IN THE CASE OF:	  

		BOARD DATE:	        29 October 2009

		DOCKET NUMBER:  AR20090009294 


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 correction of his 13 December 1993 DD Form 214 (Certificate of Release or Discharge from Active Duty) to show that his disability severance pay has been paid back to the Government.

2.  The applicant states his DD Form 214 shows he received severance pay.  He also states that orders issued to him on 11 March 2008 indicate the severance pay was revoked because he paid the severance pay back.  He adds he would like to apply for retired pay now that he is over 60 years of age; however, he cannot because the entry regarding severance pay remains on his DD Form 214.

3.  The applicant provides, in support of his application, copies of three State of Michigan Council, State Service Representative Office, Detroit, MI, letters; two VA Forms 21-4138 (Statements in Support of Claim), dated 4 June 2008;
DD Form 2860 (Claim for Combat-Related Special Compensation); VA Form 5602 (Receipt for Returned Treasury Check), dated 30 May 2008; Department of Veterans Affairs (VA), VA Loan Guaranty Eligibility Center, Winston-Salem, NC, letter, dated 13 March 2008; pages 12 and 13 of Chapter 3 (Disability Compensation); a typed letter, dated 6 August 2008; three pages of hand-written notes; two Headquarters, U.S. Total Army Personnel Command, Alexandria, VA, memoranda; and five DD Forms 214.

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 was inducted into the Army of the United Stated (AUS) on
23 October 1969 and he had continuous honorable active duty service through 12 July 1978.  Records show his date of birth is 5 March 1948.

3.  The applicant enlisted in the U.S. Army Reserve on 19 September 1978 and he was ordered to active duty for training from 18 August 1980 to 26 May 1981.  He was ordered to active duty in support of Operation Desert Shield/Desert Storm on 27 August 1990.

4.  A Headquarters, U.S. Army Reserve Personnel Center, St. Louis, MO, memorandum, dated 25 June 1992, shows the applicant was notified of his eligibility for retired pay at age 60.

5.  On 26 April 1993, a U.S. Army Physical Evaluation Board (PEB) found the applicant physically unfit and recommended a combined rating of 20 percent.
The PEB also found that the applicant's separation was not based on disability from an injury or disease received in the line of duty as a direct result of armed conflict, or caused by an instrumentality of war and incurred in the line of duty during a period war as defined by law, and the disability did not result from a combat related injury.

6.  A Headquarters, U.S. Total Army Personnel Command, Alexandria, VA, memorandum, undated, subject:  Election as to Disposition by Reason of Physical Disability, shows the applicant was notified that the findings of the PEB that convened on 26 April 1993 had been approved.  This document also shows the applicant was advised that since he had completed at least 20 years of satisfactory Federal service, he would be eligible to apply for retirement benefits upon reaching age 60.

7.  A Headquarters, U.S. Total Army Personnel Command, Alexandria, VA, memorandum, dated 28 October 1993, subject:  Election as to Disposition by Reason of Physical Disability (Second Request) shows the applicant was again notified of the findings of the PEB that convened on 26 April 1993 and advised to complete his election as to his disposition not later than 18 November 1993.

8.  A Headquarters, U.S. Total Army Personnel Command, Alexandria, VA, memorandum, undated, subject:  Transfer to an Inactive Status or Discharge with Severance Pay (Second Request), shows the applicant was offered the option to transfer to the Retired Reserve with entitlement to apply for retirement benefits upon reaching age 60.  However, this option was not elected by the applicant.
This document shows the applicant indicated with an "X" he elected to be discharged with entitlement to receive disability severance pay and he placed his signature on the document.

9.  Headquarters, Fitzsimons Army Medical Center, Aurora, CO, Orders
232-1, dated 10 December 1993, assigned the applicant to the U.S. Army Transition Center, Fitzsimons Army Medical Center, Aurora, CO, for the purpose of transition processing on 13 December 1993.  These orders also show the applicant was authorized severance pay in the grade of sergeant first class (SFC)/pay grade E-7, and his percentage of disability was 20 percent.

