BOARD DATE: 10 April 2020 DOCKET NUMBER: AR20180015403 APPLICANT REQUESTS: physical disability retirement in lieu of physical disability discharge APPLICANT'S SUPPORTING DOCUMENTS CONSIDERED BY THE BOARD: * DD Form 149 (Application for Correction of Military Record) * Commander’s memorandum, dated 10 April 1997 * Headquarters, U.S. Army Signal Center and Fort Gordon Orders 085-0919, dated 26 March 1998 * DD Form 214 (Certificate of Release or Discharge from Active Duty), with a through date of 27 April 1998 * self-authored letter to the Internal Revenue Service, dated 17 May 1998 * VA Rating Decision, dated 3 June 2003 * Department of Veterans Affairs (VA) letter, dated 17 June 2003 FACTS: 1. The applicant did not file within the three year time frame provided in Title 10, United States Code, section 1552(b); however, the ABCMR conducted a substantive review of this case and determined it is in the interest of justice to excuse the applicant's failure to timely file. 2. The applicant states his discharge due to physical disability should be changed to physical disability retirement. Upon separation, he was awarded severance pay in the amount of $24,931.20. His disability was categorized as tax free under Title 26, U.S. Code 104 (b)(2); however the Defense Finance and Accounting Service withheld 28 percent taxes. Since 1 July 2003, the VA has recouped the full gross amount of his severance pay plus 28 percent taxes. Therefore, he is requesting a change from discharge to retirement. 3. The applicant enlisted in the Regular Army on 26 June 1990 and was awarded the military occupational specialty (MOS) 12B (Combat Engineer). 4. He served in Southwest Asia from 24 October 1990 through 15 April 1991. 5. The complete facts and circumstances surrounding the applicant’s physical disability discharge with severance pay are not in his available records for review. 6. A memorandum from his company commander, dated 10 April 1997, addressed to the MOS Medical Retention Board states: a. The applicant performs his duties in a satisfactory manner. His last Army Physical Fitness Test (APFT) was administered in October 1995 and he scored 211. His last weapons qualification on the M9 was conducted on 27 November 1996 and he qualified as Sharpshooter. b. The applicant cannot perform in his MOS, 12B because of his knee condition. He cannot climb on and off the tracked vehicles, which is a routine part of his job. Mounting and dismounting vehicles aggravates his knee condition as does running during physical training. Continued service in the Army could cause permanent damage to his knee. Based on these facts, he recommended the applicant’s referral to the Army’s Physical Disability System. 7. A DA Form 2166-7 (Noncommissioned Officer (NCO) Evaluation Report), covering the period from July 1996 through June 1997, states the applicant was issued a physical profile in March 1997 that prohibited him from taking the APFT. It also states his physical profile did not interfere with his ability to perform his assigned duties. 8. His military records contain a memorandum, dated 6 February 1998, which shows the Eisenhower Army Medical Center, Fort Gordon, GA, approved a request for the applicant’s retention in the Army until he was eligible for separation or reenlistment, presumably while he was undergoing medical evaluation for retention or separation. 9. Headquarters, U.S. Army Signal Center and Fort Gordon Orders 085-0919, dated 26 March 1998, reassigned the applicant to the U.S. Army Transition Point at Fort Gordon, GA, effective 27 April 1998. a. The orders state the applicant was authorized severance pay in the rank/grade of sergeant/E-5 based on 7 years, 10 months, and 2 days of service, with a 20 percent disability rating. b. The orders also state the disability is not based on injury or disease received in the Line of Duty (LOD) as a direct result of armed conflict or caused by an instrumentality of war and incurred in the LOD during a war period as defined by law. His disability did not result from a combat-related injury as defined in Title 26, U.S. Code, section 104. 9. His DD Form 214 shows he was honorably discharged on 27 April 1998, under the provisions of Army Regulation 635-40 (Physical Evaluation for Retention, Retirement, or Separation), due to disability with severance pay, after 7 years, 10 months, and 2 days of net active service. 10. The applicant composed a letter to the IRS, dated 17 May 1998, stating he was medically discharged from the Army on 27 April 1998 and was awarded severance pay in the amount of $24,931.20. His disability was categorized as tax-free under Title 26, U.S. Code, section 104, but DFAS withheld 28 percent in taxes. 