one-third of the stipulated amount at the time of final discharge or ultimate relief from active service; and the remaining amount of such payment shall be paid in two equal instaliments-one month and two months, respectively, from the date of the original payment. Each person eligible to receive mustering-out payment under paragraph (c) (1) (ii) of this section shall receive onehalf of the stipulated amount at the time of final discharge or ultimate relief from active service; and the remaining amount of such payment shall be paid one month from the date of the original payment. Each person eligible to receive mustering-out payment under paragraph (c) (1) (iii) of this section shall receive the stipulated amount at the time of such discharge or relief from active service.

(d) Payments to personnel discharged or relieved from active service prior to February 15, 1944. Any member of the armed forces entitled to mustering-out payment who shall have been discharged or relieved from active service under honorable conditions before the effective date of the Act of February 3, 1944, shall, if application therefor is made within two years after the date of enactment of the Act of February 3, 1944, be paid such mustering-out payment by the Navy Department beginning within one month after application has been received and approved by such department: Provided, That no member of the armed forces shall receive musteringout payment under the Act of February 3, 1944, more than once, and such payment shall accrue and the amount thereof shall be computed as of the time of discharge for the purpose of effecting a permanent separation from the service or of ultimate relief from active service.

(e) Payments to survivors. If any member of the armed forces, after his discharge or relief from active service, shall die before receiving any portion of or the full amount of his musteringout payment, the balance of the amount due him shall be payable, on appropriate application therefor, to his surviving spouse, if any; and if he shall leave no surviving spouse, then in equal shares to his child or children, if any; and if he shall leave no surviving spouse or child or children, then in equal shares to his surviving parents, if any: Provided, That no payments under the Act of

678214-46-SUPP. VIII-BK. 4

February 3, 1944, shall be made to any other person.

(f) Exemption from taxation and claims of creditors; issuance of regulations. (1) Mustering-out payments due or to become due under the Act of February 3, 1944, shall not be assignable and any payments made to or on account of a veteran hereunder shall be exempt from taxation, shall be exempt from the claims of creditors, including any claim of the United States, and shall not be subject to attachment, levy, or seizure by or under any legal or equitable process whatever either before or after receipt by the payee.

(2) The Secretary of the Navy shall make such regulations, not inconsistent with the act of February 3, 1944, as may be necessary, effectively, to carry out the provisions thereof, and the decisions of the Secretary of the Navy shall be final and not subject to review by any court or other Government official.

(3) The Secretary of the Navy, or such subordinate officer as he may designate, is authorized to make direct payment to survivors over seventeen years of age, and to select a proper person or persons to whom mustering-out payments may be made for the use and benefit of former active members of the armed forces, or survivors thereof, as defined by § 22.1 (e), without the necessity of appointment by judicial proceedings of a legal representative of any such former member or such survivors when, in the opinion of the Secretary or his designee, the interests of persons under seventeen years of age so justify, or where the former active member or his survivors is suffering from a mental disability sufficient to make direct payment not in the best interests of such person or persons. Payments made under the provisions of this subparagraph shall constitute a complete discharge of the obligation of the United States as provided in the act of February 3, 1944, as amended; and the selection of a proper person or persons, as provided herein, and the correctness of the amount due and paid to such person or persons shall have the same finality as that accorded decisions made pursuant to § 22.1 (f) (2): Provided, That the provisions of this subparagraph shall not apply where a legal guardian or committee has been judicially appointed, except as to any payments made hereunder prior to the receipt of notice of appoint

Page 3817

ment.

[Subparagraph (3) added, Aug.

22, 1945, 10 F.R. 10363]

(g) Definitions. (1) "Member of the armed forces" means any member of the Army or Navy of the United States, the United States Marine Corps, the United States Coast Guard, or any of their respective components.

(2) "Spouse" means a lawful wife or husband.

(3) "Child" includes (i) a legitimate child; (ii) a child legally adopted; and (iii) a stepchild, if, at the time of death of the member of the armed forces, such stepchild was a member of the deceased's household.

(4) "Parent" includes father and mother, stepfather and stepmother, and father and mother through adoption.

§ 22.2 Definitions and determinations-(a) Service-(1) In general. Service for which mustering-out payment may be made is based on active service only. The time required for a physical examination and for necessary compliance with orders in reporting to active duty does not constitute active service for mustering-out payment purposes except in those cases that the individual concerned has subsequently reported for active duty as ordered.

