Chief Hospital Corpsman, William R. Brown, USN

B-270349 Dec 17, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights A Navy member was separated due to physical disability and was paid severance pay. Is waived pursuant to 10 U.S.C. Whether VA compensation payments also may be begun is a matter within VA's jurisdiction to decide. DECISION This is in response to the request of Chief Hospital Corpsman. For waiver of a debt for repayment of disability severance pay which arose when the Board for Correction of Naval Records (Board) corrected his records to state that he was retired from the United States Navy rather than separated due to a physical disability. His waiver request is granted for the net amount of his debt. Chief Brown was medically discharged with a 20 percent disability rating and thereupon received $45. View Decision Matter of: Chief Hospital Corpsman, William R. Brown, USN (Ret.)--Waiver Request File: B-270349 Date: December 17, 1996 A Navy member was separated due to physical disability and was paid severance pay. The Board for Correction of Naval Records later corrected his record to show that he had been placed on the Temporary Disability Retired List rather than separated. The Department of Veterans Affairs (VA) awarded the member VA compensation, but has withheld payment setting off such amounts against the separation pay under 10 U.S.C. Sec. 1212, which requires repayment of the amount of disability severance pay if the member becomes entitled to VA compensation for the same disability. The correction board's action entitled the member to retired pay but also rendered the disability severance pay payment erroneous and subject to collection, but also subject to consideration for waiver. Considering the purpose of the correction board action and to prevent the inequity of placing him in debt in the new status, the net amount of the member's debt, after deduction for retroactive retired pay entitlements, is waived pursuant to 10 U.S.C. Sec. 2774. Whether VA compensation payments also may be begun is a matter within VA's jurisdiction to decide. DECISION This is in response to the request of Chief Hospital Corpsman, William R. Brown, USN (Retired), for waiver of a debt for repayment of disability severance pay which arose when the Board for Correction of Naval Records (Board) corrected his records to state that he was retired from the United States Navy rather than separated due to a physical disability. His waiver request is granted for the net amount of his debt. BACKGROUND On July 17, 1992, Chief Brown was medically discharged with a 20 percent disability rating and thereupon received $45,525.60 in disability severance pay. Subsequently, he applied to the Board for Correction of his record to indicate that he was retired rather than discharged. The Board corrected his record to show that his name was placed on the Temporary Disability Retired List as of July 18, 1992, with a disability rating of 30 percent. As of that date, Chief Brown became entitled to retired pay to be paid by the Defense Finance and Accounting Service (DFAS). Apparently concurrently, the Department of Veterans Affairs (VA) found him eligible for monthly disability compensation which he was entitled to receive upon filing a waiver with DFAS for an equivalent amount of retired pay. [1] However, since his record had been corrected to show that he had been retired rather than separated as of July 18, 1992, he also became indebted to the United States for the amount of disability severance pay he had received. To compute his net indebtedness, DFAS set off Chief Brown's retired pay entitlements for constructive time on the Temporary Disability Retired List from his disability severance pay to reach a net debt of $20,475.24. Both VA and DFAS have been withholding the entire monthly amount payable to Chief Brown in order to satisfy the debt, and he has requested waiver. DFAS denied Chief Brown's request on the grounds that when he requested the record correction, he was aware that he would be required to repay the disability severance pay and that therefore collection would not be against equity and good conscience. He has appealed, arguing that he was not aware that his entire monthly entitlement would be withheld until the severance pay was collected. ANALYSIS Under 10 U.S.C. Sec. 1212, a member with less than 20 years of service who is separated with a disability under 10 U.S.C. Sec. 1203 may be entitled to disability severance pay. However, the disability severance pay must be deducted from any other compensation due under a law administered by VA to which he becomes entitled based on the same disability. 10 U.S.C. Sec. 1212(c). See also 41 Comp.Gen. 597 (1962). Under 10 U.S.C. Sec. 1552, the Secretary of a military department, acting through a civilian board, may correct a military record if he considers it necessary to correct an error or remove an injustice.