IN THE CASE OF:  	  

		BOARD DATE:  14 May 2015	  

		DOCKET NUMBER:  AR20140016409 


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, that the remaining portion of separation pay he received in 1988 not be recouped.

2.  The applicant states:

     a.  Under Department of Defense (DOD) Financial Regulation Volume 7a, chapter 35, all separation pay upon involuntary separation discharge must be repaid.  His separation pay was $30,000 and not $40,000.  The total amount of his debt should be adjusted to $30,000. 

      b.  He is 62 years old and receiving unemployment benefits.  He has paid approximately $20,000 of the $30,000 debt.  He is requesting the remaining $10,000 be waived due to his unemployment.  He was informed that even though the Defense and Accounting Service (DFAS) discovered the error they did not have the authority to direct a correction.

3.  The applicant provides pay vouchers, a letter from DFAS, and a letter from the Commonwealth of Virginia. 

CONSIDERATION OF EVIDENCE:

1.  The applicant was appointed as a U.S. Army Reserve (USAR) second lieutenant and he executed an oath of office on 12 March 1977.  On that same date he entered the Regular Army.   

2.  On 1 September 1988, he was released from active duty in the rank of captain and transferred to the USAR for "failure of selection for permanent promotion."

3.  A pay voucher shows he was awarded $30,000 in severance pay on              2 September 1988.

4.  He was appointed a captain in the USAR on 1 January 1990 and he served honorably in an active Reserve status, attaining the rank of major.

5.  On 16 April 1997, he received a Notification of Eligibility for Retired Pay at Age 60 (Twenty Year Letter).

6.  He was transferred to the Retired Reserve on 23 August 2012.  

7.  In August 2012, upon attaining age 60, he applied for and began receiving retired pay.

8.  In a letter, dated 14 January 2013, DFAS notified Senator Casey in reply to his inquiry on behalf of the applicant that:

     a.  In accordance with Title 10, U.S. Code, Section 1174(h), all members who receive separation pay and later become eligible for retired pay shall have an amount deducted from their monthly retired pay until the gross amount of the separation pay is recovered.  Their records reflected that he retired on                23 August 2013.

     b.  They established a recoupment on his military retired pay account on      31 August 2012 based on the information on the DD Form 2656 (Data for Payment of Retired Personnel) that he signed on 22 February 2012.  On that form he indicated he had received separation pay in the amount of $40,000.

     c.  In his latest communication with Senator Casey, he stated that he was involuntarily separated and he should be exempt from recoupment.  Separation pay upon involuntary discharge or release from active duty is covered under Title 10, U.S. Code, Section 1174, and they were required by that law to recoup separation pay as directed by that law and by the DOD Financial Management Regulation, Volume 7a, chapter 35.   
    
     d.  On 19 December 2013, they contacted the Department of the Army to obtain verification of whether or not he was discharged.  They were notified that he was discharged from the U.S. Army on 2 September 1988 and he was issued a separation payment in the gross amount of $30,000.  A copy of the pay voucher detailing the separation pay was enclosed.
     e.  Based on receipt of the pay voucher they corrected the gross amount of his separation pay to be recouped from $40,000 to $30,000.  The first recoupment payment was to be withheld from his retired pay on                          31 December 2012.  After that deduction the remaining balance would be $29,036.40.  Recoupment deduction would continue until the balance was recouped in full.  

     f.  The monthly recoupment deduction was 40 percent of his gross military retired pay.  He could request a lower recoupment deduction at any time if he believed the 40 percent recoupment rate would be a financial hardship; however, he stated that he did not wish to file for financial hardship at that time.

     g.  He could petition the ABCMR to review his separation pay recoupment.  They did not have the authority to change his military retired pay account without authorization from the ABCMR.  They previously sent him a DD Form 149 (Application for Correction of Military Record) and they included another form with this letter.

9.  Title 10, U.S. Code, Section 1174 states that a regular officer who is discharged and has completed six or more, but less than twenty years of active service immediately before that discharge is entitled to separation pay.  However, a member who has received separation pay, severance pay, or readjustment pay under any provision of law, based on service in the armed forces, and who later qualifies for retired or retainer pay shall have deducted from each payment of such retired or retainer pay so much of such pay as is based on the service for which they received separation pay under this section or separation pay, severance pay, or readjustment pay under any other provision of law until the total amount deducted is equal to the total amount of separation pay, severance pay, and readjustment pay received.

10.  Army Regulation 600-4 (Remission or Cancellation of Indebtedness) outlines the policies and guidance for remission or cancellation of indebtedness to the U.S. Army.  The objectives of remission or cancellation of debt are to remit or cancel debts to the U.S. Army that are considered to be unjust or to end hardship or undue suffering.  Chapter 1 states, in part, that indebtedness to the U.S. Army may not be remitted or canceled when the debt is incurred when the Soldier is not in an active duty status.

11.  Army Regulation 15–185 (Army Board for Correction of Military Records) prescribes the policies and procedures for correction of military records by the Secretary of the Army, acting through the Army Board for Correction of Military Records (ABCMR) to direct or recommend changes in military records to correct the error or injustice, if persuaded that material error or injustice exists and that sufficient evidence exists on the record.  The ABCMR begins its consideration of each case with the presumption of administrative regularity.  The applicant has the burden of proving an error or injustice by a preponderance of the evidence.

DISCUSSION AND CONCLUSIONS:

1.  In regards to the applicant’s request that his debt be adjusted to $30,000; it appears that DFAS has corrected the gross amount of separation pay to be recouped from $40,000 to $30,000.  Therefore, there is no correction needed in this regard.  

2.  In regards to waiving the remaining balance of his debt due to his unemployment status, he has not shown the debt to be unjust or that remission of the remaining debt would end a hardship or undue suffering.  Further, the governing regulation does not provide for cancelling debts to the U.S. Army if the debts were incurred while not serving on active duty.  His debts were incurred as a result of his retirement.

3.  Based on the available evidence no material error or an injustice occurred, the actions by DFAS to recoup his separation pay from his retired pay is appropriate based on the law.

4.  In view of the foregoing, there is no basis for granting the applicant's request.

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)                                         AR20140016409





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ABCMR Record of Proceedings (cont)                                         AR20140016409



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