RECORD OF PROCEEDINGS

IN THE MATTER OF:	DOCKET NUMBER: BC-2020-03557

XXXXXXXXXX	COUNSEL: NONE
	
	HEARING REQUESTED: NO	

APPLICANT’S REQUEST

Defense Finance Accounting Service (DFAS) return a separation pay debt that was previously collected by the Department of Veterans Affairs (VA).

APPLICANT’S CONTENTIONS

From 1 Dec 16 to 1 Sep 18, the VA withheld his disability pay until his separation pay was recouped.  However, in 2020 DFAS withheld money from his federal tax returns.  He believes the DFAS withholding was a reissue of the previous separation pay debt that was satisfied in 2018.

The applicant’s complete submission is at Exhibit A.

STATEMENT OF FACTS

The applicant is a former Air Force senior airman (E-4).

On 4 Mar 04, according to DD Form 4, Enlistment/Reenlistment Document – Armed Forces of the United States, the applicant entered the Air Force Reserve in the Delayed Entry/Enlistment Program (DEP) for a period of 8 years.

On 15 Jun 04, according to DD Form 4, the applicant was discharged from the DEP and enlisted in the Regular Air Force for a period of 6 years.

On 5 Feb 10, according to DD Form 4, the applicant reenlisted in the Regular Air Force for a period of 5 years and 4 months.

On 31 May 13, according to the applicant’s DD Form 214, Certificate of Release or Discharge from Active Duty, the applicant was released from active duty under authority of AFI 36-3208, Non-Retention on Active Duty, with the corresponding separation code of LGH and reentry code 2X.  Block 18 indicates “Member authorized separation pay.  Final entitlement amount to be determined by DFAS upon final pay resolution.” 

On 3 Nov 16, a VA memorandum provided by the applicant indicates his VA monthly entitlement of $463.75 was withheld from 1 Dec 16 to 1 Jul 18 and a one-time withholding of $368.24 on 1 Aug 18.

On 11 Mar 20, a U.S. Department of Treasury memorandum provided by the applicant indicates DFAS withheld $5866.81 of the applicant’s tax return. 

For more information, see the excerpt of the applicant’s record at Exhibit B and the advisory at Exhibit C.

AIR FORCE EVALUATION

DFAS-Indianapolis (IN) recommends denying the application.  The applicant separated from the military 31 May 13 and received 5 percent Involuntary Separation Pay (ISP) in the amount of $12,857.65.  Since he separated with a debt, DFAS-IN performed a debt computation which revealed that he received an overpayment of a final separation payment in the amount of $20,663.29, after his date of separation. The total amount for the out-of-service debt was established for $7,365.62. The debt was eventually transferred to the Department of the Treasury Offset Program (TOP) for collection. His ISP payment of $12,857.65 was not collected back, only the overpayment of final separation pay. TOP collected the debt in full and the member was provided a “paid in full” letter.  Per DODFMR Volume 7B, Chapter 4, paragraph 040502 B. states, “A member who receives separation pay, and who also is eligible for disability compensation from Department of Veteran Affairs (VA), will have an amount, equal to the total amount of separation pay received, deducted by the VA from the disability compensation awarded.”  Since a member is not entitled to receive both ISP and VA, his disability compensation was reduced.  The member did not have his separation pay debt collected twice from two separate agencies. Only the overpayment amount of $7,365.62 that he received from DFAS was collected from TOP and the VA followed their procedures relating to receipt of both Separation Pay and VA Disability Compensation.  There is no evidence of an error or injustice.

The complete advisory opinion is at Exhibit C.

APPLICANT’S REVIEW OF AIR FORCE EVALUATION

The Board sent a copy of the advisory opinion to the applicant on 23 Aug 21 for comment (Exhibit D), but has received no response.

FINDINGS AND CONCLUSION

1.  The application was timely filed.

2.  The applicant exhausted all available non-judicial relief before applying to the Board.

3.  After reviewing all Exhibits, the Board concludes the applicant is not the victim of an error or injustice.  The Board concurs with the rationale and recommendation of DFAS-IN and finds a preponderance of the evidence does not substantiate the applicant’s contentions.  The member did not have his separation pay debt collected twice from two separate agencies. Only the overpayment amount he received from DFAS was collected from TOP and the VA followed their procedures relating to receipt of both Separation Pay and VA Disability Compensation.  Therefore, the Board recommends against correcting the applicant’s records.

RECOMMENDATION

The Board recommends informing the applicant the evidence did not demonstrate material error or injustice, and the Board will reconsider the application only upon receipt of relevant evidence not already presented.

CERTIFICATION

The following quorum of the Board, as defined in Air Force Instruction (AFI) 36-2603, Air Force Board for Correction of Military Records (AFBCMR), paragraph 1.5, considered Docket Number BC-2020-03557 in Executive Session on 14 Sep 21 and 24 Sep 21. 

, Panel Chair
, Panel Member
, Panel Member

All members voted against correcting the record.  The panel considered the following:

Exhibit A:	Application, DD Form 149, w/atchs, dated 20 Oct 20.
Exhibit B:	Documentary evidence, including relevant excerpts from official records.
Exhibit C:	Advisory Opinion, DFAS-IN, w/atchs, dated 20 Aug 21.
Exhibit D:	Notification of Advisory, SAF/MRBC to Applicant, dated 23 Aug 21.

Taken together with all Exhibits, this document constitutes the true and complete Record of Proceedings, as required by AFI 36-2603, paragraph 4.11.9.