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Pay & Leave Claim Decisions

Washington, DC

U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code

Christopher D. Moore
Department of the Army
Wiesbaden, Germany
LQA (inclusion of POQ addition cost)

Robert D. Hendler
Classification and Pay Claims Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance



The claimant is a Federal civilian employee of the Department of the Army in Wiesbaden, Germany.  He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial of his request to adjust the amount of living quarters allowance (LQA) he was granted to include the costs of construction on his personally owned quarters (POQ).  We received the request from the claimant on August 8, 2013, and the agency administrative report (AAR) on April 30, 2014.  For the reasons discussed herein, the claim is denied.

The record shows the claimant had an annex constructed to a building in which his spouse owned an apartment.  In November 2011, he submitted a request to his agency for LQA in the total of € (Euro) 334,201, which included €110,000 for purchase price of the home and €224,201 for expenditures to construct the annex.  The agency subsequently denied the claimant’s request, instead setting his LQA at €110,000 for the original purchase price of the home.

The Department of State Standardized Regulations (DSSR) set forth the basic criteria for the granting and payment of LQA.  There is no dispute the claimant is eligible for LQA under DSSR Section 031.11, wherein LQA may be granted to employees recruited in the United States by the employing agency.  Within the scope of these regulations, the head of an agency may issue further implementing instructions for the guidance of the agency with regard to the granting of and accounting for these payments.  Thus, Department of Defense Instruction (DoDI) 1400.25-V1250 implements the provisions of the DSSR, but may not exceed their scope; i.e., extend benefits that are not otherwise permitted by the DSSR.  However, the claimant believes neither Section 136 of the DSSR, providing for LQA to eligible employees with POQ, nor the agency’s supplemental instructions preclude the agency from including expenditures to construct the annex in his LQA computation.

In its AAR to OPM, the agency explains the circumstances of the claim:

Initially, [the claimant] occupied rental quarters; however, he then decided to build an annex to the house in which [the claimant’s] spouse owned an apartment that she purchased in 2003, essentially linking the apartment to an existing structure.  When in November 2011 [the claimant] submitted his claim for costs associated with the apartment in the amount of €110,000.00 and more importantly, documents to show the expenditures for building the annex in the amount of €234,201.00, to request reimbursement for a total of €334,201.00 for [POQ] under the provisions of the DSSR Section 136, we were unable to authorize the total amount.  [The claimant] and his spouse requested an exception to policy to authorize the entire costs of the enlarged POQ as he only acted on the advice of staff at his then servicing civilian personnel advisory center, that an addition or reconstruction of an existing building would be permissible and the costs associated with the reconstruction could be subsumed under LQA.  We did not authorize an exception to policy.

In its April 5, 2012, response to the claimant’s request for an exception to policy[1], the agency explains the decision to reject expenditures associated with the annex from his LQA computation.  The response states:

The DSSR Section 136 in connection with guidance issued by the Department of Defense (DoD), cited at [DoDI 1400.25 - V1250], permit the purchase and/or construction of personally owned quarters for which eligible employees may submit claims to be reimbursed under LQA up to 10 percent of the purchase price, not exceeding the maximum allowable LQA rate of the post of assignment.  However, additions or renovations after quarters have already been constructed or previously purchased cannot be considered as part of the original purchase price.  As such, we are unable to authorize the additional €234,201.00 to be reimbursed by LQA and merely grant €110,000.00 or $127,985.00 plus €3,540.00 for estimated utility costs.

The claimant disagrees with the agency’s rationale, stating in a February 13, 2013, letter to OPM:

There is no question under existing rules as to whether this allowance covers the construction of new housing…it does; nor is there a question about whether this allowance covers the renovation of an existing structure…it does not.  But the new construction was not a renovation, it was an addition, and this was the matter that we sought clarification on initially and we were told that an addition was covered.

Section 136(a) of the DSSR provides for LQA to eligible employees to assist in defraying the costs of official residence expenses in the overseas area, stating:

When quarters occupied by an employee are owned by the employee or the spouse, or both, or by the employee or the domestic partner, or both, an amount up to 10 percent of original purchase price (converted to U.S. dollars at original exchange rate) of such quarters shall be considered the annual rate of his/her estimated expenses for rent.  Only the expenses for heat, light, fuel, (including gas and electricity), water, garbage and trash disposal and in rare cases land rent, may be added to determine the amount of the employee’s quarters allowance in accordance with Section 134.

