IN THE CASE OF: BOARD DATE: 31 March 2016 DOCKET NUMBER: AR20140018211 BOARD VOTE: _________ _______ ________ GRANT FULL RELIEF ________ ________ ________ GRANT PARTIAL RELIEF ________ ________ ________ GRANT FORMAL HEARING ____X___ ____X___ ____X___ DENY APPLICATION 2 Enclosures 1. Board Determination/Recommendation 2. Evidence and Consideration IN THE CASE OF: BOARD DATE: 31 March 2016 DOCKET NUMBER: AR20140018211 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 to amend the decision of the ABCMR set forth in Docket Number AR20140008614, dated 18 June 2014. _____________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. IN THE CASE OF: BOARD DATE: 31 March 2016 DOCKET NUMBER: AR20140018211 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 reconsideration of the Board's earlier decision regarding his request to reverse the Defense Finances and Accounting Service (DFAS) decision not to waive his debt for Survivor Benefit Plan (SBP) premium payments not paid from 1 June 1995 to 30 September 1998 with accrued interest. 2. The applicant states that at the time he elected SBP when he was medically retired and placed on the Temporary Disability Retired List (TDRL) on 8 November 1990, he believes he was mentally incompetent because he suffered from schizophrenia and mental disorders, he was under psychiatric care, and he was taking numerous medications. He requests a waiver of the past-due premiums from 1 June 1995 to 30 September 1998 and accrued interest (the total of which in February 2014 was $6,877.34) because of the financial hardship on him and his family. 3. The applicant provides: * Optional Form 275 (Medical Record Report), Air Evacuation Summary, dated 5 June 1990 (previously considered in Army Board for Correction of Military Records (ABCMR) Docket Number AR20140008614 * DA Form 3647 (Inpatient Treatment Record Cover Sheet – Air Evacuation Summary), dated 5 June 1990 * Standard Form 502 (Medical Record – Narrative Summary (Clinical Resume)), dated 13 August 1990, showing his date of admission to the Walter Reed Army Medical Center (WRAMC) of 8 June 1980 (pages 2 of 6 were previously considered) * Standard Form 88 (Report of Medical Examination), dated 31 July 1990 * Department of Veteran Affairs (VA) Veterans Health Information Systems and Technology Architecture (VISTA) electronic medical documentation, progress notes, and mental health consultation, dated 20 May 2009 (4 pages) 4. The Board requested an advisory opinion from the U.S. Army Office of the Surgeon General (OTSG). The OTSG confirmed, consistent with the findings of the applicant's physical evaluation board (PEB) determination, that the applicant was separated and placed on the TDRL as a result of schizophreniform disorder. 5. The advisory opinion was forwarded to the applicant for information and to allow him the opportunity to submit comments or a rebuttal. He stated in his rebuttal that he was not briefed when he elected SBP that if he became 100-percent service-connected disabled with the VA that he would still have to pay his SBP and when he suspended retired pay to receive VA disability pay, that he had to continue to pay SBP from his VA disability pay. He requested termination of SBP on 14 September 1998 but still owed for SBP premiums from 1 June 1995 to 30 September 1998. He requested that DFAS waive the debt but DFAS denied the waiver. The applicant states he is unable to work to pay the debt and paying the debt will cause a hardship on him and his family. 6. He provided additional documents with his rebuttal, which were all previously considered by the Board. * DD Form 2656-2 (SBP Termination Request), dated 14 September 1998 * DD Form 149 for ABCMR Docket Number AR20140003804 which was administratively closed due to lack of finance records to show the applicant's SBP election and subsequent debt * DD Form 2789 (Waiver/Remission of Indebtedness Application), signed on 17 September 2013, submitted to DFAS requesting waiver of his debt for SBP annuity payments * undated VA partial document (no form number) quoting Public Law 96-402 that allows retired members to discontinue participation in the SPB plan if they are totally disabled as a result of service-connected disability, the full page form previously considered * DFAS-Cleveland Form 1741/117 (SBP Withdrawal Consent), signed on 20 August 2013 by the applicant and his spouse CONSIDERATION OF EVIDENCE: 1. Incorporated herein by reference are military records which were summarized in the previous consideration of the applicant's case by the ABCMR in Docket Number AR20140008614 on 18 June 2014. 