IN THE CASE OF:	  

		BOARD DATE:	  3 November 2009

		DOCKET NUMBER:  AR20090004700 


THE BOARD CONSIDERED THE FOLLOWING EVIDENCE:

1.  Application for correction of military records (with supporting documents provided, if any).

2.  Military Personnel Records and advisory opinions (if any).


THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests that the order revoking his entitlement to retired pay at age 60 be rescinded and his retired pay status be reinstated or that he be placed on the Retired List due to a permanent physical disability with entitlement to retroactive benefits to the date of separation.  

2.  The applicant states that because of a miscalculation in his creditable service calculations he was not allowed to elect being placed on the retired list and had to accept disability severance pay in 1992.  With the correction of his creditable time, in 2005, he was issued a Notification of Eligibility for Retired Pay at Age 60 (commonly called a 20-Year Letter) and on attaining age 60 was placed on the Retired List with receipt of retired pay.  Initially, the Defense Finance and Accounting Service (DFAS) paid him retired pay but this was first reduced to recoup his severance pay.  Shortly thereafter it was discontinued completely with an overpayment being generated when Human Resources Command revoked his retirement. 

3.  The applicant provides copies of a 13 February 2009 DFAS letter; 23 January 2009 Army Human Resources Command, St. Louis (HRC-STL) Orders PO5-806372R; a gross pay worksheet; a 4 August 2005 20-Year Letter; and a 26 May 1992 National Guard Bureau (NGB) Form 22 (National Guard Bureau Report of Separation and Record of Service). 




CONSIDERATION OF EVIDENCE:

1.  Title 10, U.S. Code, section 1552(b), provides that applications for correction of military records must be filed within 3 years after discovery of the alleged error or injustice.  This provision of law also allows the Army Board for Correction of Military Records (ABCMR) to excuse an applicant’s failure to timely file within the 3-year statute of limitations if the ABCMR determines it would be in the interest of justice to do so.  While it appears the applicant did not file within the time frame provided in the statute of limitations, the ABCMR has elected to conduct a substantive review of this case and, only to the extent relief, if any, is granted, has determined it is in the interest of justice to excuse the applicant’s failure to timely file.  In all other respects, there are insufficient bases to waive the statute of limitations for timely filing.

2.  The applicant's service medical records are believed to be on permanent loan to the Department of Veterans Affairs and are not available for review.

3.  The applicant was born on 26 June 1948.  He enlisted in the Army National Guard on 21 November 1985 with 12 years, 8 months, and 18 day of prior active Federal Service and 1 year, 6 months and 6 days of inactive service. 

4.  On 14 March 1986, he entered the Active Guard Reserve (AGR) program and served on active duty until 25 May 1992.

5.  His 25 May 1992 DD Form 214 (Certificate of Release or Discharge from Active Duty) provides the following information:

	a.  the applicant was released from the AGR program under Title 32, U.S. Code (USC) 502(f);

	b.  he was authorized disability severance pay based on a disability rated  20 percent and 18 years, 5 months, and 5 days of creditable service; and

	c.  he was released from active duty under Army Regulation 635-40, paragraph 24(e)(3) and returned to the control of the Army National Guard with a narrative reason for separation of “permanent disability” and a separation program designator (SPD) code of “SFJ.”

6.  His NGB Form 22, dated 26 May 1992, shows the applicant:

	a.  had 6 years, 6 months, and 6 days of service for this period; 

	b.  had 1 year, 2 months, and 13 days of prior Reserve service; 
	c.  had 12 years, 8 months, and 18 days of prior active service;

	d.  had a total of 20 years, 5 months, and 7 days of service for pay; 

	e.  he was separated by reason of “Placement on the Permanent Disability Retired List”; and

	f.  he was transferred to the “ARPERCEN CONTROL GROUP (PDRL).”

7.  A 14 May 1992 Retirement Points History sheet shows the applicant had 19 years, 6 months, and 22 days of qualifying service for retired pay.

8.  A 23 June 1992 Retirement Points History sheet shows the applicant had 19 years, 10 months, and 19 days of qualifying service for retired pay.

9.  On 4 August 2005, the New Mexico Department of Military Affairs issued the applicant a 20-Year Letter. 

10.  A 5 August 2005 Retirement Points History sheet shows the applicant had 20 years, 5 months, and 9 days of qualifying service for retired pay.

11.  HRC-STL Orders PO5-806372, dated 6 May 2008, placed the applicant     on the Army of the United States (AUS) Retired List effective 26 June 2008.  HRC-STL Orders PO5-806372R, dated 23 January 2009, revoked these orders.

