A retired Marine Corps officer appointed to a series of temporary positions by the United States Bureau of the Census may have overpayments of military retired pay waived pursuant to 10 U.S.C. Sec. 2774 where facts show that he was not at fault in accepting overpayments in light of the passage of almost 20 years between his retirement and his civilian employment during which time dual compensation laws changed several times and the existence of statutory authority permitting exemption from dual compensation laws for Bureau of the Census employees in certain circumstances. 2. A retired Marine Corps officer who was employed under a temporary appointment with the U.S. Was unaffected by the amendment since the Act only applied to persons employed after its effective date and his employment preceded the Act's effective date. 3.
B-243864, Aug 1, 1991
DIGEST: 1. A retired Marine Corps officer appointed to a series of temporary positions by the United States Bureau of the Census may have overpayments of military retired pay waived pursuant to 10 U.S.C. Sec. 2774 where facts show that he was not at fault in accepting overpayments in light of the passage of almost 20 years between his retirement and his civilian employment during which time dual compensation laws changed several times and the existence of statutory authority permitting exemption from dual compensation laws for Bureau of the Census employees in certain circumstances. 2. A retired Marine Corps officer who was employed under a temporary appointment with the U.S. Census Bureau just prior to passage of Public Law 101-86, effective August 16, 1989, which granted 6-month exemptions from the Dual Compensation Act, 5 U.S.C. Sec. 5532, was unaffected by the amendment since the Act only applied to persons employed after its effective date and his employment preceded the Act's effective date. 3. Temporary appointments with the U.S. Census Bureau subsequent to enactment of Public Law 101-86 were not entitled to the law's 6-month exemption from the retired pay limitations of the Dual Compensation Act, where the member's retired pay was already subject to reduction by virtue of employment immediately prior to such appointments.
Major John D. Harris, USMC (Retired) - Request for Waiver:
Major John E. Harris, USMC, (Retired), appeals our Claims Group's denial of his request for waiver of overpayments of retired pay resulting from his civilian government employment after retiring from the Marine Corps. We reverse the Claims Group's denial of waiver for the overpayments up to the date he was notified by the Marine Corps of his debt, but sustain its finding that his subsequent employment with the Census Bureau was not exempt from the Act and that his pay during that time was properly subject to reduction.
On November 1, 1971, Major Harris retired from the United States Marine Corps under conditions entitling him to retired pay. On January 22, 1989, he accepted a temporary appointment with the United States Bureau of the Census for a period not to exceed January 22, 1990. He received a second temporary appointment on October 8, 1989 and a third on January 28, 1990 not to exceed January 27, 1991. Due to administrative error, Major Harris' retired pay was not reduced as it should have been under the provisions of the Dual Compensation Act, 5 U.S.C. Sec. 5532(b), resulting in an overpayment of retired pay. The Marine Corps determined that he was overpaid a total of $6,075.89 through December 31, 1989.
Our Claims Group, in denying Major Harris' claim for waiver, found him at fault in failing to submit DD Form-1357 upon commencing employment so that a prompt determination as to his status could have been made and the overpayment prevented. The Claims Group also found that Public Law 101- 86, effective August 16, 1989, which exempted retired officers working for the Census Bureau from the Dual Compensation Act for a 6-month period, was inapplicable to Major Harris' employment since his initial appointment preceded the effective date of the exemption and his successive appointments were continuations of the first.
The Dual Compensation Act of 1964, 5 U.S.C. Sec. 5532 provides that retired officers shall receive the full salary of a government position but their retired pay must be reduced to an annual rate equal to the first $2,000 plus one half of the remainder, adjusted upward according to Cost of Living increases (currently, approximately $8,000). It also provides for an additional reduction if the member's combined income totals more than the base pay rate for Executive Schedule Level V ($75,500).