2. The DA Form 3647, Standard Form 502, Standard Form 88, and VA VISTA electronic medical documentation provided by the applicant are new evidence which warrants consideration of his request at this time. 3. In the original ABCMR Record of Proceedings, the Board considered the following evidence in rendering its denial of the applicant's request to DFAS to waive his SBP debt. a. In August 1990, the applicant was considered by a medical evaluation board (MEB) that referred him to a PEB. The MEB proceedings stated the applicant "is mentally competent for pay purposes" and has the capacity to understand the nature of and cooperate in the PEB proceedings. The PEB rated his schiziphreniform disorder at 30-percent disabling and recommended his placement on the TDRL. He concurred and was placed on the TDRL effective 8 November 1990. b. His DFAS pay records show he elected SBP spouse coverage in connection with his retirement. c. In May 1992, the PEB recommended the applicant's permanentlretirement with a 50-percent disability rating for his schiziphreniform disorder. Accordingly, he was removed from the TDRL on 3 June 1992 and permanently retired the next day. d. The VA, through a series of decisions in 1996, 1999, and 2000, determined the applicant was 100-percent disabled. e. On 14 September 1998, the applicant submitted a request to terminate his SBP coverage with the concurrence of his spouse. f. On 28 June 2004, the VA certified the applicant was totally disabled and had been so on a continuous basis since 1 December 2003. g. On 23 July 2013, DFAS notified the applicant that an audit of his SBP account showed he owed a balance of $6,744.98 consisting of SBP premiums of $2,583.68 from 1 June 1995 to 30 September 1998 that had not been paid and interest of $4,161.30 from 1 June 1995 to 30 April 2013. h. On 6 August 2013, the VA issued a new certificate that certified that the applicant was totally disabled and had been so on a continuous basis effective 9 November 1990. i. On 10 February 2014, the applicant was notified by DFAS that a direct remittance account had been established so he could make payments by mail. His debt had a balance of $6,877.34 at the time. His request to terminate SBP was effective 1 October 1998. Just as SBP premiums are non-refundable to those who elect to terminate their SBP, because he had unpaid premiums prior to his SBP termination date, he was indebted for those premiums from 1 June 1995 to 30 September 1998. His request to cancel this debt was ineligible for waiver. The Comptroller General ruled that any payment that is legal and proper may not be considered for waiver. Non-payment of premiums is not erroneous subject to waiver. Furthermore, if he had died during the time his premiums were not remitted, his beneficiary would have received an SBP annuity minus the unpaid premiums. Accordingly, DFAS determined his debt was ineligible for waiver. 3. In case ABCMR Docket Number AR20140008614, the Board made the following determinations: a. The Board determined the applicant had properly elected spouse SBP coverage when he was placed on the TDRL. He also opted to suspend his retired pay in 1995 in order to receive VA compensation because it was greater than his retired pay. Because he elected enrollment in the SBP, a direct remittance account was established so he could easily mail his SBP premiums to DFAS. He failed to pay his SBP premiums. Even so, had he died, his spouse would have received the benefit of an SBP annuity. b. The Board determined that in September 1998, the applicant requested termination his SBP election, which became effective on 1 October 1998. However, the termination of coverage did not exempt him from paying the premiums and interest that had already accrued. Because he had unpaid premiums prior to his termination date, he was indebted for those premiums and their accrued interest which were just and proper. c. The Board determined that by law, his debt would continue to accrue interest at a rate of 6 percent. A change to the law is not within the purview of this Board. His debt was carried forward from 1 June 1995 to the present. He continued to receive SBP coverage for his spouse from 1 June 1995 to 30 September 1998 but had not paid for it. His debt is valid. He should not be allowed to gain from a military benefit without paying for it. Forgiving his debt is unjust to the thousands of veterans who receive the same SBP coverage at the same cost but faithfully pay their premiums on time. 4. The applicant provided the following new evidence: a. The DA Form 3647, dated 5 June 1990, shows that the applicant was readmitted to the hospital for 3 days for psychiatric treatment because he continued to manifest paranoid ideation and bizarre behavior. However, this predates his full medical and psychiatric evaluation conducted on 13 August 1990 at WRAMC recorded on the Standard