B-238127, Jun 28, 1991

B-238127, Jun 28, 1991

MILITARY PERSONNEL - Pay - Retirement pay - Overpayments - Debt collection - Waiver DIGEST: A retired Air Force officer subject to the income limitations of the Dual Compensation Act who was erroneously overpaid retired pay when the Air Force could not obtain his civilian pay records may not have his debt waived where he failed to notify the Air Force of his employment for 4 years and asked for an exemption from the Act during the time he was being overpaid.

Major Kenneth G. Brown, USAF, Retired - Waiver Request:

This is an appeal from a Claims Group settlement that affirmed the decision of the Department of the Air Force denying waiver of the collection of overpaid retired pay from Major Kenneth G. Brown, USAF, Retired. The excess payments were made in connection with Major Brown's civilian government employment with the Air Force when his retired pay was not reduced in accordance with the Dual Compensation Act. /1/ Major Brown retired as a regular officer in 1977 and began employment with Robins Air Force Base in January 1983. From then until June l987 he was overpaid $32,390.33 in retired pay of which $9,977.83 has been collected. Counsel for Major Brown contends that the Air Force Accounting and Finance Center was aware of Major Brown's civilian employment from its beginning and refused to make the appropriate reduction in retired pay. As a result Major Brown should not have to repay the overpayments at this late date. Additionally, counsel questions the computation of this amount on the basis that deductions should not be made for non-workdays of civilian employment. For the following reasons we uphold the Claims Group settlement.

The record shows that Major Brown was notified that he was subject to the Dual Compensation Act in l983, and that reductions would be made in his retirement pay when his pay records were received from his employer. July 1983 he applied for an exception to the Act which the Air Force erroneously treated as a request for a waiver of dual compensation overpayments. Due in part to administrative errors, the Air Force could not locate his civilian pay records until October 1987, when he was notified that his records had been located and that he was indebted to the government for the amount in question.

The Air Force and our Claims Group maintain that Major Brown was aware from the outset of his employment of the Dual Compensation Act prohibitions since all retiring servicemen are so advised at retirement. Our Claims Group also noted that he certainly knew of the Act after the Air Force advised him in l983 and from which he thereafter sought exemption in July l983. They also point out that Major Brown did not execute a DD Form 1357 (Statement of Employment) as required by regulation until August 10, l987.

Major Brown nonetheless claims that it is inequitable for the government to require repayment at this late date of the amounts the Air Force failed to deduct due to its own error.

10 U.S.C. Sec. 2774 (l988) provides that the Comptroller General may waive collection of certain debts where collection is not in the best interests of the United States and would be against equity and good conscience, provided there is no fraud, misrepresentation, fault or lack of good faith on the part of the member. We have interpreted fault as used in the waiver statute as something less than a proven overt act or omission by the member. We consider fault to exist if in light of all of the facts it is determined that the debtor should have known an error existed and taken action to have it corrected 56 Comp.Gen. 943 (l977).

We have also held that persons receiving excess payments acquire no right to the money and are bound in equity and good conscience to make restitution and have a duty to set aside excess payments. Dr. Richard E. Goodwin, B-201818, Aug. 18, l981. We have also said that the knowledge of an overpayment carries with it a duty and obligation to return the excess sums or set aside amounts for refund at such time as the accounting error is corrected. Petty Officer James K. Boatman, B-197513, Sept. 24, l980.

As a civilian employee of the Air Force, Major Brown clearly is subject to the income limitations of the statute and overpayments are subject to collection by the government. Since Major Brown was advised of the Dual Compensation law when he retired in l977, and was obviously aware of it no later than July 1983, he should have known that he might have to repay a portion of his retirement pay. The fact that the Air Force was at fault in getting his pay records and in properly responding to his request for exemption from the Act does not excuse Major Brown's failure to make further inquiry into his status under the Act. Moreover, since the purpose of the DD Form 1357 is to facilitate information regarding a member's employment, his failure to submit the form until 4 years after he became employed was a contributing factor to the confusion in obtaining his pay records and for which he is at fault.

Concerning the computation of the indebtedness, 5 U.S.C. Sec. 5532(a) provides as follows:

"(a) For the purpose of this section, 'period for which he receives pay' means the full calendar period for which a retired officer of a regular component of a uniformed service receives the pay of a position when employed on a full-time basis, but only the days for which he actually receives that pay when employed on a part-time or intermittent basis."

Thus, during periods of part-time or intermittent employment the deductions should be applied only on the days for which he receives pay. Full-time employment requires deductions for the full calendar period for which he receives pay. If counsel for Major Brown wishes to pursue this issue it should be raised with the appropriate Finance Center personnel.

Accordingly, denial was proper and the Claims Group's settlement is affirmed.

/1/ 5 U.S.C. Secs. 5531, 5532. This law requires a reduction in the retired pay of a retired Regular officer of a uniformed service who holds a civilian position with the government.