Public Law 101-86, section 5, exempts appointments to the Census Bureau on or after the date of the law's enactment from the dual compensation restrictions for 6 months. Section 3 states that it does not apply to former members if "immediately before being placed in the temporary position, the retired or retainer pay of such former member was being reduced under 5 U.S.C. Sec. 5532." /1/
Under the provisions of 10 U.S.C. Sec. 2774, the Comptroller General may waive collection of certain debts where collection would be against equity and good conscience and not in the best interest of the United States, if there is no indication of fraud, misrepresentation, fault or lack of good faith on the part of the member. We have held that a retired officer who accepts civilian employment and thinks he might be exempt is at fault in drawing military retired pay if he fails to notify his agency of his employment and obtain a definite determination of his entitlements. Rear Admiral Harvey E. Lyon, USN (Retired), B-198955, April 13, 1981.
In his appeal of our Claims Group's decision, Major Harris states that at the time of his initial employment the subject of the Dual Compensation Act arose. He states he was advised by phone by the Marine Corps that he would only be covered by the Dual Compensation Act if his combined retirement and civilian employment income exceeded the minimum Civil Service Executive Level V salary of $75,500 annually. He provides copies of his notice of employment dated January 22, l989 to the Marine Corps and the Census Bureau's May 16, 1989 letter notifying the Marine Corps of his employment, although the Marine Corps denies receiving either. Major Harris contends that only his initial appointment should be covered by the Dual Compensation Act, since his subsequent appointments were subsequent to passage of Public Law 101-86 and were not continuations of the first since they involved different job titles as well as a change of job location of several hundred miles. Also, he contends that the overpayments from the first appointment should be waived since they were due to an administrative error and were received by him in good faith.
The standard we employ in finding fault for purposes of waiver under 10 U.S.C. Sec. 2774 is whether a reasonable person should have been aware that he was receiving a payment in excess of his proper entitlement. consider it reasonable to assume that Major Harris might have been less aware of the precise application of the dual compensation restrictions to him than he might otherwise have been in view of the fact that his initial employment occurred almost 20 years after his retirement in 1971, during which time the dual compensation law was modified several times. Likewise, we recognize the complexity of the dual compensation law. LTC Robert E. Fitzgerald, USA, (Retired), B-238761, Mar. 1, 1991. The special rules applicable to Census Bureau employees in certain circumstances, coupled with Major Harris' successive temporary appointments, add a further layer of complexity to the task of determining the application of dual compensation rules to this case. On this record, we do not find that Major Harris knew or reasonably should have known he was being overpaid during the period prior to his receipt of notification of his debt. Accordingly, it is our view that Major Harris was without fault and the amount overpaid during his initial appointment should be waived.
Major Harris' retired pay was not being reduced in accordance with the dual compensation statute. However, we believe that the provision of Public Law 101-86, which provides that the 6-month exemption is not applicable to a former member whose retired pay was being reduced under 5 U.S.C. Sec. 5532 immediately before being placed in a temporary position applies to his case since his retired pay should have been reduced. Therefore, the reductions in his pay after the Marine Corps notified him of the overpayments were proper.
The Honorable Phil Gramm
United States Senator
2323 Bryan Street, #1500
Dallas, Texas 75201
Dear Senator Gramm:
Reference is made to your letter dated May 1, 1991, with enclosures, on behalf of your constituent, Major John E. Harris, USMC, (Retired). Major Harris became employed by the United States Census Bureau in 1989. His employment with the government had the effect of subjecting his military retired pay to the restrictions provided by the Dual Compensation Act,
5 U.S.C. Sec. 5532, ultimately leading to a claim by the United States Marine Corps against him for the collection of erroneous overpayments of retired pay.
Enclosed is a copy of decision, Major John D. Harris, USMC, (Retired), B-243864, of today's date, in which we concluded that Major Harris was subject to the Act, but that collection of a portion of amounts claimed against him may be waived under the authority provided by 10 U.S.C. Sec. 2774.
We trust this will serve the purpose of your inquiry.
To: Director, Claims Group, GGD - Sharon Green
From: General Counsel - James F. Hinchman
Subject: Major John D. Harris, Z-2905752 (B-243864)
Returned herewith is your file Z-2905752, and our decision Major John D. Harris, USMC, Retired, B-243864, dated today.
/1/ This is consistent with the purpose of the amendment, namely, to serve as an incentive to attract federal retirees to administer the 1990 Census. House Post Office and Civil Service Committee, H.R. Rep. No. 101- 142, 101st Cong., 1st Sess. 2, reprinted in 1989 U.S. Code Cong. Ad. News 545.