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TO VETERANS ADMINISTRATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 7. THAT SHE REPEATEDLY ADVISED THE DEPARTMENT OF THE ARMY THAT SHE WAS UNABLE TO SPARE ANY OF THE VETERANS ADMINISTRATION FUNDS. YOU FURTHER STATE THAT: "YOUR ATTENTION IS CALLED TO EXEMPT STATUS OF THE FUNDS PAID BY THE VETERANS ADMINISTRATION AND TO THE FACT THAT THERE EXISTS NO OVERPAYMENT OR ILLEGAL PAYMENT UNDER "LAWS RELATING TO VETERAN" WHICH WOULD JUSTIFY THIS OFFICE IN LEGALLY ADVISING THE GUARDIAN TO CONSIDER THE PAYMENT OF ANY OF THE ANNUITY PREMIUMS.'. AN ELECTION WAS MADE BY THE SECRETARY OF THE ARMY EFFECTIVE APRIL 1954 ELECTING OPTIONS 3 AND 4. ONLY THE HEAD OF THE DEPARTMENT CONCERNED IS AUTHORIZED TO MAKE THE APPROPRIATE ELECTION OF OPTIONS ON BEHALF OF A MENTALLY INCOMPETENT MEMBER IF SO REQUESTED BY THE SPOUSE.

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B-127345, NOV. 2, 1956

TO VETERANS ADMINISTRATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 7, 1956 (FILE REFERENCE 3013-2AD, C 16 513 691, AKULIS, JOSEPH C.) REFERRING TO LETTER DATED JULY 23, 1956, FROM OUR CLAIMS DIVISION TO THE BALTIMORE NATIONAL BANK, BALTIMORE, MARYLAND, GUARDIAN OF JOSEPH AKULIS, SERGEANT FIRST CLASS, RETIRED, CONCERNING MR. AKULIS' INDEBTEDNESS TO THE UNITED STATES ON ACCOUNT OF THE FAILURE TO PAY THE REQUIRED DEPOSIT OF $18.41 A MONTH UPON MAKING AN ELECTION UNDER THE PROVISIONS OF THE UNIFORMED SERVICES CONTINGENCY OPTION ACT OF 1953, 67 STAT. 501, TO PROVIDE AN ANNUITY PAYABLE AFTER HIS DEATH TO HIS WIFE AND CHILD.

YOU STATE THAT YOUR OFFICE CAUSED THE BALTIMORE NATIONAL BANK TO BE APPOINTED LEGAL GUARDIAN OF MR. AKULIS TO RECEIVE AND DISBURSE VETERANS ADMINISTRATION COMPENSATION BENEFITS TO THE VETERAN AND HIS FAMILY. YOU SAY THAT THE WIFE OF THE INCOMPETENT VETERAN REVOKED HER ELECTION TWO MONTHS AFTER SHE MADE IT, AND THAT SHE REPEATEDLY ADVISED THE DEPARTMENT OF THE ARMY THAT SHE WAS UNABLE TO SPARE ANY OF THE VETERANS ADMINISTRATION FUNDS, $150 PER MONTH, TO PAY ANNUITY PREMIUMS. YOU FURTHER STATE THAT:

"YOUR ATTENTION IS CALLED TO EXEMPT STATUS OF THE FUNDS PAID BY THE VETERANS ADMINISTRATION AND TO THE FACT THAT THERE EXISTS NO OVERPAYMENT OR ILLEGAL PAYMENT UNDER "LAWS RELATING TO VETERAN" WHICH WOULD JUSTIFY THIS OFFICE IN LEGALLY ADVISING THE GUARDIAN TO CONSIDER THE PAYMENT OF ANY OF THE ANNUITY PREMIUMS.'

IT APPEARS FROM THE RECORDS BEFORE US THAT ON APRIL 29, 1954, MRS. MARIE C. AKULIS, SPOUSE OF INCOMPETENT SERGEANT FIRST CLASS JOSEPH AKULIS, RETIRED, REQUESTED THE SECRETARY OF THE ARMY TO MAKE THE ELECTION INDICATED ON THE FORM SUBMITTED BY HER ON BEHALF OF HER HUSBAND. ON THE BASIS OF THAT REQUEST, AND PURSUANT TO THE PROVISIONS OF SECTION 3 (C) OF THE CONTINGENCY OPTION ACT OF 1953, AN ELECTION WAS MADE BY THE SECRETARY OF THE ARMY EFFECTIVE APRIL 1954 ELECTING OPTIONS 3 AND 4, PAYABLE TO MARIE CATHERINE ATKULIS AND MARY MARGARET AKULIS AS BENEFICIARIES.

