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WHERE THE SERVICE RECORDS OF A FORMER MEMBER ARE CORRECTED UNDER 10 U.S.C. 1552. TO SHOW THAT HE WAS NOT DISCHARGED ON A PARTICULAR DATE BUT REMAINED ON ACTIVE DUTY UNTIL A LATER DATE AND THEN HONORABLY DISCHARGED. SUCH RECORDS AS CORRECTED BECOME HIS ONLY SERVICE RECORDS AND HIS ORIGINAL RECORDS ARE TREATED AS THOUGH THEY NEVER EXISTED. (2) WHERE A FORMER MEMBER OF AN ARMED FORCE RECEIVES AN EDUCATIONAL ASSISTANCE BENEFIT FROM THE VA BASED ON A STATUS AS A DISCHARGED VETERAN AND WHERE. HE IS RETROACTIVELY RESTORED TO AN ACTIVE DUTY STATUS AND BECOMES ENTITLED TO SMALLER EDUCATIONAL ASSISTANCE BENEFITS. SINCE DETERMINATION OF THAT ENTITLEMENT AND THAT OF ERRONEOUS PAYMENTS ARE WITHIN THE EXCLUSIVE JURISDICTION OF THE VA.

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B-177924, JAN 27, 1975

(1) WHERE THE SERVICE RECORDS OF A FORMER MEMBER ARE CORRECTED UNDER 10 U.S.C. 1552, TO SHOW THAT HE WAS NOT DISCHARGED ON A PARTICULAR DATE BUT REMAINED ON ACTIVE DUTY UNTIL A LATER DATE AND THEN HONORABLY DISCHARGED, SUCH RECORDS AS CORRECTED BECOME HIS ONLY SERVICE RECORDS AND HIS ORIGINAL RECORDS ARE TREATED AS THOUGH THEY NEVER EXISTED. (2) WHERE A FORMER MEMBER OF AN ARMED FORCE RECEIVES AN EDUCATIONAL ASSISTANCE BENEFIT FROM THE VA BASED ON A STATUS AS A DISCHARGED VETERAN AND WHERE, BY VIRTUE OF A CORRECTION OF HIS MILITARY RECORDS, HE IS RETROACTIVELY RESTORED TO AN ACTIVE DUTY STATUS AND BECOMES ENTITLED TO SMALLER EDUCATIONAL ASSISTANCE BENEFITS, SINCE DETERMINATION OF THAT ENTITLEMENT AND THAT OF ERRONEOUS PAYMENTS ARE WITHIN THE EXCLUSIVE JURISDICTION OF THE VA, ANY OVERPAYMENT OF BENEFITS BECOMES A DEBT TO THE UNITED STATES WHICH MUST BE RECOVERED, EITHER DIRECTLY OR IF THE INDIVIDUAL IS DUE OTHER SUMS FROM THE UNITED STATES, THEN, BY SETOFF. (3) THE POWER OF THE UNITED STATES TO RECOVER OVERPAYMENTS OF EDUCATIONAL ASSISTANCE BENEFITS PAID BY THE VA, BY SETOFF FROM OTHER MONIES DUE A FORMER MEMBER BY VIRTUE OF CORRECTION OF RECORDS, IS NOT LIMITED BY BATES V. UNITED STATES, 197 CT. CL. 35 (1972), WHICH HELD THAT IT WOULD BE IMPROPER TO SETOFF CIVILIAN EARNINGS FROM MILITARY BACK PAY AND ALLOWANCES IN ANY CASE WHERE SERVICE REGULATIONS WHICH REQUIRE SUCH SETOFF WERE NOT IN EFFECT, SINCE THE VA HAS DETERMINED THAT SUCH BENEFITS DO NOT QUALIFY AS A PENSION, BONUS OR COMPENSATION EARNED THROUGH EMPLOYMENT.

CLAIM FOR REIMBURSEMENT OF VA EDUCATIONAL ASSISTANCE BENEFITS - ROBERT L. SMITH:

THIS ACTION IS IN RESPONSE TO CORRESPONDENCE FROM PAUL R. HARMEL, ESQ., WRITTEN ON BEHALF OF STAFF SERGEANT ROBERT L. SMITH, XXX-XX-XXXX, REQUESTING RECONSIDERATION OF DECISION B-177924, OCTOBER 31, 1973 (53 COMP. GEN. 299) RENDERED IN HIS CASE.

