RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:        26 APRIL 2005
      DOCKET NUMBER:  AR20040006368


      I certify that hereinafter is recorded the true and complete record
of the proceedings of the Army Board for Correction of Military Records in
the case of the above-named individual.

|     |Mr. Carl W. S. Chun               |     |Director             |
|     |Mr. Kenneth H. Aucock             |     |Analyst              |


      The following members, a quorum, were present:

|     |Mr. Melvin Meyer                  |     |Chairperson          |
|     |Ms. Karen Heinz                   |     |Member               |
|     |Mr. Lawrence Foster               |     |Member               |

      The Board considered the following evidence:

      Exhibit A - Application for correction of military records.

      Exhibit B - Military Personnel Records (including advisory opinion,
if any).

THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  In effect, the applicant requests cancellation of his indebtedness to
the government.

2.  The applicant states that he will retire before his retention control
point (RCP) date and will receive no pay due for 6-7 months after [his
retirement].  He has to provide for his children and himself.  His oldest
son will be in college and the youngest is right behind him.

3.  The applicant provides the documents depicted herein.

CONSIDERATION OF EVIDENCE:

1.  The applicant enlisted in the Army for 3 years on 1 July 1985 and has
remained on continuous active duty.

2.  A 13 February 2004 Pay Adjustment Authorization shows that the
applicant was overpaid for BAH (basic allowance for housing) in the amount
of $23,102.91 from 8 January 1999 to 4 November 2003; and for FSH (Family
Separation Housing) in the amount of $223.33 from 10 July 1999 to 16
September 1999.  That document indicated that the applicant was receiving
the grandfather rate of BAH; however, he was not entitled to that rate once
he moved out of single type quarters after 1 January 1998.  When he arrived
[at his new duty station] another BAH rate should have been authorized (BAH-
DIFF instead of BAH-II).  It indicated that the applicant was [improperly]
receiving the grandfather rate until   4 November 2003.  That document also
indicated that he was paid FSH that he was not entitled to.

3.  In a 4 February 2004 sworn statement the applicant stated that while
inprocessing at Mannheim, Germany, the clerk had him complete a form
starting BAQ (basic allowance for quarters) (BAH-II) for his dependents.
After inprocessing at Fort Eustis, Virginia, he was informed that he was no
longer grandfathered at the BAH-II rate, that the change took effect on 1
January 1998, and that as of 8 January 1999 the BAH-DIFF should have been
authorized.  He stated that he never heard of and was not informed of the
change.  He stated that he could not pay back $23,000.00

4.  On 2 February 2004 the applicant completed a DA Form 3508-R
(Application for Remission or Cancellation of Indebtedness).  In so doing
he stated that he was undecided regarding whether to reenlist, that he had
never been married, and that he had two sons, one 18 and the other 15, who
did not reside with him.  He indicated that his total monthly net income
was $3,699.80 and his total monthly expenses, $4,854.42.   He showed an
unpaid balance on a car debt incurred in September 2003 of $23, 910.89, a
VISA debt incurred in September 2003 of $6,234.00, a loan of $3,193.10
incurred in September 2003, a debt to the Army-Air Force Exchange System of
$4,300.00 incurred in September 2003, and an advance payment debt of
$1,840.00 incurred in October 2003.  He listed his allotments to the tune
of $2,294.21, and his cash assets in the amount               of $9,750.00.


5.  In a 2 February 2004 memorandum to the Defense Military Pay Office at
Fort Eustis, the applicant’s battalion commander at Fort Eustis requested
remission or cancellation of the applicant’s indebtedness, stating that he
had reviewed the applicant’s financial situation, that his BAH was
automatically stopped after leaving his losing unit, and that upon his
arrival in Germany in January 1999, he recertified his BAH status, which he
did at the “with dependent” rate due to his child support payment.  He
filled out the form annotating that he had two children not living with him
at the time.  The clerk verified his status and started his BAH at the
“with dependent” rate.  That officer noted that the rule concerning BAH
changed on 1 January 1998; however, Soldiers were grandfathered until their
current BAH status changed due to a permanent change of station (PCS) or
they moved out of single-type government quarters.  After 1 January 1998
Soldiers who were paying child support and living in single type government
quarters would then be paid at the BAH-DIFF rate.  He stated that the
applicant recertified his BAH status as required, the same way he had done
it in the past, and that he was not notified that he was no longer entitled
to the “with dependent” rate, and that the FAO (finance and accounting
office) in Germany should have started his BAH at the correct rate.  Since
the applicant was grandfathered, he might not have known that he was no
longer entitled at the “with dependent” rate.  The change was not sent out
to the field or to the applicant.  The mistake was a FAO mistake and the
applicant should not be held solely liable for the repayment.  There was no
intent on the part of the applicant to defraud the government.  Repayment
would create an undue hardship for the applicant.

6.  The Commandant of the Noncommissioned Officer Academy at Fort Eustis
had previously requested that the applicant’s indebtedness be cancelled,
stating that the debt would cause serious hardship for the applicant as his
monthly pay was minimal, because of his other living expenses.