10.  The applicant's 13 December 1993 DD Form 214 shows he was honorably discharged under the provisions of Army Regulation 635-40 (Physical Evaluation for Retention, Retirement, or Separation), paragraph 4-24b(3), with a narrative reason for separation of "disability, severance pay."  At the time he had completed 3 years, 3 months, and 17 days of net active service this period;
9 years, 6 months, and 6 days of total prior active service; and 10 years,
7 months, and 9 days of total prior inactive service.  Item 18 (Remarks) shows the applicant was authorized disability severance pay in the amount of $53,935.20.

11.  A Chronological Statement of Retirement Points shows the applicant had 22 years, 11 months, and 15 days of creditable service for retired pay.

12.  An ABCMR, Memorandum of Consideration, Docket Number AC94-12217, dated 23 October 1996, shows the applicant's request for an increase in his Army disability rating from 20 percent to 30 percent was denied.

13.  Headquarters, U.S. Army Human Resources Command (USA HRC),
St. Louis, MO, Orders PO2-801730, dated 6 February 2008, show the applicant was placed on the retired list at age 60 and authorized retired pay in the grade of SFC (E-7) on 5 March 2008.



14.  Headquarters, USA HRC, St. Louis, MO, Orders PO2-801730R01, dated
11 March 2008, revoked the applicant's placement on the AUS Retired List.

15.  In connection with the processing of this case, the Army Military Pay Operations - Indianapolis, Defense Finance and Accounting Service (DFAS), Indianapolis, Indiana, was asked to verify information pertaining to the applicant's disability severance pay.  The DFAS responded that the applicant was paid disability severance pay on 13 December 1993 in the amount of $53,935.20 and $10,787.04 was withheld for Federal taxes.  There is no record that the applicant has paid any of this money back to DFAS.

16.  In support of his application, the applicant provides the following documents.

   a.  Three State of Michigan Council, State Service Representative Office, letters; two Statements in Support of VA Claim; VA Claim for Combat-Related Special Compensation; Receipt for Returned Treasury Check from the VA with a Cashier's Check, dated 30 May 2008; and VA Loan Guaranty Eligibility Center, letter.  These documents show the applicant submitted a claim for VA benefits based upon his military service.  He was rated 50% for Dysthyma, 20% for an "SP" injury of his left shoulder with arthritis of traumatic origin, and 10% for seborrheic and atopic dermatitis.  He paid the VA $15,230.00 for "pay out bal[ance] of 99K Severance"; and he was issued a Certificate of Eligibility from a VA Loan Specialist.
   
   b.  Pages 12 and 13 of Chapter 3 (Disability Compensation) from an unknown source makes reference to the National Defense Authorization Act Fiscal Year 2004 (NDAA FY04) and outlines monthly pay increases for disability ratings and the retired pay offset to be phased out over the following 9 years.

   c.  A letter, dated 6 August 2008, and three pages of hand-written notes.  The letter advised the applicant to appeal to the ABCMR and request correction of his records to show he retired from the Army and also to request forgiveness of the severance pay he received in 1993.  This document also shows the applicant was advised to "explain that you were not properly briefed concerning the ramifications of accepting severance pay (loss of all benefits from the Armed Forces)" and "that you believed that when [the] VA withheld your VA disability payments until they equaled the amount of money you received in Army severance pay, you were paying back to the Army the severance pay."
   
17.  A letter from Senator Carl Levin, United States Senate, dated 6 January 2009, states that the applicant was notified he does not qualify for retired pay due to the disability severance pay he received, he was instructed to repay the severance pay, and he issued a payment to the VA; however, he has since learned that the payment should have been made directly to the Department of the Army.  As a result, the applicant remains ineligible for retired pay.  The senator adds that the "VA has been taking steps on behalf of the Army to recoup the severance payment [the applicant] received in order for him to obtain future monetary benefits from the VA" and "it is unclear as to why his final payment to the VA is insufficient for the Army's purposes."