12.  A 10 February 2009 DFAS gross pay worksheet shows the applicant was charged with an $8,411.64 overpayment for the erroneous receipt of retired pay. 

13.  A 13 February 2009 DFAS letter notified the applicant that since he had received disability severance pay he could not also receive retired pay.  He had received a total of $44,361.00 in disability severance pay and the VA had recouped $10,452.00 from his disability compensation leaving a balance of $33,909.00.  His retired account was closed and an overpayment was generated for the monies paid in the amount of $8,411.64.

14.  In a letter requesting assistance from his Congressional Representative, the applicant states after his 1992 separation, he filed for and was granted VA benefits and the VA started to recoup his disability severance pay from his benefits.  In 2001, he was found to be 100 percent disabled and the VA stopped recouping monies.  In 2005, he was finally able to prove he had additional qualifying service and a 20-Year Letter was issued.  The letter states that he qualified for retirement at age 60 and that his eligibility for retired pay could not be denied or revoked based on any error, miscalculation, misinformation , or administrative error.  Based on receipt of the 20-Year Letter, at age 60 he applied for and received retired pay.  In February 2009, when he inquired why his retired payments were reduced, actions were taken to revoke his retirement benefits and create an overpayment of the majority of his retired pay.  He does not understand how this could happen and all of the conditions for which the VA has granted him a total disability evaluation were in existence at the time the Physical Evaluation Board rated him.  He also notes that there would not be an offset or recoupment after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2004.  He believes he should be placed on the Permanent Disabled Retired List effective with the date of his separation.

15.  In the development of this case the applicant was contacted by the staff of the Board in regards to the potential effect of a favorable granting of his request.

16.  The applicant's response to the staff inquiry was received on 22 October 2009.  The applicant indicated he would like the Board to process his request solely on that portion of his request to have his retirement reinstated.  He acknowledged that if the Board grants his request he will be subject to the recoupment of monies received for his disability severance pay.  He requests a full audit of the monies already recouped by both the VA and DFAS.  He also requests that the monies recouped as a result of the confusion of his receipt of retired pay be taken into consideration in determining his final total outstanding overpayment.  He notes that he has been paying off the retired pay overpayment and asks that these monies be included in the recalculation of benefits.

17.  Separation with disability severance pay occurs if the member is found unfit, has less than 20 years of service, and has a disability rating of less than 30%.  Disability severance pay equals 2 months basic pay for each year of service not to exceed 12 years (a maximum of 24 months basic pay).  The member may also be eligible to apply for monthly disability compensation from the VA, if the VA determines the disability is "service-connected." 

18.  Title 10, USC, section 1209 states that any member of the armed forces who has at least 20 years of service (for a reserve retirement) and who would be qualified for disability retirement but for the fact that his disability is less than      30 percent may elect, instead of being separated, to be transferred to the inactive status list under section 12735 of this title and, if otherwise eligible, to receive (reserve) retired pay upon becoming 60 years of age.

19.  Title 10, USC, section 1212(c) states the amount of disability severance pay received shall be deducted from any compensation for the same disability to which the former member becomes entitled under any law administered by the VA.  Thus, VA compensation may be withheld as an offset on a monthly basis until the total amount of military severance pay has been recovered.

20.  Permanent disability retirement occurs if the member is found unfit for duty with a disability that is determined permanent and stable and rated at a minimum of 30%, or the member has 20 years of military service.

21.  The National Defense Authorization Act for Fiscal Year 2004, Section 1414, states that any former service member (FSM) eligible for retired pay who is also eligible for veterans' disability compensation for disabilities rated 50 percent or higher is entitled to be paid both.

22.  Army Regulation 635-5-1 (Separation Program Designators (SPD)), the version in effect at the time, stated SPD “SFJ” would be used when the reason for separation was mandatory retirement due to “Physical disability – permanent.” SPD “JFL” would be used when the reason for separation was involuntary discharge due to “Physical disability with severance pay.”

DISCUSSION AND CONCLUSIONS:

1.  The applicant states that because of a miscalculation in his creditable service calculations he was not allowed to elect being placed on the retired list and had to accept disability severance pay in 1992.  He would like to have his retirement reinstated and is willing to repay the disability severance pay he received in 1992.

2.  The applicant’s problems started with the miscalculation of his qualifying service for a Reserve retirement at the time he was separated with disability severance pay and compounded when both his DD Form 214 and his NGB Form 22 were prepared indicating he had retired due to a permanent physical disability.  The miscalculation led to his not being able to elect a Reserve retirement over receiving disability severance pay, and it appears the erroneous SPD code and reason for separation may have led to HRC-STL initially processing him for retired pay.