IN THAT DECISION, IT WAS DETERMINED THAT WHERE AN INDIVIDUAL RECEIVES EDUCATIONAL ASSISTANCE ALLOWANCES UNDER 38 U.S.C. 1682(A) FROM THE VETERANS ADMINISTRATION (VA) WHILE ATTENDING SCHOOL AS A DISCHARGED VETERAN, BUT WHERE THERE IS A SUBSEQUENT CORRECTION OF HIS MILITARY RECORDS UNDER 10 U.S.C. 1552, TO SHOW THAT HE WAS STILL ON ACTIVE DUTY DURING THE PERIOD OF SCHOOL ATTENDANCE, HIS ENTITLEMENT TO EDUCATIONAL ASSISTANCE IS LIMITED TO THE ALLOWANCES PRESCRIBED FOR SERVICEMEN UNDER THE PROVISIONS OF 38 U.S.C. 1682(B). AS A RESULT, ANY EDUCATIONAL ASSISTANCE PAYMENTS MADE WHICH ARE IN EXCESS OF THE AMOUNT PRESCRIBED BY 38 U.S.C. 1682(B) ARE PROPERLY FOR SETOFF AGAINST ANY OTHER PAYMENTS DUE FROM THE UNITED STATES INCIDENT TO THE CORRECTION OF RECORDS ACTION TAKEN.

THE RECORDS SHOW THAT THE MEMBER RECEIVED A GENERAL DISCHARGE ON SEPTEMBER 8, 1969, FROM THE AIR FORCE, PRIOR TO THE NORMAL EXPIRATION OF HIS FOUR-YEAR ENLISTMENT ON DECEMBER 8, 1970. UPON RECOMMENDATION OF THE AIR FORCE BOARD FOR CORRECTION OF MILITARY RECORDS, THE ASSISTANT SECRETARY OF THE AIR FORCE, MANPOWER AND RESERVE AFFAIRS, BY MEMORANDUM DATED JUNE 30, 1971, DIRECTED THAT SERGEANT SMITH'S RECORDS BE CORRECTED TO SHOW THAT HE WAS NOT DISCHARGED ON SEPTEMBER 8, 1969, BUT THAT HE CONTINUED ON ACTIVE DUTY UNTIL DECEMBER 8, 1970, AT WHICH TIME HE WAS HONORABLY DISCHARGED UNDER THE PROVISIONS OF CHAPTER 3, SECTION A, AIR FORCE MANUAL 39-10 (EXPIRATION OF TERM OF SERVICE).

THE RECORDS SHOW FURTHER, THAT BASED UPON THE CORRECTION OF SERGEANT SMITH'S MILITARY RECORDS, THE AIR FORCE MADE A SETTLEMENT IN HIS FAVOR REFLECTING GROSS ENTITLEMENT TO PAY AND ALLOWANCES IN THE SUM OF $8,534.02, WITH DEDUCTIONS OF $3,143.49, AND A NET PAYABLE SUM OF $5,390.53. INCLUDED IN THOSE DEDUCTIONS WAS THE AMOUNT OF $1,173 WHICH REPRESENTED EDUCATIONAL ASSISTANCE ALLOWANCE PAYMENTS FROM THE VA PAID TO SERGEANT SMITH PRESUMABLY WHILE ATTENDING SCHOOL DURING THE PERIOD JULY 6, 1970, THROUGH DECEMBER 8, 1970, AT THE RATE OF $230 PER MONTH AS PRESCRIBED BY 38 U.S.C. 1682(A)(1) BASED UPON HIS ORIGINAL DISCHARGE DATE OF SEPTEMBER 8, 1969. IN VIEW OF THE CORRECTION OF RECORDS WHICH CHANGED HIS STATUS FROM THAT OF A DISCHARGED VETERAN TO THAT OF A SERVICEMAN, IT APPEARS THAT HE RECEIVED $1,093.20 ($1,173 - $79.80) IN EDUCATIONAL ASSISTANCE PAYMENTS TO WHICH HE WAS NOT ENTITLED.

IN THE REQUEST FOR RECONSIDERATION, IT IS STATED THAT THE SOLE QUESTION IN THIS CASE IS WHETHER THE SECRETARY OF THE AIR FORCE, IN EXERCISING THE BROAD EQUITABLE AND REMEDIAL POWERS CONFERRED BY 10 U.S.C. 1552, WAS REQUIRED TO MAKE A DEDUCTION IN THE AMOUNT OF THAT OVERPAYMENT FROM THE BACK PAY DUE. THE CASE OF BATES V. UNITED STATES, 197 CT. CL. 35, 453 F.2D 1382 (1972) WAS CITED AS BEING APPLICABLE.