(2) Computation of length and nature of service. For the purpose of computation of the performance of active service for sixty (60) days or more and the determination of active service outside the continental limits of the United States or in Alaska, service to be taken into consideration shall be limited to service performed within the period between December 7, 1941, and the date of the termination of the present war as may hereafter be proclaimed by the President or by Congress, both dates to be inclusive. Time spent in an inactive status prior to call to active duty may not be counted in computing the length of active service. However, time lost while in an active duty status is not deducted.

(3) Service outside the continental limits of the United States. Service outside the continental limits of the United States, regardless of the period of time, shall be constituted by (i) service afloat or in the air beyond the three mile limit, including that in a travel status; (ii) service performed in a United States territory or foreign country, including Canada and Mexico, including that performed while in a travel status; (iii) however, service performed

beyond the three mile limit while in a travel status traveling from one part of a state to another part thereof for service therein shall not constitute active service outside the continental limits of the United States for the purpose of computing mustering-out payment.

(b) Discharges and releases from active duty-(1) In general. Entitlement to mustering-out payment is dependent upon a discharge for the purpose of effecting a permanent separation from the service or upon ultimate release from active duty on or after December 7, 1941, under honorable conditions.

(2) Determination of permanent separation or ultimate release. Whether or not a discharge effects a permanent separation or a release is ultimate is determinable as of the time of the separation and, unless the documents effecting the separation provide that such separation is for a specified temporary period, the separation will be considered as permanent, except that a prior separation, apparently permanent at the time of separation, will not be considered as having effected a permanent separation in the case of persons who have reentered upon active duty prior to making application for mustering-out payment.

(3) Determination of "under honorable conditions." The character of discharge or release from active duty determines whether or not a separation is "under honorable conditions." The following rules are applicable:

(i) In the case of officer personnel, all separations will be considered as being under honorable conditions except separations resulting from a dismissal by general court-martial or separations resulting from a resignation for the good of the service and to escape trial by general court-martial. Separations resulting from a resignation "for the good of the service" but not to escape trial by general court-martial are deemed to be "under honorable conditions."

(ii) In the case of enlisted personnel all separations will be considered as having been under honorable conditions except those for which an unfavorable type of discharge was given. The unfavorable types of discharge issued on and subsequent to December 7, 1941, are: (a) Navy: Discharges issued on: Forms NNav 63, NNav 63-A,' NNav 63-B1;

1 Filed as part of the original document.

Naval Reserve Forms NNav 2131 with character "undesirable,” and NNav 214 2; Form BNP 662 2; Forms NavPers 6622, NavPers 662a 2, and NavPers 662b 2; (b) Coast Guard: Discharges of a character of Undesirable, Bad Conduct, or Dishonorable; (c) Marine: Discharges of a character of Dishonorable (NAVMC 385 (b)-DP) 2; Discharges of a character of Bad Conduct (NAVMC 385-DP) 2; Discharges of a character of Undesirable (NAVMC 385 (a)-DP) 2; and Discharges of a character of Undesirable-by reason of desertion (NAVMC 385 (c)-DP) 2.

(4) Discharges or releases from active duty for specific purposes as affecting entitlement to mustering-out payment. Although otherwise entitled, no mustering-out payment is payable where the discharge or release from active service is for any of the following purposes:

(i) Discharge to accept a commission, warrant or to enlist. Personnel discharged to accept a commission or warrant or to enlist in any of the armed forces as defined in § 22.1 (g) (1).

(ii) Discharge for the purpose of entering armed forces of allied nations. Personnel discharged at their own initiative for the purpose of enlisting or accepting commissions in the armed forces of allied nations, except where such personnel have served outside the continental limits of the United States or in Alaska.

(iii) Discharge for the purpose of entering maritime service. Personnel discharged on their own initiative for the purpose of enlisting in, accepting a commission, or accepting employment with the War Shipping Administration (United States Merchant Marine Service) except where such personnel have served outside the continental limits of the United States or in Alaska.

(iv) Discharge or release for the purpose of accepting employment. Personnel discharged or released to accept employment if such separation was on their own initiative, unless the member so separated has served outside the continental limits of the United States or in Alaska. In order to deny entitlement on the basis of this provision, the primary consideration influencing the granting of the request must be the element of employment. The fact that a

1Not filed with the Division of the Federal Register.