Form 502. b. The applicant submitted page 1 of 6 of the Standard Form 502, dated 13 August 1990. Pages 2-6 were previously considered in ABCMR Docket Number AR20140008614. Page 1 adds a statement of the history of the applicant's illness showing he first came to psychiatric attention in March 1989 when he was hospitalized at Nuremburg for evaluation of paranoid thinking and suicidal ideation for a period of 2 days. At that time he was given a diagnoses of paranoid personality disorder and occupational problems, and returned to duty. However, page 6 under recommendations states, in part, "He is mentally competent, able to manage his own financial affairs and can be discharged in his own care." c. The Standard Form 88, dated 31 July 1990, given at WRAMC for the purpose of an MEB lists schizophreniform disorder which is cited as the basis for not being qualified for retention. d. VA VISTA electronic medical documentation, progress notes, and mental health consultation, dated 20 May 2009 (4 pages), shows the reason for the consultation was to obtain a letter from the VA for the applicant's service-related disability claim. A mental status examination at that time indicated he had no suicidal or homicidal ideations and did not show he was delusional or having hallucinations. His diagnosis/assessment for Axis I was paranoid schizophrenia. 5. The applicant's military records contain a DA Form 4240 (Data for Payment of Retired Personnel) which shows the applicant elected SBP coverage for his spouse and son on 1 October 1990. In accordance with Army Regulation 608-9 (SBP), his SBP election was witnessed in writing by a Department of the Army civilian employee who verified the DA Form 4240. REFERENCES: 1. Public Law 92-425, enacted 21 September 1972, established the SBP. The SBP provided military members on active duty the option to elect to have their retired pay reduced to provide for an annuity after death to surviving dependents. An election, once made, was irrevocable except in certain circumstances. This law also provides that every member having a spouse and/or child(ren), who retired/transfers to the Retired List on or after that date, is automatically covered under the SBP at the maximum rate unless he/she elected otherwise before retirement or transfer to the Retired List. 2. The official DFAS website describes the methods of paying for SBP coverage and the member elects the method that is most convenient for him or her: deductions from retired pay, deductions from VA pay, direct remittance, or paid up status (retirees who reached 70 years of age and have paid 360 monthly payments). a. The normal method of paying for SBP coverage is by automatic deduction from a retiree's retired pay. However, if a member has been ruled severely disabled by the VA and his/her VA compensation exceeds his/her military retired pay, the member does not receive retired pay from DFAS. As a result, DFAS cannot automatically deduct SBP premiums from the member's monthly pay. In this case, the best way to pay for SBP coverage is to have payments deducted from the member's VA compensation and forwarded to the DFAS Retired and Annuitant Pay by the VA. b. Direct remittance is only for those retired members who do not receive retired pay from DFAS or who do not receive enough retired pay to pay for SBP premiums. Direct remittance members who choose not to have their SBP payments deducted from their VA compensation must remit SBP premium payments directly to DFAS. Any delinquent amounts carried over into a new billing month will accrue an interest fee calculated at 6 percent of the annual percentage yield. 3. DOD Financial Management Regulation, volume 7b, chapter 45, paragraph 4507, covers delinquent SBP premiums. It states interest at the rate of 6 percent compounded annually is levied against delinquent SBP premiums. Upon the death of a retiree, any delinquency, plus interest, is collected from the annuitant's benefits before payment of any annuity. 4. Title 10, U.S. Code, section 1452(g) (Discontinuation of Participation by Participants Whose Surviving Spouses Will Be Entitled to Dependency and Indemnity Compensation), paragraph 1 (Discontinuation), states: a. Subparagraph (A) (Conditions): Notwithstanding any other provision of this subchapter but subject to paragraphs (2) and (3), a person who has elected to participate in the SBP and who is suffering from a service-connected disability rated by the Secretary of Veterans Affairs 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 such person's last discharge or release from active duty) may discontinue participation in the SBP by submitting to the Secretary concerned a request to discontinue participation in the Plan. b. Subparagraph (B) (Effective