RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:        27 September 2007
      DOCKET NUMBER:  AR20070013115


      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.

|     |Ms. Catherine C. Mitrano          |     |Director             |
|     |Mrs. Nancy L. Amos                |     |Analyst              |


      The following members, a quorum, were present:

|     |Mr. Richard T. Dunbar             |     |Chairperson          |
|     |Mr. Chester A. Damian             |     |Member               |
|     |Mr. Edward E. Montgomery          |     |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.  The applicant requests that the records of her deceased spouse, a
former service member (FSM), be corrected to show he elected to participate
in the Survivor Benefit Plan (SBP) with the beneficiary as the Trust of
Michael Jason M___.  In an amended request, she requests that the FSM’s
records be corrected to show he elected to participate in the SBP for
insurable interest coverage (her daughter).  In a second amended request,
the applicant requests that the FSM’s be corrected to show he elected a
reduced base amount of SBP coverage.

2.  The applicant states that the FSM intended their severely disabled son
to be protected by the SBP.  Because she was eight years older than he was
and, with caring for their son, her health was not good and they made a
deliberate decision to elect child only coverage.  However, her son’s SBP
annuity is $913.00 a month, which put him $78.00 over the limit that he can
receive in order to receive critically-needed attendant care and medical
assistance through Medicaid.

3.  The applicant states that if the beneficiary of the SBP were changed to
the Trust of Michael Jason M___, instead of directly to her son, then the
annuity will not disqualify him from Medicaid because it will no longer be
counted as HIS (emphasis in the original) income.  In the alternative, if
the beneficiary were changed to their daughter, Charity, as an insurable
interest, their daughter will ensure that Michael will receive the benefits
of the SBP.

4.  The applicant provides a supplemental letter, dated 24 September 2007;
a letter, dated 24 September 2007, from a Legal Assistance Attorney; the
FSM’s DD Form 2656 (Data for Payment of Retired Personnel) with a
memorandum, dated 30 June 1999; a Department of Veterans Affairs Form 21-
526 (Veteran’s Application for Compensation or Pension); their son’s birth
certificate; a Medical Evaluation Report; a letter, dated 16 January 2007,
from Augusta Neurological Associates; a letter, dated 22 December 2006,
from the National Naval Medical Center; an Order for Appointment of
Guardian; and a letter, dated 13 June 2007, from Clark & Bradshaw, P.C.
Attorneys at Law with a Commonwealth Community Trust packet.

5.  The applicant also provides a letter, dated 14 September 2007, from the
Commonwealth of Virginia, Department of Veterans Affairs; a letter, dated 9
May 2007, from the Defense Finance and Accounting Service (DFAS); a letter,
dated 28 January 2007, from the Social Security Administration; two
letters, one dated
12 July 2007 and one dated 9 August 2007, from Clark & Bradshaw, P.C.
Attorneys at Law; a letter, dated 7 September 2007, from her Representative
in Congress; six letters of support; a newspaper article; the FSM’s death
certificate; the FSM’s Last Will and Testament; her certificate of marriage
to the FSM; the FSM’s retirement orders; and the FSM’s early retirement
approval.

CONSIDERATION OF EVIDENCE:

1.  On 21 July 1999, the FSM completed a DD Form 2656 and indicated that he
elected, with the applicant’s concurrence, to participate in the SBP for
child only coverage, full base amount.  He had one dependent son, who had
severe cerebral palsy.  On 1 September 1999, the FSM retired from active
duty in the rank of E-7 with 18 years, 10 months, and 18 days of service
for a voluntary retirement and 24 years, 2 months, and 15 days of service
for pay.

2.  Effective 1 January 1999, the pay rate for an E-7 with over 24 years of
service for pay was $2,778.90.  With about 18 years of service for
retirement, the FSM’s retired pay would have been about 45 percent of that
amount.

3.  On 5 December 2006, the FSM died.  The applicant is drawing Dependency
and Indemnity Compensation (DIC).

4.  Public Law 92-425, the SBP, enacted 21 September 1972, provided that
military members could elect to have their retired pay reduced to provide
for an annuity after death to surviving dependents.  A person who is not
married and does not have a dependent child upon becoming eligible to
participate in the SBP may elect to provide an annuity to a natural person
with an insurable interest in the member.  Premiums for insurable interest
coverage are generally higher than for any other category of coverage.

DISCUSSION AND CONCLUSIONS:

1.  It is recognized that it was the intent of the FSM to provide the
security of the SBP to his severely-disabled son.  Even if he had not
realized at the time that the applicant might outlive him, he may have
understood that she would have been eligible to draw DIC, which would have
precluded her from also receiving the SBP annuity (or at least not the full
portion of the SBP annuity).  Therefore, election of spouse only coverage
or spouse and child coverage would have left their son in basically the
same position he is now (i.e., unable to enjoy the full benefit of the
annuity).

2.  The applicant’s basic request, that the FSM’s records be corrected to
show he elected to participate in the SBP with the beneficiary as the Trust
of Michael Jason M___, cannot be granted because the law does not provide
for the payment of the annuity to a trust, only to a person.  The Board
cannot make a records correction that is contrary to law.

3.  Consideration was given to correcting the FSM’s records to show he
elected to participate in the SBP for insurable interest coverage.  The
beneficiary would have been his and the applicant’s daughter, with the
daughter providing for the care of her brother.  Unfortunately, the law is
also clear in this instance.  An election for insurable interest coverage
may only be made when there is no eligible spouse or child.

4.  However, there is an option that appears to suit the applicant’s needs
and the needs of her son.

5.  The FSM had elected to participate in the SBP based on his full retired
pay.  The applicant stated that her son’s SBP annuity is $913.00 a month,
which put him $78.00 over the limit that he can receive in order to receive
Medicaid assistance.

6.  Exact figures are not known; however, the FSM’s retired pay in 1999
should have been about $1,200.  If his records are corrected to show he
elected to participate in the SBP for a reduced base amount, i.e., $1,000,
her son’s SBP annuity should be reduced a sufficient amount to allow him to
continue to receive Medicaid assistance.  Such a reduction would entail a
recoupment of a portion of the SBP annuity already paid to the applicant’s
son, as well as a small refund of overpayment of deductions from the FSM’s
retired pay from 1999 until his death.

BOARD VOTE:

__rtd___  __cad___  __eem___  GRANT FULL RELIEF

________  ________  ________  GRANT PARTIAL RELIEF

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The Board determined that the evidence presented was sufficient to warrant
a recommendation for relief.  As a result, the Board recommends that all
Department of the Army records of the individual concerned be corrected by
correcting his records to show he elected to participate in the SBP for
child only coverage, reduced base amount, $1,000.00.




                                  __Richard T. Dunbar___
                                            CHAIRPERSON



                                    INDEX

|CASE ID                 |AR20070013115                           |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |20070927                                |
|TYPE OF DISCHARGE       |                                        |
|DATE OF DISCHARGE       |                                        |
|DISCHARGE AUTHORITY     |                                        |
|DISCHARGE REASON        |                                        |
|BOARD DECISION          |GRANT                                   |
|REVIEW AUTHORITY        |Ms. Mitrano                             |
|ISSUES         1.       |137.04                                  |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


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