11. A VA Rating Decision, dated 3 June 2003 shows the applicant was granted the following service-connected disability ratings: * 10 percent for pseudofolliculits barbae (razor bumps) effective 6 February 2003 * 10 percent for retropatellar pain left knee, with osteochondritis dissecans (joint pain) * 10 percent for retropatellar pain right knee, with osteochondritis dissecans 12. In a VA letter to the applicant, dated 17 June 2003, he was informed why some benefits were withheld. It stated he received disability severance pay of $24,931.20 from the Army for his bilateral knee condition, with each knee rated as 10 percent disabling. The VA must hold back any VA compensation for which he received severance pay until it has been fully recouped. 13. The Army Review Board Agency (ARBA) Medical Advisor reviewed the supporting documents and the applicant's records in iPERMS, the Armed Forces Health Longitudinal Technology Application (AHLTA), Health Artifacts Image Management Solutions (HAIMS) and the VA's Joint Legacy Viewer (JLV) and made the following findings and recommendations: The applicant is requesting a change in discharge type from severance pay to retirement. The 10 April 1997 letter from Command indicated the applicant couldn’t perform as a 12B Combat Engineer because his knee condition prevented him from climbing on and off vehicles; and running during physical training because these activities aggravated his knee condition. Based on that, the recommendation was for referral to the Army’s Physical Disability System with eventual evaluation by an MOS/Medical Retention Board (MMRB). The memo did not mention any other conditions that impacted performance. The 26 March 1998 Orders 085-0919 showed percentage of disability rating at 20%. The 03 Jun 2003 Department of VA Rating Decision shows service connection for the following conditions with effective date 04/28/1998: * Retropatellar Pain Right Knee with Osteochondritis Dissecans 10% * Retropatellar Pain Left Knee with Osteochondritis Dissecans 10% * Small Sliding Hiatal Hernia with Minimal Reflux 10% * Pseudofolliculitis Barbae 0% (10% from 02/06/2003) The VA rating Decision evaluator describes knee flexion to 120 degrees and extension to 0 degrees (normal range for both), no instability, and normal x-rays on the current exam and a 10 percent evaluation was continued because there was documentation of painful or limited motion of a major joint or group of minor joints. And finally, the Rating Decision indicates the applicant received disability severance pay from the Army for the bilateral knee condition (each knee rated at 10%). There were no medical records in AHLTA for review. JLV search did not reveal any detailed knee exams with range of motion measurements proximate to the time of the applicant’s discharge; however, it did show that 23 June 1998 right knee and left knee x-rays were normal; a 15 Sep 1998 Discharge Summary for right facial infection mentioned a past medical history of bilateral knee fractures; and a 16 Jan 2001 Internal Medicine note showed past surgical history of knee cartilage repair in 1996. Based on available information for review, the bilateral knee condition DID NOT meet retention standards. However, no medical evidence was presented or found in the record review which supported that the disability rating percentage for the bilateral knee condition was in error. In addition, there was no medical evidence which supported that the other service connected VA rated disabilities (Small Sliding Hiatal Hernia with Minimal Reflux and Pseudofolliculitis Barbae) failed retention standards. Therefore a referral to the Army DES for consideration of medical retirement is not indicated at this time. BOARD DISCUSSION: After reviewing the application, all supporting documents, and the evidence found within the military record, the Board found that relief was not warranted. The applicant’s contentions, the military record, an advisory opinion, and regulatory guidance were carefully considered. Evidence of record shows no medical evidence was presented or found in the record review which supported that the disability rating percentage for the bilateral knee condition was in error. The Board concurred with the medical advisory opinion finding there was no medical evidence which supported that the other service connected VA rated disabilities failed retention standards. The Board concluded there was insufficient evidence of an error or injustice which would warrant a change in the narrative reason for separation. BOARD VOTE: Mbr 1 Mbr 2 Mbr 3 : : : 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 the overall merits of this case are insufficient as a basis for correction of the records of the individual concerned. 