Date): Participation in the SBP of a person who submits a request under subparagraph (A) shall be discontinued effective on the first day of the first month following the month in which the request under subparagraph (A) is received by the Secretary concerned. Effective on such date, the Secretary concerned shall discontinue the reduction being made in such person's retired pay on account of participation in the SBP or, in the case of a person who has been required to make deposits in the Treasury on account of participation in the SBP, such person may discontinue making such deposits effective on such date. c. Subparagraph (C) (Form for Request for Discontinuation): Any request under this paragraph to discontinue participation in the SBP shall be in such form and shall contain such information as the Secretary concerned may require by regulation. 5. Army Regulation 608-9 in effect at the time of the applicant's discharge required that the retiring Soldier be briefed on the SBP before he/she signed the DA Form 4240 electing SBP coverage. The regulation further required that if a Soldier is not competent, the spouse must be briefed and make the SBP elections on the DA Form 4240. The regulation requires that a Department of the Army employee witness in writing on the DA Form 4240 to ensure compliance with these regulatory requirements. DISCUSSION: 1. The applicant contends, in effect, that because he was diagnosed with schizophrenia and other mental disorders and was taking medications, he was not competent when he made his SBP coverage elections on his DA Form 4240 on 1 October 1990 incident to his retirement and placement on the TDRL. However, both his Standard Form 502, dated 13 August 1990, and his MEB, dated 17 August 1990, stated that he was mentally competent for pay purposes and able to manage his financial affairs. Additionally, when he signed his DA Form 4240 on 1 October 1990, he was mentally competent or in accordance with Army Regulation 608-9 or his spouse would have been required to sign the SBP coverage elections in his place. Further, it is noted that the applicant was financially competent in 1995 to request suspension of his retired pay and elect VA disability pay which was a greater monetary benefit. 2. In his rebuttal to the OTSG advisory opinion, the applicant contended that he was not briefed at the time he elected SBP coverage that he would still have to pay for his SBP annuity if he became rated 100-percent service-connected disabled. However, this argument appears to be inappropriate since his SBP election and corresponding SBP premiums would have remained in place indefinitely had he not become rated 100-percent disabled by the VA and not otherwise have cancelled his initial SBP coverage election in accordance with the provisions of the law. 3. Based on the DFAS letter, dated 10 February 2014, when the applicant applied to DFAS in 1995 for suspension of his retired pay in order to receive VA disability pay, he was informed that DFAS had established a direct remittance account for him so he could easily pay is SBP premiums. DFAS records show he did not pay his SBP premiums from 1 June 1995 to 30 September 1998 when he then submitted a request to terminate his SBP. Additionally, DFAS records show he did not pay the interest accrued from 1 June 1995 to the present on the SPB premiums he owed. Consequently, as of the DFAS SBP debt notice dated 23 July 2013, the applicant owed $6,744.98. 4. DFAS denied the applicant's request to waive this debt stating in their 10 February 2014 letter. Although he did not pay his SBP premiums from 1 June 1995 to 30 September 1998, his spouse had the benefit of SBP coverage in the event of his death. DFAS further stated the debt was legal and proper for the benefit provided and therefore was not eligible for a waiver. 5. The evidence shows the applicant was competent to elect SBP when he retired and the debt is proper and just for the SBP benefit of coverage that the applicant's spouse would have received had the applicant died during the period 1 June 1995 to 30 September 1998. Likewise, the interest accruing on the unpaid premiums is proper and just. 6. There is no evidence of any error or injustice in this case. The applicant's debt is valid. His argument that making the SBP payments would cause him and his family a great hardship is not adequately supported. //NOTHING FOLLOWS// ABCMR Record of Proceedings AR20150000953 Enclosure 1 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS ABCMR Record of Proceedings (cont) AR20140018211 2 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS Enclosure 1 ABCMR Record of Proceedings (cont) AR20140018211 9 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS Enclosure 2