UNDER THE PROVISIONS OF SECTION 3 (C) OF THE CONTINGENCY OPTION ACT, 37 U.S.C. 372 (C), ONLY THE HEAD OF THE DEPARTMENT CONCERNED IS AUTHORIZED TO MAKE THE APPROPRIATE ELECTION OF OPTIONS ON BEHALF OF A MENTALLY INCOMPETENT MEMBER IF SO REQUESTED BY THE SPOUSE. SECTION 3 (B) OF THE ACT, 37 U.S.C. 372 (B) PROVIDES THAT "AN ELECTION SO MADE SHALL THEREAFTER BE IRREVOCABLE.' THAT SECTION WAS AMENDED BY THE ACT OF AUGUST 25, 1954, 37 U.S.C. 372 (A) TO PERMIT, WITHIN 60 DAYS AFTER AUGUST 28, 1954, TO REVOKE A PRIOR ELECTION WHEN IT IS ESTABLISHED TO THE SATISFACTION OF THE SECRETARY CONCERNED THAT SUCH ELECTION HAS RESULTED IN UNDUE HARDSHIP. SECTION 5 OF THE CONTINGENCY OPTION ACT, 37 U.S.C. 374, PROVIDES THAT A RETIRED MEMBER OF A UNIFORMED SERVICE WHO HAS MADE THE ELECTION SPECIFIED IN SECTION 3 SHALL, DURING ANY PERIOD IN WHICH HE IS NOT RECEIVING RETIRED PAY, DEPOSIT WITH THE UNITED STATES TREASURY THE AMOUNT WHICH WOULD HAVE BEEN WITHHELD FROM HIS RETIRED PAY HAD HE BEEN RECEIVING THAT PAY.

WE HELD IN 33 COMP. GEN. 460, 463, THAT IN VIEW OF THE EXPRESSED PROHIBITION AGAINST THE REVOCATION OF ELECTIONS BY RETIRED MEMBERS, CONTAINED IN SECTION 3 (B) OF THE 1953 ACT, IT IS FOR THE CONGRESS, AND NOT THE GENERAL ACCOUNTING OFFICE, TO RELIEVE SUCH MEMBERS OF THE CONSEQUENCES OF THEIR ELECTIONS. UNDER THE PROVISIONS OF THE ACT OF AUGUST 28, 1954, 37 U.S.C. 372 (A), ONLY THE SECRETARY OF THE ARMY COULD REVOKE THE ELECTION MADE BY HIM AND THEN ONLY WITHIN THE 60-DAY PERIOD AFTER AUGUST 28, 1954. NO ACTION APPEARS TO HAVE BEEN TAKEN IN THIS CASE BY THE SECRETARY OF THE ARMY WITHIN THE 60-DAY PERIOD. THE ELECTION MADE CONSTITUTES A CONTRACT TO PAY A MONTHLY SUM UP TO THE TIME OF THE MEMBER'S DEATH, OR UNTIL THERE IS NO BENEFICIARY ELIGIBLE TO RECEIVE AN ANNUITY UPON HIS DEATH, AS PROVIDED IN OPTION 4 OF THE ELECTION IN THIS CASE. GENERALLY, A GUARDIAN HAS THE POWER AND DUTY OF PAYING FROM THE FUNDS OF HIS WARD ALL JUST DEBTS WHICH ARE DUE FROM THE WARD. 25 AM.JUR. GUARDIAN AND WARD, 78, 79.

IN VIEW OF PROVISIONS IN 38 U.S.C. 454 (A), WHICH PROHIBIT THE COLLECTION BY SETOFF OR OTHERWISE OUT OF ANY BENEFITS PAYABLE PURSUANT TO ANY LAW ADMINISTERED BY THE VETERANS ADMINISTRATION, NO FURTHER COLLECTION PROCEEDINGS WILL BE TAKEN AGAINST THE BANK TO WITHHOLD COMPENSATION BENEFITS DUE THE VETERAN AND HIS FAMILY. IN THAT CONNECTION, HOWEVER, IF THE AMOUNTS SPECIFIED IN SECTION 5 ARE NOT PAID PRIOR TO THE TIME OF MR. AKULIS' DEATH, THE SURVIVING WIFE OR CHILD WOULD BE REQUIRED TO PAY THE TOTAL AMOUNT DUE, WITH INTEREST, OR TO AUTHORIZE APPLICATION OF THE ANNUITY TOWARDS PAYMENT OF SUCH AMOUNT, BEFORE THE ANNUITY COULD BE PAID.

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