IN THE CASE OF:	  

		BOARD DATE:  19 July 2012

		DOCKET NUMBER:  AR20110021668 


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, in effect, correction of her records to show she was transferred to the Retired Reserve with eligibility for retired pay at age 60 instead of discharged due to disability with severance pay.

2.  She states she received her Notification of Eligibility for Retired Pay at Age 60 (20-year letter) while undergoing the medical review board process and she subsequently requested transfer to the Retired Reserve.  However, she believes she is entitled to retirement pay based upon completion of 30 years of service.

3.  She provides:

* Notification of Eligibility for Retired Pay at Age 60, dated 28 April 2004
* DD Form 214 (Certificate of Release or Discharge from Active Duty)
* DA Form 1506 (Statement of Service for Computation of Length of Service for Pay Purposes)
* Department of Veterans Affairs (VA) claim decision, dated 21 February 2008

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 records show her date of birth as 4 July 1955.  She enlisted in the Army National Guard (ARNG) on 23 March 1976 and served in a variety of positions in the ARNG, Regular Army, and U.S. Army Reserve (USAR).

3.  On 28 April 2004, while serving on active duty as a member of the USAR Active Guard Reserve (AGR) Program, she was notified of her eligibility for retired pay upon application at age 60 via a 20-year letter.

4.  On an unspecified date, she was referred to the Physical Disability Evaluation System.  Her physical evaluation board (PEB) proceedings are not contained in the available records.  However, U.S. Army Human Resources Command, St. Louis, MO, Orders D-06-690113, dated 21 June 2006, show she was discharged from the USAR AGR, effective 30 August 2006.  These orders also show she was authorized disability severance pay based on a 20-percent disability rating and 30 years, 5 months, and 8 days of service.

5.  Her DD Form 214 shows she was honorably discharged from active duty on 30 August 2006 due to physical disability with severance pay in the amount of $90,499.20.

6.  A letter from the VA, dated 21 February 2008, stated her claim for disability compensation had been approved for a total monthly rate of $901.00 effective 1 September 2007 (subsequently increased to $921.00 effective 1 December 2007).  The letter further stated the award was subject to recoupment of $90,499.20 ($67,874.40 after taxes, which was the disability severance pay she received).  As a result, a prorated amount of $676.00 would be withheld monthly until the full amount of severance pay has been recovered beginning on 1 September 2007 (subsequently increased to $691.00 effective 1 December 2007).

7.  The applicant's ARPC Form 249-E (Chronological Statement of Retirement Points), dated 23 November 2011, shows she had 27 years and 1 month of qualifying service for retirement as of 30 August 2006.

8.  During the processing of this case an advisory opinion was rendered by the Chief, Operations Management Division (OMD), U.S. Army Human Resources Command, Fort Knox, KY.  After a thorough review of the applicant's request, the Chief, OMD, opined that she could have been transferred to the Retired Reserve. The Chief, OMD, noted the applicant initially non-concurred with the PEB results, but reconsidered and subsequently was paid $90,499.20 in disability severance pay.  The applicant has already begun remittance of her severance payment.  If the applicant is transferred to the Retired Reserve, she will continue to repay the severance payment until the unpaid balance is recouped.  She will receive retirement benefits thereafter.

9.  A copy of the advisory opinion was provided to the applicant for comment or rebuttal.  She did not respond.

10.  Army Regulation 635-40 (Physical Evaluation for Retention, Retirement, or Separation) states PEB's are established to evaluate all cases of physical disability equitability for the Soldier and the Army.  

11.  Army Regulation 635-40 states that when a Soldier has a rating of less than 30 percent and has at least 20 qualifying years for retirement for non-Regular service, "You have the option of accepting discharge with disability severance pay and forfeiting retirement for non-Regular service or you may request transfer to the Retired Reserve and receive retired pay at age 60.  According to Title 10, U.S. Code, sections 1209 and 1213, you will forfeit all rights to retired pay if you accept severance pay instead of transfer to the Retired Reserve."

12.  Army Regulation 635-40 states the findings and recommendations of the informal PEB are recorded on a DA Form 199 (PEB Proceedings).  Appendix D provides instructions for completing this form.  The Soldier will complete item 13 (Election of Member) by placing a checkmark in the appropriate item indicating his or her elections after the informal findings and recommendations and sign and date the form.  The legal counsel or PEB Liaison Officer (PEBLO) who informs the Soldier of the PEB's findings and recommendations and her available options will sign item 14 (Counselor's Statement).

13.  Army Regulation 635-40 states the PEBLO will counsel each Soldier throughout physical disability processing.  Counseling will be based on the individual circumstances of each case and will be designed to serve the Soldier's best interest.  The PEBLO must reassure the Soldier that counseling will continue as needed as the case progresses within the disability system.  Soldiers should be encouraged to ask questions during case processing.  All Soldiers should be advised of benefits and training provided by the VA, Department of Labor, and Social Security Administration.