3.  The applicant was discharged with disability severance pay in the amount of $44,361.00.  At the time his release from the AGR program, he applied for and started receiving VA disability benefits at a 20 percent evaluation.  In accordance with Federal regulations the VA was recouping a portion of the disability severance pay until the applicant received a 100 percent disability evaluation.  Recoupment of the disability severance pay was properly discontinued at this point.  

4.  After his discharge, the applicant was able to document that he had earned sufficient retirement points to qualify for receipt of a non-regular retirement at age 60.  His retirement points were corrected and, as a result of this correction, he was shown to qualify for retired pay at age 60 and was issued a 20-year letter.  On attaining age 60 he applied for and commenced receipt of retired pay.

5.  After several months, his retired pay was initially reduced to recoup the remaining disability severance pay.  A month later HRC revoked his retirement with entitlement to receipt of retired pay due to his receipt of disability severance pay in 1992 and an overpayment was generated for the retired pay received.

6.  A Soldier cannot receive retired pay after receiving disability severance pay.  While this is correct, in this case through no fault of the applicant he was not able to even consider election of retirement over disability severance pay.  This creates a significant injustice and warrants some type of relief.

7.  Had the applicant's retirement points been properly recorded at the time of his separation, the applicant would have been offered the opportunity to weigh the benefits between electing retired pay over disability severance pay.  The administrative error in his period of qualifying service deprived the applicant of his right to make a proper and informed decision and election.  

8.  HRC-STL should again issue the applicant retirement orders to replace the previously revoked orders and again place him on the Retired List.

9.  The applicant acknowledges that he is not entitled to both disability severance pay and retired pay and is more than willing to work out an equitable recoupment payment agreement if his retired pay entitlement is restored.

10.  In order to rectify the multiple errors, it is appropriate to correct the record to show that the applicant had 20 qualifying years of service as of 25 May 1992, that he was issued a proper 20-year letter, that he elected to receive non-regular retirement in lieu of disability severance pay, that he was transferred to the Retired Reserve 26 May 1992 with entitlement to retired pay upon attaining age 60, and that he was placed on the Retired List effective 26 June 2008 with entitlement to retired pay.

11.  The above action will invalidate the current retired pay overpayment. 

12.  The applicant’s DD Form 214 and NGB Form 22 should also be corrected to show the correct reason for separation and/or SPD code.

13.  Since a Soldier may not receive payment for both disability severance pay and retired pay, the record should be corrected to show an overpayment based on an erroneous receipt of disability severance pay was generated effective the date of his entitlement to receipt of retirement pay.  

14.  DFAS should do a full audit of the applicant's pay records, coordinating with the VA, to determine what monetary amounts the applicant is entitled to based upon what he has been paid under both his disability severance pay and retired pay and what monies have already been recouped against the payment of disability severance pay and the retired pay overpayments against the retired pay now due to him as a result of this correction.  Upon final calculation by DFAS, the applicant should be contacted to coordinate a schedule for repayment of any remaining disability severance pay overpayment.

15.  A Survivor Benefit Plan (SBP) election must be made prior to the effective date of retirement or the SBP will, by law, default to automatic SBP spouse coverage (if married).  This correction of records may have an effect on the applicant’s SBP status/coverage.  The applicant is advised to contact his nearest Retirement Services Officer (RSO) for information and assistance immediately.  A listing of RSOs by country, state, and installation is available on the Internet at website http://www.armyg1.army.mil/RSO/rso.asp.

BOARD VOTE:

___X___  ___X____  ___X____  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 State Army National Guard records and Department of the Army records of the individual concerned be corrected by:

	a.  showing the applicant had 20 years of qualifying service toward a Reserve retirement at age 60 and had received his 20-Year Letter at the time of his release from active duty on 25 May 1992 and that he elected to receive a Reserve retirement in lieu of disability severance pay;
	b.  correcting his DD Form 214 and/or any related documents to show he was separated due to physical disability with severance pay with an SPD of JFL;

	c.  correcting his NGB Form 22 to show he was separated due to physical disability with severance pay and transferred to the Retired Reserve; 

	d.  showing he was placed on the Retired List with entitlement to retired pay as of the date of his 60th birthday, 26 June 2008; and

	e.  having DFAS do a full audit of the applicant's pay records, coordinating with the VA, to determine what the monetary amounts the applicant is entitled to as a result of the above corrections and, upon final calculation by DFAS, contacting the applicant to coordinate a schedule for any repayment of the remaining disability severance pay overpayment.




      _______ _   X_______   ___
               CHAIRPERSON
      
I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case.


ABCMR Record of Proceedings (cont)                                         AR20090004700





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ABCMR Record of Proceedings (cont)                                         AR20090004700



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