PROCEEDINGS

	IN THE CASE OF:  

	BOARD DATE:           28 November 2000                   
	DOCKET NUMBER:   AR2000040876

	I certify that hereinafter is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in the case of the above-named individual.  

	Mr. Carl W. S. Chun		Director	
	Mrs. Nancy Amos		Analyst	

  The following members, a quorum, were present:

	Ms. Margaret K. Patterson		Chairperson	
	Mr. John H. Kern		Member	
	Mr. Wilfred A. Hale, Jr.		Member	

	The applicant and counsel if any, did not appear before the Board.

	The Board considered the following evidence:

	Exhibit A - Application for correction of military 
                records
	Exhibit B - Military Personnel Records (including
	            advisory opinion, if any)

FINDINGS:

1.  The applicant has exhausted or the Board has waived the requirement for exhaustion of all administrative remedies afforded by existing law or regulations.

2.  The applicant requests that his records be corrected to either show he never enrolled in the Survivor Benefit Plan (SBP) or that he disenrolled in December 1975 5 years after being retired at a 100 percent disability rating or in December 1980 10 years after being awarded a VA disability rating of 100 percent.

3.  The applicant states that in 1998 the VA awarded him a 100 percent disability rating retroactive to 3 December 1971.  Had they properly rated him at the time he retired, he would not have enrolled in the SBP when it was initially offered as he met the criteria for payment of Dependency Indemnity Compensation (DIC) which would have been/will be a higher benefit for his widow.

4.  The applicant’s military records show that after having had prior enlisted service, he was commissioned out of Officer Candidate School and entered active duty on 5 August 1968.  He was assigned to Vietnam on 24 February 1969.  He was severely injured in a mortar attack and, on 3 December 1970, he was placed on the Retired List with a disability rating of 90 percent.  

5.  The VA apparently initially rated the applicant at 100 percent disability but reduced it to 80 percent after one year.

6.  The Army Retirement Services Office has verified that the applicant enrolled in the SBP on 21 September 1972 for spouse coverage, reduced amount.

7.  On 27 August 1998, the VA acknowledged an error in its original 1971 rating decision and changed its rating to 100 percent, service connected due to multiple shell fragment wounds, effective 3 December 1971.

8.  On 19 July 1999, the applicant, with his spouse’s concurrence, requested withdrawal from the SBP.  On 10 August 1999, the Defense Finance and Accounting Service informed the applicant his withdrawal was effective 1 August 1999 under the provisions of Public Law 96-402.

9.  Public Law 92-245, the SBP, enacted 21 September 1972, provided that military members on active duty could elect to have their retired pay reduced to provide for an annuity after death to surviving dependents.  It declared a          12-month Open Season for those members who retired prior to enactment of the law.

10.  Public Law 96-402, enacted 9 October 1980 but effective 1 December 1980, established a withdrawal clause for members rated totally disabled by the VA.

11.  Title 10, U. S. Code, section 1452(g)(1) provides that a person who has elected to participate in the SBP and who is suffering from a service-connected disability rated by the VA as totally disabling and has suffered from such disability 

while so rated for a continuous period of 10 or more years (or, if so rated for a lesser period, has suffered from such disability while so rated for a continuous period of not less than 5 years from the date of last discharge) may discontinue participation in the Plan.  Discontinuance is effective on the first day of the first month following the month in which the request is received.  Participation may not be discontinued without the written consent of the beneficiary or beneficiaries of the person.

12.  Title 10, U. S. Code, section 1450(e)(1) provides that if an SBP annuity is not payable because the DIC payment is greater, then any amount deducted from the retired pay of the deceased member shall be refunded to the surviving spouse or former spouse.

13.  Title 38, U. S. Code, section 1311(a) provides that DIC shall be paid to a surviving spouse at the monthly rate of $850.00.  The rate shall be increased by $185.00 in the case of a veteran who at the time of death was entitled to receive compensation for a service-connected disability that was rated totally disabling for a continuous period of at least eight years immediately preceding death.  Only periods in which the veteran was married to the surviving spouse shall be considered.

CONCLUSIONS:

1.  The Board concludes that an injustice has occurred in this case.

2.  The applicant was retired by the Army on 3 December 1970 with a 90 percent disability rating.  After initially awarding him a 100 percent disability rating, the VA reevaluated its decision one year later and changed its rating to 80 percent.  However, in 1998 the VA acknowledged its 1971 decision was in error and awarded him a 100 percent disability rating retroactive to 3 December 1971.

3.  The Board agrees with the applicant’s contention that had the VA made the correct rating decision in 1971 he would not have enrolled in the SBP.  His spouse would have been eligible for DIC and she could not receive SBP if her DIC payment equaled or exceeded the SBP annuity. 

4.  In addition, the way the law is now written the applicant’s widow will receive a full refund of the SBP premiums anyway once she begins to collect DIC.  Presumably the applicant and his spouse can better use the premiums now rather than after his death.  

5.  In view of the foregoing, the applicant’s records should be corrected as recommended below.

RECOMMENDATION:

1.  That all of the Department of the Army records related to this case be corrected by showing that the applicant declined to enroll in the SBP on            21 September 1972.

2.  That the applicant be refunded all SBP premiums paid into the program as a result of the above correction.

BOARD VOTE:  

__mkp___  __jhk___  __wah___  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

			Margaret K. Patterson
		______________________
		        CHAIRPERSON

INDEX

CASE ID	AR2000040876	
SUFFIX		
RECON		
DATE BOARDED	20001128	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	(GRANT)	
REVIEW AUTHORITY		
ISSUES         1.	137.04	
2.		
3.		
4.		
5.		
6.