IN THE CASE OF:	  

		BOARD DATE:	  12 April 2011

		DOCKET NUMBER:  AR20100018053 


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 reimbursement of the portion of her enlistment bonus that was recouped by the Defense Finance and Accounting Service (DFAS).

2.  She states she sought medical treatment through the Department of Veterans Affairs (VA) for some medical issues which stemmed from active duty service.  VA determined her conditions were service-connected and assigned her a 70 percent (%) disability rating percentage.  As a result of her illness, she was found to be medically unfit for continued service in the U.S. Army Reserve (USAR).

3.  She provides:

* a letter sent to her by the Directorate of Debt and Claims Management, DFAS, Indianapolis, IN on 30 March 2010
* her service-connected compensation decision rendered by the VA Regional Office located in Roanoke, VA

CONSIDERATION OF EVIDENCE:

1.  On 11 August 2006, having prior active duty service in the Regular Army, the applicant enlisted in the USAR for a period of 6 years.

2.  Her record contains a Certificate and Acknowledgement, USAR Service Requirements and Methods of Fulfillment (Reserves Annex), dated 11 August 2006.  Section IV (Service Obligation) of this document shows she enlisted under 

the Prior Service Bonus Program for military occupational specialty (MOS) 92F (Petroleum Supply Specialist) which entitled her to an enlistment bonus of $15,000.

3.  Her record contains a DA Form 5261-5 (Selected Reserve Incentive Program - USAR Prior Service Enlistment Bonus Addendum), dated 11 August 2006.  This document contains the following pertinent information:

	a.  Section III (Acknowledgement), item 4, shows she was qualified in MOS 92F which was approved as a bonus MOS and correlated to the position vacancy for which she was enlisting.

	b.  Section V (Entitlement), item 1, shows she was enlisting for a period of 6 years for a bonus of $15,000.00 with an initial payment of 50% at time of enlistment and payments of 25% at the end of her second and fourth year of satisfactory service in a USAR Selected Reserve Unit.

	c.  Section VII (Termination) shows the reasons for which her entitlement to the prior service enlistment bonus would be terminated.  Item 4d provides recoupment action would not occur in the event she was separated from enlisted status as a result of death, injury, illness, or other impairment not the result of her own misconduct.

4.  Her record contains a DA Form 3349 (Physical Profile), dated 22 March 2007, which shows she was issued a permanent, level 3, physical profile for her lower extremities due to the following medical conditions:  chronic shin splints, abdominal pain, and severe foot callus.

5.  The complete facts and circumstances surrounding her separation are not contained in the available records; however, her record contains Headquarters, 99th Regional Support Command, Fort Dix, NJ, Orders 08-350-00004, dated
15 December 2008.  These orders show that on 14 January 2009, she was honorably discharged from the USAR in accordance with Army Regulation
40-501 (Standards of Medical Fitness.), chapter 3, as a result of being found medically unfit for retention.

6.  She provides a letter sent to her by the Directorate of Debt and Claims Management, DFAS, Indianapolis, IN on 30 March 2010 in response to her request for a hearing under the provisions of Title 31 U.S. Code, subsection 3720D (Garnishment) and Title 31, Code of Federal Regulations, subsection 285.11 (Administrative wage garnishment).  This letter shows a Hearing Official informed her that a review of her records showed she enlisted on 11 August 

2006 for a period of 72 months [6 years] with entitlement to a bonus in the amount of $15,000.00.  She was discharged from the USAR on 14 January 2009. As of the date of her discharge, she was paid $7,500.00 of the total bonus.  She failed to serve 43 months of her obligation and recoupment of the unearned portion of the bonus amount of $1,458.33 was required.

7.  The Hearing Official informed her that the Department of Defense Financial Management Regulation (DODFMR) does seek recoupment of bonuses in some instances of medical disqualification and it is not within the purview of an administrative hearing to research or determine the type of medical disqualification she incurred.  As a result, her debt was referred to the Defense Debt Management System (DDMS) and the Treasury Offset Program for collection against her Internal Revenue Service (IRS) income tax refund.  The IRS charges a fee for each offset from a tax refund.  DDMS received a net amount of $1502.29 to apply to her debt, which paid it in full as follows:

$1,458.33			Principal
	  14.96		Interest
	  45.00		Administrative Fees
(1,502.29)		IRS offset, dated 12 March 2010
	(16.00)		DDMS write off amount
$	   0.00

8.  The Hearing Official concluded that based on the facts surrounding the case, the appropriate actions were taken in accordance with the Debt Collection Improvement Act of 1996.  It was determined she was provided more than the allowable time to make arrangements to repay the debt prior to the IRS offset collection.

9.  She provides her service-connected compensation decision rendered by the VA Regional Office located in Roanoke, VA.  This document shows VA determined the following conditions were related to her military service and granted service-connection for the following conditions at the disability percentages as shown below.  This document also shows that her separation pay was recouped as a result of being granted a monthly financial entitlement from VA.

	a.  Post traumatic stress disorder with major depressive disorder (also claimed as sexual assault, depression, and traumatic stress); 50%

	b.  Irritable bowel syndrome and diverticulosis with gastroesophageal reflux disease (GERD) status post fundoplication with normal healed surgical scar, 

abdomen (also claimed as GERD and abdominal pain from tubal ligation, irritable bowel syndrome, diverticulosis, and GERD and abdominal pain due to sexual trauma); 30%.

