Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Department of the Army
Wiesbaden, Germany
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
08/27/2024
Date
The claimant is a Federal civilian employee of the U.S. Army Cyber Command, Department of the Army (DA), in Wiesbaden, Germany. He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial of living quarters allowance (LQA) for his personally owned quarters (POQ). We received the claim on November 1, 2022, and the agency administrative report (AAR) and claimant’s comments on the AAR on February 13, 2023. For the reasons discussed herein, the claim is denied.
On July 12, 2002, the claimant was appointed to a Federal civilian position in Mannheim, Germany. He purchased a POQ in Gruendau on August 26, 2002, and requested and was granted LQA for POQ (identified by the agency and hereafter referred to as 1st POQ) for a 10-year period. The agency determined the claimant eligible for LQA under the provisions of the Department of State Standardized Regulations (DSSR) section 031.12, for employees recruited outside the United States. He received LQA for the 1st POQ for 2,309 days from September 23, 2002, to January 17, 2009, when he transferred to a position at Fort Bragg, North Carolina. In September 2014, the claimant applied and was subsequently selected for a position in Wiesbaden. The agency determined him LQA eligible under DSSR section 031.11, for employees recruited in the United States. The claimant requested LQA and on September 19, 2014, LQA for the 1st POQ recommenced for the remainder of the 10-year period under DSSR section 136. On December 2, 2016, he sold the 1st POQ and received LQA for 908 days through March 14, 2017, remaining in the residence until completion of the closing process.
In early March 2017, the claimant notified the Civilian Human Resources Agency-Europe (CHRA-E) LQA Administrative Office (AO) of the sale of the 1st POQ. He requested the LQA be converted from POQ to rental quarters, which the agency states it granted effective March 15, 2017, in error. On June 23, 2019, the claimant transferred to a position at Fort Bragg, North Carolina. In 2021, he applied for and was subsequently selected for a position in Wiesbaden and the agency determined him LQA eligible under DSSR section 031.11. On September 12, 2021, he was reassigned to his current Information Technology Project Manager (Network/Policy Planning), GS-2210-13, position. Upon the claimant’s return to Germany, he requested LQA for a new POQ (hereafter referred to as 2nd POQ) for a 10-year period. On November 5, 2021, he purchased the 2nd POQ, which was also in Gruendau. In an email dated March 4, 2022, and reiterated in a memorandum dated March 16, 2022, the claimant was notified his LQA for the 2nd POQ will be limited to the remainder of the 10-year period granted for the 1st POQ purchased in 2002, under DSSR section 136a.
The claimant disagrees with the agency’s determination to deny him payment of LQA for the 2nd POQ for a new 10-year period. He asserts that during in-processing he inquired about purchasing his current residence and “received a positive” response from the agency. The claimant acknowledges the 2nd POQ is in the daily commuting distance of Wiesbaden because he previously lived nearby. However, he believed his file was reviewed before receiving the response and proceeding with purchasing the residence. The claimant also believed he would be determined “eligible for 7.5 years of POQ, based [on] 2.5 years of payment for a house while stationed at Wiesbaden 2014-2017.”
In its AAR to OPM, the agency explained its decision and states, in part:
….a new 10-year period for the 2d POQ cannot be authorized because it is in the same area of commute of the 1 st POQ for which LQA was granted for the duration of 3,217 days. We did authorize the full LQA grant under the DSSR [section] 136a for the remainder of the 10-year or 3,660 days period prescribed for the 2d and more costly POQ. Based on our calculation, the remainder of the 10-year period is 443 days from the day of occupancy….after this period, LQA will be reduced to the utilities portion only.
The DSSR contain 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, which may include placing restrictions on offered benefits. 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 under the DSSR. Therefore, an LQA applicant must fully meet the relevant provisions of the DSSR before the supplemental requirements of the DoDI or other agency implementing guidance may be applied.
Section 136 of the DSSR addressing LQA for POQ states:
a. 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 quarter’s allowance in accordance with Section 134. The amount of the rental portion of the allowance (up to 10 percent of purchase price) is limited to a period not to exceed ten years at which time the employee will be entitled only to above utility expenses, garbage and trash disposal, plus land rent.
b. The following transactions shall not be considered to meet the intent of these regulations so as to warrant payment of the rental portion of living quarters allowance beyond the initial ten year period specified in Part a:
(1) sale or gift of quarters owned by the employee or the spouse, or both, or by the employee or the domestic partner, or both, with employee remaining in the same quarters, or
(2) the purchase or exchange and move to other quarters in daily commuting distance of the same post.
Payment for utilities and (if necessary) land rent may be continued beyond the 10 year period. The head of agency may waive provisions of Part b in unusual circumstances.
The claimant asserts his eligibility of LQA for POQ pursuant to DSSR section 136. He states the DSSR does not limit the number of POQ he may purchase and the 2nd POQ is the only residence he owns in the overseas area. The claimant states DSSR section 136a applies to the 2nd POQ and allows payment of LQA for POQ for up to 10-years. He does not appear to believe the restrictions in DSSR section 136b(2) apply to his situation by stating there was no purchase and move to other quarters and no exchange and move to other quarters.
Regardless of the claimant’s assertions, the plain language of DSSR section 136b(2) addresses his circumstances. It describes a transaction that does not meet the intent of the DSSR LQA regulations. Payment of the rental portion of LQA is not warranted beyond the initial 10-year period specified in section 136a for “the purchase or exchange and move to other quarters in daily commuting distance of the same post.” The record shows the claimant purchased the 2nd POQ within the same commuting distance as the 1st POQ to his workplace in Wiesbaden. However, upon the claimant’s return to Germany and requesting LQA in September 2021, the agency stated 443 days remain from his original LQA grant, which can be used upon occupancy of the 2nd POQ. When this period ends, the LQA will be reduced to only the utility portion. Therefore, the claimant may not be considered LQA eligible under DSSR section 136b(2) for a new 10-year grant for the 2nd POQ.
The claimant does not meet the relevant provisions of the DSSR for LQA eligibility; therefore, the claim for LQA for the 2nd POQ is denied. We note that both the agency and the claimant included discussions analyzing supplemental agency instructions in their submissions. However, since the DSSR requirements were not met, the agency instructions may not be applied and are irrelevant to the determination of the claimant’s eligibility to receive LQA.
The DoDI 1400.25 specifies that overseas allowances are not automatic salary supplements, nor are they entitlements. They are specifically intended as recruitment incentives for U.S. citizen civilian employees living in the United States to accept Federal employment in a foreign area. Furthermore, 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 Code of Federal Regulations 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.