPON COMPLETION OF 20 YEARS OF ACTIVE SERVICE.' RECOGNIZE AN EXEMPTION FROM THAT RECOUPMENT PROVISION SOLELY ON THE BASIS OF A PHYSICAL DISABILITY RETIREMENT WHEN THE MEMBER OTHERWISE QUALIFIED FOR RETIRED PAY COMPUTED ON THE BASIS OF 20 YEARS' ACTIVE SERVICE WOULD APPEAR TO BE INCONSISTENT WITH ANOTHER PROVISION OF THE 1962 ACT, NAMELY, 50 U.S.C. 1016 (B) (6) WHICH REQUIRES A DEDUCTION FROM DISABILITY COMPENSATION RECEIVED FROM THE VETERANS ADMINISTRATION OF AN AMOUNT EQUAL TO 75 PERCENT OF THE READJUSTMENT PAY.

HAD CONGRESS INTENDED TO EXEMPT FROM THE RECOUPMENT PROVISION THOSE RESERVE MEMBERS WHO ARE OTHERWISE QUALIFIED FOR RETIRED PAY UPON COMPLETION OF 20 YEARS OF ACTIVE SERVICE BUT WHO ARE RETIRED BY REASON OF PHYSICAL DISABILITY AND WHO ARE GIVEN THE BENEFIT OF HAVING THEIR RETIRED PAY COMPUTED ON THEIR YEARS OF SERVICE OR THEIR PERCENTAGE OF DISABILITY, WE BELIEVE APPROPRIATE LANGUAGE WOULD HAVE BEEN USED TO ACCOMPLISH THAT RESULT. ORDINARILY, WHEN PAYMENTS IN THE NATURE OF DUAL BENEFITS ARE INTENDED, CONGRESS SPECIFICALLY AUTHORIZES SUCH PAYMENTS. SEE 50 U.S.C. 1016 (B) (5), DERIVED FROM THE SAME 1962 ACT, WHICH AUTHORIZES MONETARY BENEFITS FOR RESERVISTS RELEASED FROM ACTIVE DUTY PRIOR TO EXPIRATION OF AGREED TERM OF SERVICE, IN ADDITION TO READJUSTMENT PAY.

WHILE MAJOR LOCKE WAS RETIRED BY REASON OF PHYSICAL DISABILITY AND BECAME ENTITLED TO RETIRED PAY UNDER 10 U.S.C. 1401 HE WAS ALSO OTHERWISE QUALIFIED FOR RETIRED PAY UNDER 10 U.S.C. 8911 AND 8991 BECAUSE HE HAD COMPLETED OVER 20 YEARS OF ACTIVE SERVICE. IN THE LIGHT OF THE FOREGOING, IT IS OUR VIEW THAT THE OFFICER "QUALIFIES FOR RETIRED PAY UNDER * * * (A) PROVISION OF TITLE 10 * * * THAT AUTHORIZES HIS RETIREMENT UPON COMPLETION OF 20 YEARS ACTIVE SERVICE" WITHIN THE MEANING OF THE LANGUAGE USED IN 50 U.S.C. 1016 (C), AND THAT THE ACTION BEING TAKEN BY THE AIR FORCE TO RECOUP 75 PERCENT OF HIS READJUSTMENT PAY FROM HIS RETIRED PAY IS PROPER UNDER THE CIRCUMSTANCES. COMPARE THE PROVISIONS IN 10 U.S.C. 6382 (C), 6383 (F), AND 6384 (B) FOR DEDUCTION OF SEVERANCE PAY FROM ANY RETIRED PAY ACCRUING TO REGULAR NAVY AND MARINE CORPS OFFICERS ON THE BASIS OF THE SAME SERVICE FOR WHICH THE SEVERANCE PAY WAS ALLOWED.