Washington, DC

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

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


11/30/2016

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Date

The claimant was a Federal civilian employee of the Department of the Air Force (AF) in Okinawa, Japan.  He requests the U.S. Office of Personnel Management (OPM) reconsider his agency's denial of living quarters allowance (LQA).  We received the claim request on December 17, 2015, and the agency administrative report on January 13, 2016.  For the reasons discussed herein, the claim is denied. 

The claimant applied, was selected for, and accepted the AF position in Okinawa, Japan, which was advertised for the period July 27, 2015, to July 31, 2015, while residing in New Zealand, where he was studying abroad.  On August 5, 2015, the claimant was referred on the certificate of eligibles for the position.  On August 25, 2015, he was extended a tentative job offer.  On November 5, 2015, he received a firm job offer with an entrance on duty (EOD) date of November 16, 2015.  Upon EOD, the claimant completed a Questionnaire for Overseas Benefits Determination and on November 24, 2015, he was notified that he was not eligible to receive LQA or Temporary Quarters Subsistence Allowance (TQSA) based on the information provided on the questionnaire.  Specifically, a memo provided to the claimant by the Kadena Civilian Personnel Officer, noted the claimant did not meet the definition of U.S. hire since he was not physically present in the U.S. from time he applied for the position until and including the date he accepted the job offer.  The record shows the claimant resigned during the initial appointment probationary period effective December 31, 2015. 

Regarding the claimant’s ineligibility for LQA, the agency states in its AAR:

Based on Mr. Castro’s physical residence in New Zealand from the time of application to firm job offer, in accordance with DSSR 031.11 and DODI 1400.25 Vol 1250, the Air Force has determined that Mr. Castro is ineligible for Living Quarters Allowance (24 Nov 15 Memo provided by employee) and believes his claim should be denied. 

The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas.  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.  DoDI 1400.25, Volume 1250, dated February 23, 2012, in effect when the claimant was appointed, implement the provisions of the DSSR for DoD employees.  Because LQA is a discretionary allowance, agency implementing regulations may be more restrictive, but not more permissive, than the DSSR; i.e., they may impose additional limitations on the granting of LQA but may not extend benefits that are not otherwise permitted by the DSSR.  Therefore, an LQA applicant must fully meet relevant provisions of the DSSR before the supplemental requirements of the DoDI or other agency implementing guidance may be applied. 

DSSR section 031.11 states LQA may be granted to employees recruited in the United States: 

Quarters allowances prescribed in Chapter 100 may be granted to employees who were recruited by the employing government agency in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, and the possessions of the United States. 

Relative to these criteria, DoDI 1400.25, Volume 1250, defines “U.S. Hire” as follows:

U.S. Hire.  A person who physically resided permanently in the United States or the Northern Mariana Islands, from the time he or she applied for employment until and including the date he or she accepted a formal offer of employment. 

Thus, an employee’s status as a “U.S. hire” is based on permanent physical residency at the time of recruitment for the position in question. 

The claimant appears to characterize himself as a U.S. hire, asserting eligibility under DSSR section 031.11.  He states the following:

I retired as a U.S. Army Major on 01 July 2014 and I returned to Hawaii (my home state) to pursue a 2^nd B.A. degree in Linguistics at the University of Hawaii Hilo.  As part of UH Hilo’s Study Abroad Program I was given the opportunity to study abroad in New Zealand from July-November 2015.  Since my stay in New Zealand was only a temporary condition (akin to a long vacation) and I always maintained my residency in Hawaii, I believe I do qualify as a ‘Stateside Hire.” And I should be receiving LQA benefits. 

However, the plain language of the term “resided in the United States” clearly connotes physical residency in the United States during the entire recruitment process per the definition of “U.S. hire” in DoDI 1400.25, Volume 1250; i.e., from when he initially applied for through the time he accepted the position in question.  This language does not allow for a more expansive interpretation such as a “permanent residence” or “home of record” in the United States.  Therefore, whether an employee is deemed to be recruited in the United States or outside the United States is dependent on the actual physical residency of the employee when recruited, not the existence of a legal or “permanent” residence at some other place other than where the employee is actually residing at that time.  Therefore, the claimant's physical residency in New Zealand throughout the recruitment process disqualifies him from consideration as a "U.S. hire" under DSSR section 031.11 or its implementing regulations in DoDI 1400.25, Volume 1250.).  