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. REFERENCES: 1. Title 10, United States Code, section 1552(b), provides that applications for correction of military records must be filed within 3 years after discovery of the alleged error or injustice. This provision of law also allows the ABCMR to excuse an applicant's failure to timely file within the 3 year statute of limitations if the Army Board for Correction of Military Records (ABCMR) determines it would be in the interest of justice to do so. 2. Title 10, U.S. Code, chapter 61, provides the Secretaries of the Military Departments with authority to retire or discharge a member if they find the member unfit to perform military duties because of physical disability. The U.S. Army Physical Disability Agency is responsible for administering the Army physical disability evaluation system and executes Secretary of the Army decision-making authority as directed by Congress in chapter 61 and in accordance with DOD Directive 1332.18 and Army Regulation 635-40 (Physical Evaluation for Retention, Retirement, or Separation). a. Soldiers are referred to the disability system when they no longer meet medical retention standards in accordance with Army Regulation 40-501 (Standards of Medical Fitness), chapter 3, as evidenced in an MEB; when they receive a permanent medical profile rating of 3 or 4 in any factor and are referred by an MOS Medical Retention Board; and/or they are command-referred for a fitness-for-duty medical examination. b. The disability evaluation assessment process involves two distinct stages: the MEB and PEB. The purpose of the MEB is to determine whether the service member's injury or illness is severe enough to compromise his/her ability to return to full duty based on the job specialty designation of the branch of service. A PEB is an administrative body possessing the authority to determine whether or not a service member is fit for duty. A designation of "unfit for duty" is required before an individual can be separated from the military because of an injury or medical condition. Service members who are determined to be unfit for duty due to disability either are separated from the military or are permanently retired, depending on the severity of the disability and length of military service. Individuals who are "separated" receive a one-time severance payment, while veterans who retire based upon disability receive monthly military retired pay and have access to all other benefits afforded to military retirees. c. The mere presence of a medical impairment does not in and of itself justify a finding of unfitness. In each case, it is necessary to compare the nature and degree of physical disability present with the requirements of the duties the Soldier may reasonably be expected to perform because of his or her office, grade, rank, or rating. Reasonable performance of the preponderance of duties will invariably result in a finding of fitness for continued duty. A Soldier is physically unfit when a medical impairment prevents reasonable performance of the duties required of the Soldier's office, grade, rank, or rating. 3. Army Regulation 635-40 establishes the Army Disability Evaluation System and sets forth policies, responsibilities, and procedures that apply in determining whether a Soldier is unfit because of physical disability to reasonably perform the duties of his office, grade, rank, or rating. Only the unfitting conditions or defects and those which contribute to unfitness will be considered in arriving at the rated degree of incapacity warranting retirement or separation for disability. a. Paragraph 3-2 states disability compensation is not an entitlement acquired by reason of service-incurred illness or injury; rather, it is provided to Soldiers whose service is interrupted and who can no longer continue to reasonably perform because of a physical disability incurred or aggravated in military service. b. Paragraph 3-4 states Soldiers who sustain or aggravate physically-unfitting disabilities must meet the following line-of-duty criteria to be eligible to receive retirement and severance pay benefits: (1) The disability must have been incurred or aggravated while the Soldier was entitled to basic pay or as the proximate cause of performing active duty or inactive duty training. (2) The disability must not have resulted from the Soldier's intentional misconduct or willful neglect and must not have been incurred during a period of unauthorized absence. 4. Title 10, U.S. Code, section 1201, provides for the physical disability retirement of a member who has at least 20 years of service or a disability rating of at least 30 percent. Title 10, U.S. Code, section 1203, provides for the physical disability separation of a member who has less than 20 years of service and a disability rating of less than 30 percent. 