Filed as part of the original document.

request recites that the member has been offered specific employment or that the member will return to a businss or profession in the event of separation will not, of itself, preclude entitlement. Thus, a separation for dependency will not be considered a separation to accept employment unless the matter of dependency is subsidiary to the matter of accepting employment; likewise a separation for the convenience of the Government will not be considered a separation to accept employment where the separation is granted in accordance with a specific or general "plan of demobilization." A "plan of demobilization" is considered to be any policy under which separations are granted to members of a class or group who have been specifically or inferentially invited to submit requests for separations.

(v) Discharge or release while under the minimum statutory or administrative age limit by reason of having falsely stated age in application for enlistment. Any enlisted man or member of the Women's Reserve of the Naval Reserve, Marine Corps Reserve or Coast Guard Reserve whose enlistment contract was terminated by cancelation or discharge while under the minimum statutory or administrative age limit by reason of having falsely stated his/her age in his/her application for enlistment.

(c) Members of the armed forces-(1) Definition. Members of the armed forces include members of the Navy, Coast Guard, Marine Corps, their reserve components, including women's reserve components, and members of the Nurses Corps. Temporary members of the Coast Guard Reserve and members of the Coast Guard Auxiliary are not included unless performing full-time active duty with naval pay and allowances.

(2) Eligibility. If otherwise eligible, all members of the armed forces as above defined, including Naval Reserve Aviation officers, Class A-V (N) entitled to receive a lump-sum payment on release from active duty, are eligible to receive mustering-out payment except the following:

(i) Officers receiving base pay of the fourth period and above at time of discharge. An officer receiving base pay plus longevity equivalent to the base pay of the fourth pay period is not thereby precluded.

(ii) Commissioned officers discharged from active service more than three

years after the termination of the present war.

transferred

or re

(iii) Personnel turned to the retired list with retired pay and personnel transferred to Fleet Reserve or Fleet Marine Corps Reserve or members of such reserves returned to inactive duty with retainer pay. Personnel who either receive or are entitled to receive disability benefits for serviceconnected disabilities under laws administered by the Veterans' Administration are not precluded from receiving mustering-out payment if otherwise entitled thereto. Disability benefits compensating the recipient for specific physical disability are to be distinguished from retirement pay which certain persons receive or are entitled to receive by reason of retirement for physical disability.

(iv) Personnel whose only service has been as a midshipman at the Naval Academy or as a cadet at the Coast Guard Academy or in a preparatory school after nomination as a principal, alternate or candidate for admission to such academy. Reserve midshipmen and cadets are not precluded under this provision, even though their courses of training may have been given at either of these academies.

(v) Personnel whose only service has been as a student under the college training program (Class V-12 Naval Reserve; Class III (d)-V-12 Marine Corps Reserve, while actually in college pursuing academic training). The transfer from a V-12 or III (d)-V-12 unit to a hospital as a patient and the change of duty occasioned thereby is not such additional service as will entitle a student to payment.

(vi) Personnel, Class V-5 Naval Reserve, whose only service has been in flight preparatory school and/or temporary duty under Tarmac instruction. The transfer from a flight preparatory school to a reclassification center and the change of duty occasioned thereby is not such additional service as will entitle a trainee to payment where, immediately after the transfer, the trainee exercises his opinion to be discharged. The transfer from a flight preparatory school to a hospital as a patient and the change of duty occasioned thereby is not such additional service as will entitle a student to payment.

(d) Entitlement where more than one period of service involved. The following

rules are applicable with respect to entitlement where more than one period of active service is involved:

(1) A member of the armed forces who has received mustering-out payment in an amount less than $300 as a result of the completion of one period of active service is entitled to receive additional mustering-out payment upon completion of a later period of active service, under conditions which authorize payment in an amount higher than that previously received, equal to the difference between his total entitlement for all periods of service less payments previously received, but in no event in a total amount greater than $300.

(2) Mustering-out payments will not be made to persons in active service except as indicated in paragraph (d) (3) of this section.

(3) Where an initial installment is paid to a person discharged or relieved apparently for the purpose of effecting a permanent separation from the service or ultimate relief from active service, payment of additional installments due will be made even though the person concerned reenters active service prior to receipt of all installment payments to which he is entitled.

§ 22.3 Payments to

survivors-(a)

General (1) By whom made. All mustering-out payments to survivors will be made by the Field Branch, Bureau of Supplies and Accounts (Mustering-Out Payment Division), Cleveland 15, Ohio, in case of Navy and Coast Guard personnel or the Paymaster General of the Marine Corps, Washington 25, D. C., in the case of Marine Corps personnel.

