B-243388, May 22, 1991

B-243388, May 22, 1991

MILITARY PERSONNEL - Pay - Dual compensation restrictions - Overpayments - Debt collection - Waiver DIGEST: Member who knew his retired pay would be subject to dual compensation and pay cap restrictions when he accepted a civilian position should have known that he was being overpaid when no deductions were made from his retired pay. Since he did not take action in the matter he is not without fault and debt may not be waived.

Major Charles H. Barton, Jr., USMC, Retired:

This action is in response to a request for reconsideration of our Claims Group's denial of waiver of overpayments made to Major Charles H. Barton, Jr., USMC, Retired. Waiver was denied by our Claims Group in an October 19, 1990 settlement certificate. We sustain the denial.

Major Barton retired under conditions which entitled him to retired pay. On December 23, 1985, he directed questions to the Marine Corps Finance Center regarding the Civil Service Reform Act of 1978 and how its dual compensation provisions would affect him if he accepted a position with the United States Postal Service at a salary of approximately $20,000 per year. The Finance Center responded by letter of January 3, 1986 explaining the 1978 act and the Dual Compensation Act of 1964. /1/ The letter stated that the 1978 act would not apply but the restrictions of the 1964 act would apply. He accepted a different position with the Marine Corps Air Station, Beaufort, South Carolina for approximately $16,000 per year in December 1986. The Marine Corps retired pay section received a SF-50, Notification of Personnel Action, on December 12, 1986 advising of the member's civilian employment and made the appropriate calculations with regard to the Civil Service Reform Act of 1978. Since the total amount he received did not exceed the basic rate of pay then currently paid for Level V of the Executive Schedule, no deduction was made from his retired pay due to the Act of 1978; however, deductions should have been made under the Dual Compensation Act of 1964. Because of the administrative error, the Marine Corps did not make the appropriate deductions until December 1987, resulting in an overpayment of $7,412.

Major Barton requested waiver of the debt, stating that due to the excessive delay in notifying him of the debt, deduction of the debt from his retired pay is unjust. The waiver statute, 10 U.S.C. Sec. 2774, provides that the Comptroller General may waive collection of certain debts when collection would be against equity and good conscience and not in the best interests of the United States except where there exists in connection with the claim an indication of fraud, misrepresentation, fault or lack of good faith on the part of the member. This Office has long interpreted "fault" as used in the statute as including something more than a proven overt act or omission by the member. Thus we consider "fault" to exist if in the light of all the facts it is determined that the debtor should have known an error existed and taken action to have it corrected. The standard we employ is to determine whether a reasonable person should have been aware that he was receiving a payment in excess of his proper entitlement. In this case Major Barton was aware of the dual compensation restrictions because the Finance Center's January 3, 1986 letter clearly explained them. The Marine Corps also points out that in view of his former position as a disbursing officer, he should have been aware of his pay entitlement. Further, an agency's delay in collecting the debt is not a sufficient basis to authorize waiver of a debt which does not otherwise qualify. See B-239895, Feb. 14, 1991.

Major Barton argues he should be granted a waiver for the same reason waiver was granted in Admiral James D. Watkins, USN (Retired), B-234401, June 23, 1989. We do not agree. In that case the record established that Admiral Watkins reasonably assumed he was not being overpaid. In the case currently before us, Major Barton should have known, based on the January 3, 1986 letter from the Finance Center, that his retired pay should be reduced. In view of the above, we must conclude that Major Barton is not without fault in the matter and that denial of waiver must be affirmed.

/1/ The Dual Compensation Act of 1964 (5 U.S.C. Sec. 5532(a) (b)) applies to retired regular officers and prescribes aformula for the reduction of retired pay when a retiree is employed in a civilian capacity by the federal government. The Civil Service Reform Act of 1978 (5 U.S.C. Sec. 5532(c)) applies to both regular and reserve retirees and prohibits a combined civilian salary and military retired pay in excess of Level V of the Executive Schedule.