5. Title 38, U.S. Code, sections 1110 and 1131, permits the VA to award compensation for disabilities that were incurred in or aggravated by active military service. However, an award of a higher VA rating does not establish error or injustice on the part of the Army. The Army rates only conditions determined to be physically unfitting at the time of discharge which disqualify the Soldier from further military service. The VA does not have the authority or responsibility for determining physical fitness for military service. The VA awards disability ratings to veterans for service-connected conditions, including those conditions detected after discharge, to compensate the individual for loss of civilian employability. These two government agencies operate under different policies. Unlike the Army, the VA can evaluate a veteran throughout his or her lifetime, adjusting the percentage of disability based upon that agency's examinations and findings. 6. Title 26, U.S. Code, section 104 pertains to compensation for injuries or sickness. It states, except in the case of amounts attributable to (and not in excess of deductions allowed in section 213 (relating to medical expenses) for any prior taxable year, gross income does not include, among other categories: a. amounts received as a pension, annuity, or similar allowance for personal injuries or sickness resulting from active service in the Armed Forces fo any country or in the Coast and Geodetic Survey or the Public Health Service, or as a disability annuity payable under the provisions of the Foreign Service Act of 1980 or b. amounts received by an individual as disability income attributable to injuries incurred as a direct result of terroristic or military action. 7. Concurrent receipt refers to the simultaneous receipt of two forms of Federal monetary benefits, military retired pay and VA disability compensation. Prior to 1 January 2004, the law dictated that a military retiree could not receive two payments from Federal agencies for the same purpose. As a result, military retirees with disabilities recognized by the VA would have their military retired pay offset or reduced dollar for dollar by the amount of their non-taxable VA compensation. a. Public Law 107-314, enacted in the National Defense Authorization Act for Fiscal Year 2003, introduced Combat Related Special Compensation (CRSC) Pay. CRSC provided for certain disabled retirees whose disability is combat-related, a cash benefit financially identical to what concurrent receipt would provide and is not taxable. b. Since then, Congress added Concurrent Retirement and Disability Pay (CRDP) to that legislation, which allows military retirees to receive both military retired pay and VA compensation without an offset, previously prohibited until 1 January 2004. Individuals are not entitled to receipt of both CRSC and CRDP and if an individual qualifies for both, in the initial year of joint eligibility, DFAS will automatically apply the entitlement that is most beneficial to the individual, after which the individual will make his/her own election at the next Open Season. Like regular retired pay and disability severance pay that is not combat-related, CRDP is taxable, according to the individual’s current Federal Income Tax Withholding tax rate. Effective 2014, to be eligible for CRDP a Soldier must meet one of the following eligibility criteria: * you are a regular retiree with a VA disability rating of 50 percent or greater * you are a Reserve retiree with 20 qualifying years of service with a VA disability rating of 50 percent or greater and who has reached retirement age * you are retired under the Temporary Early Retirement Act (TERS) and have a VA disability rating of 50 percent or greater * you are a physical disability retiree who earned entitlement to retired pay under any provision of law other than solely by disability and have a VA disability rating of 50 percent or greater c. Disability Severance Pay is taxable or subject to Federal Income Tax withholding except for those individuals meeting the following criteria: * you have a combat-related injury or illness as determined by your military service at separation that resulted directly from armed conflict, or took place while you were engaged in extra-hazardous service, took place under conditions simulating war, or was caused by an instrumentality of war * you are receiving VA disability compensation 9. 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 ABCMR. 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. //NOTHING FOLLOWS// ABCMR Record of Proceedings (cont) AR20180015403 9 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS 1