Since the claimant was recruited outside the United States, we address whether he meets LQA eligibility requirements within the context of 031.12.[1]  DSSR section 031.12 states, in relevant part, that LQA may be granted to employees recruited outside the United States under the following circumstances:

a. 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; and

b. prior to appointment, the employee was recruited in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States, by:

(1) the United States Government, including its Armed Forces;

(2) a United States firm, organization, or interest;

(3) an international organization in which the United States Government participates; or

(4) a foreign government

and had been in substantially continuous employment by such employer under conditions which provided for his/her return transportation to the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States; or 

c. as a condition of employment by a Government agency, the employee was required by that agency to move to another area, in cases specifically authorized by the head of agency.  

The claimant’s place of residence in the place to which the quarters allowance applies (Japan) is fairly attributable to his employment by the United States Government, and he thus meets DSSR section 031.12a.  The DSSR makes clear that eligibility is established at the time of appointment; i.e., based on circumstances existing prior to the employee’s initial appointment to Federal service.  However, prior to appointment, the claimant was a student in New Zealand.  He was not employed in New Zealand by one of the qualifying employers listed in DSSR section 031.12b, which had recruited him in the United States and provided for his return transportation to the United States.  Therefore, the claimant does not meet the requirements of DSSR 031.12(b).   

The agency also considered the claimant’s eligibility under DSSR section 031.12c but determined that he did not meet these criteria because “he was not employed by the Government when he was in New Zealand.”  Section 031.12c clearly applies to existing Federal employees rather than new hires in both its language that the "employee" have been required by the agency to move to "another area," and that the move be "in cases specifically authorized by the head of agency."  First, relocation as a "condition of employment" for a new hire would be imposed during the recruitment process, before the job candidate has status as an "employee."  Second, "cases specifically authorized by the head of agency" would apply, for instance, to base closures or transfers of function that are specifically authorized by agency heads, which authorization is not required for routine Federal appointments.  Further, this plain language interpretation of DSSR 031.12c is reinforced in DoDI 1400.25-V1250, Enclosure 2.2.g, which states that, to make a determination under DSSR section 031.12c, three tests must be applied: (1) employment must be ended if the employee fails to accept relocation, (2) the relocation must be caused by a management-generated action, and (3) management must request the employee not now in receipt of LQA to relocate to another area.  The language that the employment would be "ended if the employee fails to accept relocation" clearly communicates that this provision applies to existing "employees" (rather than job candidates) whose employment would be "ended" (indicating an existing employment).  Thus, application of DSSR section 031.12c is inapplicable to the claimant’s situation because he was not required to move from one area to another subsequent to his appointment at which time he attained Federal status.   

Further, the agency also mentions in their response to the AAR the waiver provision in the DoDI 1400.25-V1250, Enclosure 2, 2.e., which provides:

Section 031.12b of Reference (c) [DSSR] will be waived for locally-hired U.S. citizen employees who have, immediately prior to appointment, been directly employed by the United States as foreign nationals under third-country contracts or agreements that provided them with LQA or housing at no cost.

The agency indicates this waiver provision "might have applied if Mr. Castro had been in Japan as a locally-hired U.S. citizen employee.”  However, they concluded that it did not apply as he was "a student in New Zealand.”  We note this would have been a misapplication of the above waiver provision and would not constitute a basis for granting LQA under those hypothetical circumstances.  This waiver provision must be read in its entirety as referring exclusively to third-country citizens who were employed by the United States overseas as foreign nationals, under third-country contracts or agreements that provided them with LQA or housing at no cost, and who acquired United States citizenship during the course of that employment prior to their appointment, thus rendering them "locally-hired U.S. citizen employees."  It does not apply to "locally hired U.S. citizen employees" without the other specified conditions.  See OPM File Number 12-0001, dated May 31, 2012.

Additionally, the claimant specifically requests that he be granted LQA benefits because he was not notified by the Kadena ABS Civilian Personnel Office that he was not eligible for LQA benefits prior to his arrival in Okinawa on November 15, 2015.  He states, “if I had been notified of this prior to my arrival in Japan I would have not have accepted this position.”  The record does not contain any information to show that the claimant was misinformed about LQA eligibility by an agency official prior to his EOD, nor that the vacancy announcement contained information regarding LQA eligibility.  Nevertheless, 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 not determined to be eligible for LQA prior to his appointment to the Federal service does not confer eligibility not otherwise permitted by statute or its implementing regulations.

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).  Thus, an agency may withhold LQA payments from an employee when it finds that the circumstances justify such action, and the agency’s action will not be questioned unless it is determined that the agency’s action was arbitrary, capricious, or unreasonable.  Under 5 CFR 178.105, 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).  As discussed previously, the claimant has failed to do so.  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.

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.

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