18.  Title 10, U.S. Code, section 1201, provides for the physical disability retirement of a member who has at least 20 years of service or a disability rated at least 30 percent.  Section 1203, provides for the physical disability separation with severance pay of a member who has less than 20 years service and a disability rated at less than 30 percent.  The member may also be eligible to apply for monthly disability compensation from the VA, if the VA determines the disability is "service-connected." 

19.  Title 10, U.S. Code, 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.  Title 10, U.S. Code, section 1213, states that, unless a person who has received disability severance pay again becomes a member of an armed force…he is not entitled to any payment from the armed force from which he was separated for, or arising out of, his service before separation, under any law administered by one of those services or for it by another of those services.  However, this section does not prohibit the payment of money to a person who has received disability severance pay, if the money was due him on the date of his separation or if a claim by him is allowed under any law.

21.  The NDAA FY04, 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.  The Department of Defense (DoD) Finance Management Regulation (FMR), Volume 7A (Military Pay Policy and Procedures - Active Duty and Reserve Pay), Chapter 35 (Separation Payments), paragraph 350406 (Recoupment from VA Compensation), provides that the VA deducts disability severance compensation from any VA compensation for the same disability to which the member or member's dependents become entitled under any law administered by the VA.  There are two exceptions:  (1) no deduction will be made in the case of disability severance pay received by a member for a disability incurred in the line of duty in a combat zone or incurred during performance of duty in combat-related operations as designated by the Secretary of Defense, and (2) no deduction will be made from any death compensation to which a member's dependents become entitled after the member's death.

23.  The DoD FMR, Volume 7B (Military Pay Policy and Procedures - Retired Pay), Chapter 10 (Correction of Records), provides that the Secretary of a Military Department, and acting through boards of civilians of the executive part of that Military Department, may correct any military record of that department when the Secretary concerned considers it necessary to correct an error or remove an injustice.  Paragraph 100202 provides that the settlement of retired pay, retainer pay, or survivor annuities due as a result of the correction of a military record must be reduced, as applicable (and in pertinent part), by prior payments of readjustment pay or disability severance pay.

DISCUSSION AND CONCLUSIONS:

1.  The applicant contends that his DD Form 214 should be corrected to show that his disability severance pay has been paid back to the Government.

2.  Records show a PEB found the applicant physically unfit and recommended a combined rating of 20 percent.  Records also show the PEB found that the applicant's separation was not based on disability from an injury or disease received in the line of duty as a direct result of armed conflict or caused by an instrumentality of war and incurred in the line of duty during a period of war as defined by law, and the disability did not result from a combat related injury.

3.  Records show the applicant elected to be discharged with entitlement to receive disability severance pay in lieu of the option of transferring to the Retired Reserve with entitlement to apply for retirement benefits upon reaching age 60.  Accordingly, the applicant was honorably discharged on 13 December 1993 with severance pay in the amount of $53,935.20.

4.  The NDAA FY04, provides that a 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.

5.  The DoD regulatory guidance shows that the settlement of retired pay due as a result of the correction of a military record must be reduced by prior payments of disability severance pay [emphasis added].

6.  Records show the applicant became eligible for retired pay on 5 March 2008.  Records also show the applicant paid the VA $15,230.00 on 30 May 2008.  It appears this was to pay the remaining balance due the VA and eliminate the monthly collections from his VA disability payments that were required to offset his Army disability severance pay.  There is no evidence this payment was for repayment of (a portion of) the disability severance pay that the applicant received from the Department of the Army.  In fact, records show DFAS has no record of the applicant having repaid any of his disability severance pay to the Army. Therefore, in view of all of the foregoing, the applicant is not entitled to correction of his records to show he repaid the disability severance pay to the Army.

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

____X__  ____X___  ____X___  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.



      _______ _   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)                                         AR20090009294



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ABCMR Record of Proceedings (cont)                                         AR20090009294



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