10.  In the processing of this case, on 17 December 2010, an advisory opinion was obtained from Chief, Incentives and Budget Branch, Enlisted Accessions Division, Office of the Deputy Chief of Staff, G-1, Washington, DC.  The advisory official noted the applicant was separated for medical reasons and stated recoupment of bonuses are required in most cases when a member is separated prior to completion of the period of service for which the bonus was paid.  Exceptions exist in cases involving death or injury in a combat zone.  All other cases involving medical-related separations which are not a result of misconduct require a determination on whether to recoup the bonus or not.  Commanders have the discretion to recommend cancellation of debt in cases of equity and good conscience.

11.  The advisory official stated that based on available information, there is no record that any requests to either recoup or cancel her debt was made by her command.  She sought debt relief from DFAS, but DFAS advised her to pursue the action with the Army Board for Correction of Military Records.  The advisory official recommended granting her request and cancelling the bonus-related debt based on her medical condition at the time of separation and honorable discharge.

12.  The advisory opinion was forwarded to the applicant for information and to allow her the opportunity to submit comments or a rebuttal.  On 28 December 2010, she concurred with the advisory opinion.

13.  Title 31, U.S. Code, subsection 3720D provides, in pertinent part, that notwithstanding any provision of State law, the head of an executive, judicial, or legislative agency that administers a program that gives rise to a delinquent nontax debt owed to the United States by an individual may, in accordance with this section, garnish the disposable pay of the individual to collect the amount owed, if the individual is not currently making required repayment in accordance with any agreement between the agency head and the individual.  The individual shall be provided written notice, sent by mail to the individual’s last known address, a minimum of 30 days prior to the initiation of proceedings, from the head of the executive, judicial, or legislative agency, informing the individual of:

	a.  the nature and amount of the debt to be collected; 

	b.  the intention of the agency to initiate proceedings to collect the debt through deductions from pay; and
	c.  an explanation of the rights of the individual under this section.

14.  Title 31, U.S. Code, subsection 3720D also provides, in pertinent part, that the individual shall be provided an opportunity to inspect and copy records relating to the debt.  The individual shall be provided an opportunity to enter into a written agreement with the executive, judicial, or legislative agency, under terms agreeable to the head of the agency, to establish a schedule for repayment of the debt.  The individual shall be provided an opportunity for a hearing in accordance with subsection (c) on the determination of the head of the executive, judicial, or legislative agency concerning:

	a.  the existence or the amount of the debt, and 

	b.  in the case of an individual whose repayment schedule is established other than by a written agreement pursuant to paragraph (4), the terms of the repayment schedule.

15.  Title 31, U.S. Code, subsection 3720D further provides, in pertinent part, a hearing under subsection (b)(5) shall be provided prior to issuance of a garnishment order if the individual, on or before the 15th day following the mailing of the notice described in subsection (b)(2), and in accordance with such procedures as the head of the executive, judicial, or legislative agency may prescribe, files a petition requesting such a hearing.  If the individual does not file a petition requesting a hearing prior to such date, the head of the agency shall provide the individual a hearing under subsection (a)(5)[1] upon request, but such hearing need not be provided prior to issuance of a garnishment order.  The hearing official shall issue a final decision at the earliest practicable date, but not later than 60 days after the filing of the petition requesting the hearing.

16.  Title 31, Code of Federal Regulations, subsection 285.11 provides procedures for Federal agencies to collect money from a debtor's disposable pay by means of administrative wage garnishment to satisfy delinquent nontax debt owed to the United States.  This section applies to any Federal agency that administers a program that gives rise to a delinquent nontax debt owed to the United States and to any agency that pursues recovery of such debt.  This section shall apply notwithstanding any provision of State law.  Nothing in this section precludes the compromise of a debt or the suspension or termination of collection action in accordance with applicable law.

17.  Chapter 9, Volume 7A of the DODFMR provides that recoupment of the unearned portion of an enlistment bonus is not required for enlisted members 

who are discharged prior to completion of the term of service for which the bonus was paid due to injury, illness, or other impairment not the result of their own misconduct.

DISCUSSION AND CONCLUSIONS:

1.  The applicant's request for reimbursement of the portion of her enlistment bonus that was recouped by DFAS was carefully considered and determined to have merit.

2.  Evidence shows she enlisted on 11 August 2006 for a period of 6 years for a bonus of $15,000.00 with an initial payment of 50% at the time of enlistment and payments of 25% at the end of her second and fourth year of satisfactory service in a USAR Selected Reserve Unit.

3.  On 14 January 2009, she was honorably discharged from the USAR as a result of being found medically unfit for retention in accordance with Army Regulation 40-501, chapter 3.

4.  As a result of her discharge prior to completing her contracted period of enlistment, DFAS recouped a portion of her enlistment bonus in the amount of $1,458.33.

5.  The DODFMR and Army policy provide for the cancellation of bonus-related debts when a member is separated prior to completion of the period of service for which the bonus was paid in cases involving medical-related separations which are not a result of misconduct.  Commanders have the discretion to recommend cancellation of debt in cases of equity and good conscience.

6.  In view of her medical conditions at the time of separation, the fact she received an honorable discharge, and in the interest of equity it would be appropriate to cancel her bonus-related debt and reimburse the portion of her bonus recouped by DFAS.

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 Department of the Army records of the individual concerned be corrected by:

	a.  showing she was approved for retention of her enlistment bonus at the time of her honorable discharge as a result of being found medically unfit for retention;

	b.  voiding any indebtedness and recoupment actions related to the applicant's enlistment bonus; and

	c.  refunding to her any monies due as a result of the above correction.



      ___________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)                                         AR20100018053



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ABCMR Record of Proceedings (cont)                                         AR20100018053



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