Supplementing DSSR Section 136(a), DoDI 1400.25-V1250 dated June 26, 2006, and in effect when the claimant submitted his request for reimbursement, provides the following relevant instruction:

The annual rent payable for personally-owned quarters is based on the purchase price or appraised value of the property, converted to U.S. dollars at the exchange rate in effect at the time of purchase.

In its description of calculating LQA when employees occupy quarters owned by the employee or spouse, the DSSR makes clear that an amount up to 10 percent of the original purchase price of the quarters can be considered the annual rate of expenses for rent.  There is no provision in the DSSR to include any subsequent costs incurred, like that in the claimant’s situation, to an LQA computation.  Payments of money from the Federal Treasury are limited to those specifically authorized by statute or its implementing regulations.  In an August 1, 2013, letter to OPM, the claimant states, in part:

The DSSR section 131.1 by definition states:  “Living Quarters Allowance”, hereinafter referred to as LQA, means a quarters allowance granted to an employee for the annual cost of suitable, adequate, living quarters for the employee and his/her family.  What we had before we did the addition was neither suitable nor adequate for my family.

The claimant seeks relief based on consideration of costs for “suitable, adequate, living quarters” under DSSR Section 131.1.  However, these provisions do not negate the clear and unambiguous language of DSSR Section 136(a) establishing limits to the amount of POQ granted.  As his situation relates to a POQ, DSSR Section 136(a) must be considered when computing the claimant’s LQA.  The construction costs incurred to build the annex, as they were not part of the overall monetary outlay for the purchase price of the home, may not from a regulatory standpoint be considered covered expenses.  In this case, the agency granted the claimant the maximum annual amount of LQA allowable under DSSR Section 136(a); i.e., 10 percent of the original purchase price of the property.

The claimant asserts the inadequacy of LQA rates for his location in comparison to other areas.  However, LQA rates are set by the Department of State for Government civilian employees assigned to foreign locations.  The claims jurisdiction of OPM under 31 U.S.C. 3702 is limited to consideration of the statutory and regulatory merits of the individual compensation or leave claims before us.  It does not extend to consideration of the fairness or adequacy of LQA rates at the request of individual claimants.  Therefore, the claimant’s assertion has no applicability to our claim settlement determination.

DoDI 1400.25-V1250 specifies that overseas allowances are not automatic salary supplements, nor are they entitlements.  The statutory and regulatory languages are permissive and give agency heads considerable discretion in determining whether to grant LQAs to agency employees.  Wesley L. Goecker, 58 Comp. Gen. 738 (1979).  Under section 178.105 of title 5, Code of Federal Regulations, the burden is upon the claimant to establish the liability of the United States and the claimant’s right to payment.  Joseph P. Carrigan, 60 Comp. Gen. 243, 247 (1981); Wesley L. Goecker, 58 Comp. Gen. 738 (1979).  Since an agency decision made in accordance with established regulations as is evident in the present case cannot be considered arbitrary, capricious, or unreasonable, there is no basis upon which to reverse the decision.

It is well settled by the courts that a claim may not be granted based on misinformation provided by agency officials.  Payments of money from the Federal Treasury are limited to those authorized by statute, and erroneous advice given by a Government employee cannot bar the Government from denying benefits not otherwise permitted by law.  See OPM v. Richmond, 496 U.S. 414, 425-426 (1990); Falso V. OPM, 116 F.3d 459 (Fed.Cir. 1997); and 60 Comp. Gen. 417 (1981).  Therefore, that the claimant was initially told by an agency official that he would be reimbursed for total costs associated with construction to an existing structure does not confer eligibility not otherwise permitted by statute or its implementing regulations.

This settlement is final.  No further administrative review is available within OPM.  Nothing in this settlement limits the claimant’s right to bring an action in an appropriate United States court.


[1] The claimant’s request that the agency grant an exception to policy is misplaced.  DSSR Section 031.12c provides the agency head with authority to waive DSSR Section 031.12b provisions establishing eligibility for LQA when there are “unusual circumstances.”  Waiver authority under DSSR Section 031.12c is immaterial to the circumstances of this claim as there is no provision in regulation to waive or grant an exception to DSSR Section 136a which establishes limits to the amount of POQ reimbursement that may be granted. 

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