(2) Necessity for application. No mustering-out payment shall be made to any survivor without an appropriate written application therefor. The application should be filed with the Bureau of Naval Personnel, Navy Department, Washington 25, D. C., Headquarters, Coast Guard, Washington 25, D. C., or Director of Personnel, Marine Corps, Washington 25, D. C., for the respective services.

(3) Definition of "balance of amount due." The words, "balance of amount due," contained in section 4 of the act of February 3, 1944, shall be construed to mean the full sum remaining unpaid to the veteran at the time of his death, and such sum shall be payable to a qualified survivor or survivors in a lump sum and

not on an installment basis. For example, if a veteran entitled to a mustering-out payment of $300 shall die after receipt of the initial installment of $100, the sum of $200 shall be payable immediately to the qualified survivor.

(4) Payments to personal representatives not authorized. No mustering-out payment shall be made to the executor, administrator, or other person representing the veteran or any survivor, except as provided in paragraph (a) (5) of this section.

(5) Payments to guardians and committees of survivors. Where a survivor, otherwise entitled to mustering-out payment, is prevented from applying for and/or receiving such payment because of minority or mental incompetency, an application may be received from and payment made to the duly appointed guardian or committee of such survivor. All mustering-out payments to the guardians and committees of survivors will be made by the Field Branch, Bureau of Supplies and Accounts (Mustering-out Payment Division), Cleveland 15, Ohio, in the case of Navy and Coast Guard personnel, and by the Paymaster General of the Marine Corps, Washington 25, D. C., in the case of Marine Corps personnel.

[Preceding subparagraph, in small type, superseded by following subparagraph during period covered by this Supplement]

(5) To whom payable in cases of minority. Where a survivor, otherwise entitled to mustering-out payment, is a minor, payment will be made in accordance with the following rules:

(i) Where a legal guardian has been judicially appointed and notice of such appointment has been received prior to the issuance of payment, payment will be made only to the legal guardian, as such.

(ii) Where a survivor is seventeen years of age and over and no notice has been received that a legal guardian has been judicially appointed, payment will be made directly to the survivor.

(iii) Where a survivor is under seventeen years of age and no notice is received that a legal guardian has been judicially appointed, payment for the use and benefit of the survivor will be made to a person within the following classes: parent, adult brother, adult sister, other person who is determined, after appropriate investigation, to be qualified to act in the best interests of the survivor. Payment will be made in the order of precedence set forth unless it is considered that compliance therewith would

not serve the best interests of the survivor. [Subparagraph (5) amended]

(6) To whom payable in cases of mental incompetency. Where a survivor, otherwise entitled to musteringout payment is prevented from receiving payment because of mental incompetency, payment will be made in accordance with the following rules:

(i) Where a legal guardian or committee of the survivor has been judicially appointed and notice of such appointment has been received prior to the issuance of payment, payment will be made only to the legal guardian, as such.

(ii) Where no notice has been received that a legal guardian has been judically appointed, payment for the use and benefit of the survivor will be made to a person within the following classes: spouse, parent, adult child, other person who is considered, after appropriate investigation, qualified to act in the best interests of the survivor. Payment will be made in the order of precedence set forth herein unless compliance therewith would not serve the best interests of the survivor.

(7) Evidence required for payment. No payment will be made to a legally appointed guardian or committee of a survivor without submission of a certified copy of the instrument of appointment. Payments will not be made to a person selected under § 22.3 (a) (5) (iii) or § 22.3 (a) (6) (ii) without the submission of a written and signed agreement executed by the person selected to receive the payments for the use and benefit of the survivor containing a statement that the proceeds of payment will be used for the exclusive benefit of the survivor.

(8) Method of payment. All payments to survivors or to persons on their behalf will be made by checks. In the event that payments are made to a person other than the survivor, the check will be drawn to the order of (selected payee), and shall include in the lower left hand corner under "Object" the phraseology "for the use and benefit of (name of survivor)." [Subparagraphs (6), (7) and (8) added, Aug. 22, 1945, 10 F.R. 10363]

(b) Payments to a spouse. Musteringout payment shall be made to the spouse of a deceased veteran who is otherwise entitled thereto or to the duly appointed guardian or committee of such spouse,