IN THE BATES CASE, IT WAS HELD THAT IT WOULD NOT BE PROPER TO OFFSET CIVILIAN EARNINGS (WHICH WERE APPARENTLY EARNED IN THE PRIVATE SECTOR OF THE ECONOMY) FROM BACK PAY DUE THE PLAINTIFF IN ANY CASE WHERE SERVICE REGULATIONS WHICH REQUIRED THE DEDUCTION OF SUCH EARNINGS (AIR FORCE REGULATION 31-3, PARAGRAPH 26A, EFFECTIVE OCTOBER 21, 1970), WERE NOT IN EFFECT DURING THE PERIOD IN QUESTION. IT WAS HELD FURTHER, THAT ALTHOUGH THE COURT HAS ESTABLISHED THE PRECEDENT OF DEDUCTING CIVILIAN EARNINGS IN THE NATURE OF MITIGATION OF DAMAGES (SEE MOTTO V. UNITED STATES, 175 CT. CL. 862 (1966); CLACKUM V. UNITED STATES, 161 CT. CL. 34 (1963)), SINCE THE APPLICABLE AIR FORCE REGULATION AND PRACTICE THEN IN EFFECT DID NOT REQUIRE SUCH DEDUCTION, IT WAS ASSUMED THAT THE SECRETARY DID NOT INTEND THAT DEDUCTION SHOULD BE MADE.

WHILE THE BATES CASE DEALT WITH THE PROPRIETY OF DEDUCTING INTERIM CIVILIAN EARNINGS, THE PRESENT CASE INVOLVES EDUCATIONAL ASSISTANCE ALLOWANCES FROM THE VA WHICH ARE SPECIFICALLY AUTHORIZED BY CHAPTER 34 OF TITLE 38, U.S.C. TO ENABLE THE RECIPIENT "TO MEET, IN PART, THE EXPENSES OF HIS SUBSISTENCE, TUITION, FEES, SUPPLIES, BOOKS, EQUIPMENT, AND OTHER EDUCATIONAL COSTS." (SEE 38 U.S.C. 1681(A)). WE UNDERSTAND THAT THE VA HAS NEVER CONSIDERED THAT SUCH ALLOWANCES CONSTITUTE COMPENSATION EARNED THROUGH EMPLOYMENT, NOR HAVE THEY CONSIDERED IT TO BE A PENSION OR BONUS. RATHER, SUCH ALLOWANCES ARE CONSIDERED TO BE MERELY A MEASURE OF HELP FOR A SERVICE MEMBER OR A VETERAN, WHO, AS A TRAINEE, HAS RESUMED HIS EDUCATION OR TRAINING. IN VIEW OF THIS, WE DO NOT CONSIDER THE HOLDING IN THE BATES CASE TO BE FOR APPLICATION HERE.

THE RIGHT OF AN INDIVIDUAL TO RECEIVE AN EDUCATIONAL ASSISTANCE ALLOWANCE, AS ESTABLISHED BY 38 U.S.C. 1682 TO BE PAID BY THE VA, IS BASED UPON THE INDIVIDUAL'S MILITARY STATUS DURING THE PERIOD FOR WHICH THE ALLOWANCE IS REQUESTED. WHILE THE CORRECTION OF RECORDS PROCEDURE AUTHORIZED BY 10 U.S.C. 1552, CAN PLAY A ROLE IN ESTABLISHING OR REESTABLISHING AN INDIVIDUAL'S MILITARY STATUS AT A PARTICULAR TIME, THE AUTHORITY OF THE CORRECTION BOARD AND THE SECRETARIES CONCERNED IS LIMITED TO ACTION WHICH RELATES SOLELY TO THE CONSIDERATION OF MATTERS INVOLVED IN THE INDIVIDUAL'S MILITARY OR NAVAL RECORDS AND THE PROPOSED CHANGES IN THAT RECORD AS REQUESTED BY THE APPLICANT.

IN OUR DECISION OF JULY 7, 1954, 34 COMP. GEN. 7, WE HELD THAT THE SECRETARIES OF THE ARMY, NAVY, AIR FORCE AND TREASURY ARE NOT VESTED WITH ANY DISCRETIONARY POWER TO MAKE DETERMINATIONS OF SPECIFIC AMOUNTS WHICH ARE TO BE PAID AS A RESULT OF THE CORRECTION OF MILITARY OR NAVAL RECORDS PURSUANT TO SECTION 207 OF THE LEGISLATIVE REORGANIZATION ACT OF 1946, AS AMENDED (NOW CODIFIED IN 10 U.S.C. 1552). FURTHER, THAT THE AMOUNTS AUTHORIZED TO BE PAID UNDER SECTION 207(B) OF THAT ACT DEPEND SOLELY UPON A PROPER APPLICATION OF THE STATUTES TO THE FACTS AS SHOWN BY THE CORRECTED RECORD IN EACH PARTICULAR CASE. WE HAVE UNIFORMLY ADHERED TO THAT DECISION SINCE THAT DATE. SEE 40 COMP. GEN. 502 (1961); AND 45 ID. 47 (1965).

