Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Command
Department of the Army
Stuttgart, Germany
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
10/20/2021
Date
The claimant is a Federal civilian employee of the U.S. Army Installation Management Command, Department of the Army (DA), in Stuttgart, Germany. She requests the U.S. Office of Personnel Management (OPM) reconsider her agency’s denial of a living quarters allowance (LQA) grant. We received the claim on April 12, 2021, and the agency administrative report (AAR) and the claimant’s comments to the AAR on June 24, 2021.
The claimant retired from the U.S. Air Force on December 31, 2018, in Stuttgart, Germany. On January 4, 2019, she travelled to the U.S. to reside with her mother in North Carolina (NC). The claimant applied for a Federal position with DA on April 6, 2019, and accepted a tentative job offer on July 2, 2019. During this time, she completed a LQA Questionnaire. Between July 31, 2019, and August 1, 2019, the claimant responded to a series of questions from the agency (e.g., information about shipping household goods and a motor vehicle to the U.S. and requesting a copy of her current rental agreement). Subsequently, the Civilian Human Resources Agency, Europe (CHRA-E) determined the claimant LQA ineligible. In a letter dated August 8, 2019, the claimant appealed CHRA-E’s LQA determination explaining how she believes she established legal residency in NC, to include providing documentation. The claimant was notified the agency reiterated CHRA-E’s LQA ineligibility determination on October 17, 2019. On or about that date, she accepted a final job offer. On December 9, 2019, the claimant was appointed into the Federal civilian service as a Supervisory Human Resources Specialist (Military), GS-0201-09, in Stuttgart, Germany. The agency restated the claimant’s LQA ineligibility determination in a memorandum dated February 4, 2020.
The claimant disagrees with her agency’s decision to deny her LQA, asserting she was unable to provide a copy of her rental agreement when initially requested because “my mother and I had negotiated a verbal tenancy agreement.” She goes on to state she “provided the agency detailed supporting documentation” and “I assure you that my actions were not deliberately calculated to take unfair advantage of the system.”
In its AAR to OPM, the agency explained its decision and states, in part:
…we noted some inconsistencies with [the claimant’s] statements that are in the form of her previously stating on August 01, 2019 that she would not have a rental contract as she lived with her mother; however, later produced a rental agreement with her mother that is dated January 04, 2019 (the date she departed Germany). While [claimant] also produced a notarized statement…that her mother owns the property and that [claimant] resided there…as a tenant, we found this to be problematic insofar that those documents were not produced previously and seemed to have contradicted her statement made in August 2019. As a result, we were unable to accept the documents in support of her having established a stateside residency.
[W]hile [claimant’s] hiring circumstances exhibited the characteristics of an employee recruited in the United States under the provisions of the DSSR [Department of State Standardized Regulations] § 031.11, implemented by the DODI [Department of Defense Instruction] 1400.25-V1250 and supplemented by the AER [Army in Europe Regulation] 690-500.592 [paragraph 7a(3)] with respect to the…180-day CONUS residency requirement on applicants who returned to the United States from a non-transitory period in the overseas area, [claimant] was unable to sufficiently demonstrate…she returned to the…United States to establish residency there that would merit the grant of LQA…
The Department of State Standardized Regulations (DSSR) contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas. Section 013 of the DSSR, addressing the authority delegated to the heads of agencies, states, in part:
When authorized by law, the head of an agency may defray official residence expenses for, and grant post differential, difficult to staff incentive differential, danger pay allowance, quarters, cost-of-living, representation allowances, compensatory time off at certain posts and advances of pay to an employee of his/her agency and require an accounting thereof, subject to the provisions of these regulations and the availability of funds. Within the scope of these regulations, the head of an agency may issue such further implementing regulations as he/she may deem necessary for the guidance of his/her agency with regard to the granting of and accounting for these payments. [Emphasis added]
Thus, the Department of Defense Instruction (DoDI) 1400.25, Volume 1250, may impose additional requirements to further restrict LQA eligibility, but may not exceed the scope of the DSSR; i.e., allow for the granting of LQA in cases not otherwise permitted under the DSSR.
DoDI 1400.25-V1250, which provides Department of Defense policy for the granting of LQA, provides the following:
Overseas allowances and differentials (except the post allowance) are not automatic salary supplements, nor are they entitlements. They are specifically intended to be recruitment incentives for U.S. citizen civilian employees living in the United States to accept Federal employment in a foreign area. If a person is already living in the foreign area, that inducement is normally unnecessary. Individuals shall not automatically be granted these benefits simply because they meet eligibility requirements. [Emphasis added]
There is no dispute that the claimant met eligibility requirements for LQA under the provisions of DSSR section 031.11 and DoDI 1400.25-V1250, which implements the provisions of the DSSR for Department of Defense civilian employees. However, supplementing the pertinent provisions of the DSSR and the DODI 1400.25-V1250, the Army in Europe Regulation (AER) 690-500-592, paragraph 7.a.(3) imposes a minimum of 180-day CONUS residency requirement on applicants who returned to the United States from a non-transitory presence in the overseas area. Paragraph 7.a.(3) reads:
“LQA may be granted to applicants who are selected, competitively or noncompetitively, for overseas positions when they return from nontransitory presence in an overseas area, if they have physically resided permanently in the United States for at least 180 days before accepting the formal offer of employment. This includes military members, contractor employees, and those with no previous DOD affiliation.
Therefore, we are left to consider whether the claimant truly established a stateside residence to qualify for LQA in accordance with AER 690-500.592, paragraph 7.a.(3). The record is clear that the agency questions that the claimant returned to the United States to establish residency for more than just tax or transitory purposes. The agency’s position is that the claimant “seemed” to return to the United States for “a transitory” reason. Further, in its AAR dated June 23, 2021, the agency states the claimant “sought to return to Stuttgart, Germany shortly after her return to the United States by actively applying for positions where she left some of [sic] personal belongings; she eventually accepted the final job offer for her current position without the grant of LQA.”
The use of the permissive term “may” in DSSR section 013 as opposed to the mandatory terms “will” or “shall” indicate that LQA is a discretionary allowance on the part of the agency. Therefore, although the claimant met LQA eligibility requirements under the applicable provisions of the DSSR, DoDI, and AER, the agency’s decision to deny the claimant LQA is within its discretionary authority under DSSR section 013 and in accordance with implementing instructions of the DoDI. Under statutes that vest a degree of discretion to administrative agencies, our review is generally confined to deciding whether an agency’s action must be viewed as arbitrary, capricious, or so at variance with the established facts as to render its conclusion unreasonable. Therefore, 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). Here, the claimant has failed to meet that burden. Since an agency decision made in accordance with established regulations and within its discretionary authority, as is evident in the present case, cannot be considered arbitrary, capricious, or unreasonable, there is no basis upon which to reverse the decision. Accordingly, the claim is denied.
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.