7.  A leave and earning statement for the period 1-31 January 2004 shows
that after deductions and allotments, the applicant received a mid month
pay of $562.91 and an end of month pay of $562.14.  The deductions included
a partial pay of $390.00, $230.69 for TSP (thrift saving plan), and $184.00
to repay an advance [on his pay].  That statement indicated that his total
indebtedness was $23,326.22 and that the indebtedness was suspended.

8.  On 22 March 2004 the Defense Military Pay Office forwarded the
applicant’s request to the Human Resources Command, recommending that the
BAH portion of the debt be collected for 50 percent of the total debt due
to the circumstances of the overpayment – both the applicant and the
finance office should share responsibility for the overpayment.  That
office, however, recommended that the FSH portion of the debt be collected
in full since this was an entitlement that should not have ever been paid.

9.  In response thereto the Human Resources Command approved partial
cancellation of the applicant’s indebtedness in the amount of $11,551.44,
and stated that there were no grounds to remit or cancel the remaining
portion of the debt on the basis of injustice or hardship.  That command
stated that the applicant should be advised to contact the FAO for
proration of the remaining balance of $11,774.77.

10.  Effective 1 January 1998, Basic Allowance for Housing (BAH) generally
provided members a monthly allowance for housing.  This allowance is
authorized for members with and without dependents.  Basic Allowance for
Housing is intended to pay only a portion of housing costs.  Basic
Allowance for Housing will consist of BAH, BAH-II, BAH Difference (BAH-
DIFF), Partial BAH, Overseas Housing Allowance (OHA), and Family Separation
Housing (FSH).  Basic Allowance for Housing also consists of the former
allowances known as basic allowance for quarters and variable housing
allowance.  Basic Allowance for Housing DIFF is the difference between the
with and the without dependents BAH rates as of 31 December 1997.  Family
Separation Housing is the former allowance known as family separation
allowance Type I.

11.  A member who was assigned to single-type government quarters and
entitled to BAH at the with dependents rate solely on the basis of the
member’s payment of child support on 4 December 1991, is entitled to BAH-II
at the with-dependent rate until such time as the member becomes entitled
to receive BAH on behalf of a dependent for a reason other than, or in
addition to, the member’s payment of child support.  If a member moves out
of single-type government quarters, or has a PCS on or after 1 January
1998, the member is no longer entitled to BAH-II under the preceding
sentence.  Basic Allowance for Housing entitlement in such cases will be
determined under the normal rules.
A member not assigned to government quarters, who is entitled to BAH on
behalf of a dependent solely on the basis of payment of child support, is
entitled to BAH at the without dependents rate and BAH-DIFF.
12.  The purpose of Type I FSA is to pay a member for added housing
expenses resulting from enforced separation from dependents.  Type II FSA
provides compensation for added expenses incurred because of an enforced
family separation.  Family Separation Housing (FSH) replaced FSA-I.

DISCUSSION AND CONCLUSIONS:

1.  The fact that the applicant is indebted to the government for money
that he received because of an overpayment of his allowances, while
unfortunate, does not constitute an injustice to him.  In this respect,
however, it appears that the applicant’s indebtedness was not entirely his
fault.  He did what he was supposed to have done, recertify his BAH status,
perhaps unaware of the rule change concerning his allowances.

2.  The applicant’s battalion commander recommended that his debt be
forgiven, noting that the applicant was not at fault because of the
overpayment, and stating that repayment would create an undue hardship for
the applicant.  The Defense Military Pay Office at Fort Eustis indicated
that both the applicant and the finance office shared responsibility for
the overpayment and recommended partial relief of the debt.  In all
fairness to the applicant, the Human Resources Command, acting on that
recommendation, cancelled almost half of the money that he owed, and stated
that there was no reason to cancel the remaining portion of the debt on the
basis of injustice or hardship.

3.  In this respect, the Board agrees.  A review of the applicant’s income,
expenses, and assets, as shown on this application for cancellation of his
indebtedness and his leave and earning statement for January 2004,
indicates that repayment of the remaining debt to the government would not
cause an undue hardship to him.

4.  Notwithstanding the applicant’s contention, there is no injustice done
to him.  He had the benefit of the money resulting from the overpayment and
a good portion of his debt resulting from this overpayment has been
cancelled.  His request to cancel the remaining portion of his indebtedness
to the government is not warranted.

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF

________  ________  ________  GRANT PARTIAL RELIEF

________  ________  ________  GRANT FORMAL HEARING

__MM___  ___KH   _  ___LF___  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The evidence presented does not demonstrate the existence of a probable
error or injustice.  Therefore, the Board determined that the overall
merits of this case are insufficient as a basis for correction of the
records of the individual concerned.





                                  ______Melvin Meyer_________
                                            CHAIRPERSON



                                    INDEX

|CASE ID                 |AR20040006368                           |
|SUFFIX                  |                                        |
|RECON                   |YYYYMMDD                                |
|DATE BOARDED            |20050426                                |
|TYPE OF DISCHARGE       |(HD, GD, UOTHC, UD, BCD, DD, UNCHAR)    |
|DATE OF DISCHARGE       |YYYYMMDD                                |
|DISCHARGE AUTHORITY     |AR . . . . .                            |
|DISCHARGE REASON        |                                        |
|BOARD DECISION          |DENY                                    |
|REVIEW AUTHORITY        |                                        |
|ISSUES         1.       |128.10                                  |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


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