THUS, WHERE A SERVICE RECORD IS CORRECTED UNDER 10 U.S.C. 1552, THOSE BENEFITS WHICH FLOW FROM THE RECORD AS CHANGED COMPLETELY REPLACE ANY BENEFITS PREVIOUSLY RECEIVED AS THOUGH THEY NEVER EXISTED.

IN THE PRESENT CASE, IT IS INDICATED THAT THE CLAIMANT'S SERVICE RECORDS WERE CORRECTED TO SHOW THAT HE SERVED ON ACTIVE DUTY IN THE AIR FORCE UNTIL DECEMBER 8, 1970, AND THAT HE WAS HONORABLY DISCHARGED EFFECTIVE THAT DATE. AS A RESULT, THE CLAIMANT BECAME ENTITLED TO RECEIVE ADDITIONAL PAY AND ALLOWANCES FROM THE AIR FORCE AND ALL OTHER BENEFITS THAT OTHERWISE ACCRUED TO HIM IN HIS THEN STATUS AS A SERVICE MEMBER.

ALTHOUGH WE HAVE HELD THAT BENEFITS AFTER CORRECTION OF RECORDS ARE LIMITED TO THOSE FLOWING FROM THE CHANGED STATUS IT IS NOTED THAT THE QUESTION OF AN INDIVIDUAL'S MILITARY STATUS AND ELIGIBILITY FOR THE AWARDING OF EDUCATIONAL ASSISTANCE ALLOWANCE BENEFITS BASED ON THAT STATUS ARE MATTERS EXCLUSIVELY WITHIN THE JURISDICTION OF THE VA. FURTHER, SECTION 211(A) OF TITLE 38, UNITED STATES CODE, EXPRESSLY PROVIDES THAT DECISIONS OF THE ADMINISTRATOR ON ANY QUESTION OF LAW OR FACT CONCERNING A CLAIM FOR BENEFITS IS FINAL AND CONCLUSIVE AND NO OTHER OFFICIAL OR COURT OF THE UNITED STATES SHALL HAVE THE POWER OR JURISDICTION TO REVIEW SUCH DECISION. THIS OFFICE, THEREFORE, HAS NO AUTHORITY TO CHANGE OR REVERSE ANY DECISION OF THE VA PERTAINING TO THE ENTITLEMENT TO OR PAYMENT OF EDUCATIONAL ASSISTANCE ALLOWANCE BENEFITS TO ANY MEMBER OR FORMER MEMBER WHILE ATTENDING SCHOOL AS A MEMBER OF THE ARMED SERVICES OR AS A DISCHARGED VETERAN.

THEREFORE, IF THE VA MAKES A DETERMINATION THAT, BASED ON AN INDIVIDUAL'S STATUS, HE WAS ERRONEOUSLY PAID BENEFITS FROM THAT AGENCY, SUCH ERRONEOUS PAYMENTS BECOME A DEBT TO THE UNITED STATES WHICH MUST BE RECOVERED EITHER DIRECTLY FROM THE INDIVIDUAL OR IF THE INDIVIDUAL IS DUE OTHER SUMS FROM THE UNITED STATES, BY SETOFF FROM SUCH SUMS.

WE HAVE BEEN INFORMALLY ADVISED BY THE VA THAT THE DEDUCTIONS IN THE SUM OF $1,173 REPRESENTING OVERPAYMENTS TO MR. SMITH CANNOT BE CONSIDERED FOR WAIVER BY THEIR AGENCY. AS AUTHORITY FOR THAT DETERMINATION THEY CITE 38 C.F.R. 13.213, WHICH PROVIDES IN PERTINENT PART THAT AMOUNTS WHICH HAVE BEEN RECOVERED BY THE UNITED STATES GOVERNMENT PRIOR TO THE DATE OF RECEIPT BY THE VA OF A REQUEST FOR WAIVER WILL NOT BE REFUNDED AND WILL BE EXCLUDED FROM WAIVER.

ANY INQUIRIES CONCERNING THESE MATTERS OR REQUESTS FOR RECONSIDERATION OF THEIR POSITION SHOULD BE ADDRESSED TO THE DIRECTOR, EDUCATION AND REHABILITATION SERVICE, VETERANS ADMINISTRATION, WASHINGTON, D.C. 20420.

ACCORDINGLY, ON RECONSIDERATION, THE ACTION TAKEN IN OUR DECISION OF OCTOBER 31, 1973, 53 COMP. GEN. 299, IS SUSTAINED.

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