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Pay & Leave Claim Decisions

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Office of the General Counsel

Matter of: [XXX]
Date: [XXX]
File Number: S9700047

OPM Contact: Jo-Ann Chabot

A former federal employee filed a claim for a Living Quarters Allowance (LQA) and a Cost of Living Allowance (COLA). The claim is denied for the reasons stated below.

During 1978, a federal agency recruited the claimant for employment overseas. She received a Living Quarters Allowance (LQA) as well as a Cost of Living Allowance (COLA) from her employer. Ten years later, while the claimant still worked overseas for the same employer, she married a citizen of the country where she resided. During February 1993, the claimant resigned from her first position because she discovered that she was going to be transferred to Washington, D.C. She said in this regard that she did not wish to accept the transfer and she did not wish to return to the United States at that time.

In February 1993, the claimant accepted other employment with a second federal agency.

Although the claimant did not receive an LQA from the second agency, she received a COLA until May 1995. The claimant's second employer terminated her COLA on the basis of its findings that she was not eligible for the allowance because: (1) the claimant had not been recruited in the United States; and (2) the claimant's family ties and other personal reasons, rather than her employment, were the primary reasons for her residing overseas. The claimant requested her second employer to reinstate the COLA and to grant her an LQA, but her employer denied the request. It appears from the record that the claimant's employer waived its right to recover the COLA payments that it already had made to her. The claimant thereafter left federal employment and is residing in the United States with her spouse.

The Overseas Differentials and Allowances Act, Pub. L. 86-707, 74 Stat. 793, 794 (Sept. 6, 1960), as amended and codified at 5 U.S.C.  5922-5924, provides that, in accordance with regulations prescribed by the President, LQAs and COLAs "may" be paid to Federal employees in foreign areas. The President, by executive order, delegated this authority to the Secretary of State who issued Standardized Regulations concerning eligibility to receive and payment of LQAs and COLAs. Section 013 of the Department of State Standardized Regulations (DSSR) further delegates to the heads of federal agencies the authority to grant LQAs and COLAs to agency employees, and section 031.1 provides that LQAs "may" be granted to employees. Both the statutory and regulatory language are permissive and, therefore, give agency heads considerable discretion in determining whether to grant LQAs and COLAs to agency employees. In view of this discretion, an agency's decision to deny an LQA or COLA to one of its employees may not be overturned unless the decision was arbitrary, capricious, or unreasonable in light of the facts. Barbara E. Meyer-Wendt, B-160107 (Oct 7, 1966).

Section 031.12a of the DSSR further provides with regard to employees, such as the claimant, who were recruited outside the United States:

The employee's actual place of residence in the place to which the quarters allowance applies at the time of receipt thereof shall be fairly attributable to his/her employment by the United States Government.

According to the claimant, she resigned from her first position in February 1993 because she did not want to transfer to Washington, D.C. and she did not wish to return to the United States at that time. Moreover, the claimant had married a citizen of the country in which she was residing. In view of this, it was reasonable for the claimant's second employer to conclude that, when the claimant resigned from her first position, her residence overseas became attributable to personal reasons rather than to her employment by the United States Government.

Under sections 031.2 and 031.3 of the DSSR, the claimant's eligibility for an overseas COLA such as a post allowance flows from her eligibility for an LQA. Because the claimant was not eligible to receive an LQA during her employment with the second federal agency, she also was not eligible to receive a COLA during that time.

Accordingly, the claimant's requests for an LQA and COLA are denied.

Control Panel