14.  A service member discharged with severance pay cannot be transferred to the Retired Reserve.  A member cannot be retired from a discharge with severance pay status. 

15.  Army Regulation 635-5-1 (Separation Program Designators (SPD) Code), the version in effect at the time, stated the SPD code of "MFR" would be used when the reason for separation was involuntary discharge due to "Physical disability - other."  

16.  The SPD code of "MFR" was to be utilized for service members who qualify for physical disability with severance pay and qualify for retirement at age 60 and elect to receive Reserve Retirement in lieu of severance pay.  

17.  When the SPD code of "MFR" is utilized the statement "The Soldier has been separated by reason of physical disability and has selected Reserve Retirement In-Lieu of Severance:  No Severance Pay is Authorized" will be entered in item 18 (Remarks) on the DD Form 214.

18.  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.

19.  Public Law 95-397, the RCSBP, enacted 30 September 1978, provided a way for those who qualified for Reserve retirement but were not yet age 60 to provide an annuity for their survivors should they die before reaching age 60.  Three options are available:  (A) elect to decline enrollment and choose at age 60 whether to start SBP participation, (B) elect that a beneficiary receive an annuity if they die before age 60 but delay payment of it until the date of the member's 60th birthday, and (C) elect that a beneficiary receive an annuity immediately upon their death if before age 60.  If death does not occur before age 60, the RCSBP costs for options B and C are deducted from the member's retired pay.  Once a member elects either options B or C in any category of coverage, that election is irrevocable.  Option B and C participants do not make a new SBP election at age 60.  They cannot cancel SBP participation or change options they had in RCSBP – it automatically converts to SBP coverage.  If RCSBP option B or C is elected, there is a Reservist portion cost added to the basic cost of the SBP to cover the additional benefit and assured protection had the member died prior to age 60.

DISCUSSION AND CONCLUSIONS:

1.  The evidence of record shows the applicant was mailed her 20-year letter on 28 April 2004.  By law, members of the Reserve Components who complete at least 20 years of qualifying service are eligible to receive retired pay upon application at age 60.

2.  Although the applicant's PEB proceedings were not available for review, her discharge orders verify she was authorized disability severance pay based on a 20-percent disability rating and 30 years, 5 months, and 8 days of service.

3.  The evidence of record confirms that her processing through the Army's Physical Disability Evaluation System ultimately led to her discharge from active duty by reason of physical disability with severance pay on 30 August 2006 as evidenced by her DD Form 214.  The record further shows she applied for and received disability payments through the VA that were applied towards recoupment of the $90,499.20 she received in severance pay.  Repayment of this debt to the U.S. Government continues.

4.  The evidence of record confirms she was originally eligible to elect non-regular retirement instead of separation with severance pay at the time of disability separation in 2006.  It appears she may not have fully understood her options and/or been given the opportunity to elect retired pay in lieu of disability severance pay.

5.  In view of the foregoing, it would be appropriate and serve the interest of justice and equity to correct her record by voiding her 30 August 2006 disability discharge with severance pay and showing she was transferred to the Retired Reserve on that same date.

6.  Further, she should continue to repay the disability severance pay until the entire amount is recouped.

7.  Whichever RCSBP election, if any, she made upon receipt of her 20-year letter in 2004 remains valid.

8.  In view of the foregoing, the applicant's record should be corrected to show she elected Reserve Retirement in lieu of severance pay as follows:

	a.  correcting her DD Form 214 and/or any related documents to show she was separated due to physical disability - other with an SPD code of "MFR";

	b.  adding to item 18 on her DD Form 214 the statement "The Soldier has been separated by reason of physical disability and selected Reserve Retirement In-lieu of Severance: No Severance Pay is Authorized";

	c.  showing she was transferred to the Retired Reserve with entitlement to retired pay as of the date of her 60th birthday, 4 July 2015; and

	d.  having DFAS fully audit the applicant's pay records, coordinating with the VA, to determine any monetary amount 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.

BOARD VOTE:

___X ___  ___X____  ___X  ___  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The Board determined the evidence presented is 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.  correcting her DD Form 214 for the period ending 30 August 2006 and/or any related documents to show she was separated due to physical disability - other with an SPD code of "MFR";

	b.  adding to item 18 on the DD Form 214 for the period ending 30 August 2006 the statement "The Soldier has been separated by reason of physical disability and has selected Reserve Retirement In-Lieu of Severance:  No Severance Pay is Authorized";

	c.  showing she was transferred to the Retired Reserve with entitlement to retired pay as of the date of her 60th birthday, 4 July 2015; and

	d.  having DFAS fully audit the applicant's pay records, coordinating with the VA, to determine any 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 repayment of the remaining disability severance pay.


      __________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)                                         AR20110021668



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ABCMR Record of Proceedings (cont)                                         AR20110021668



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