Washington, D.C.
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Kimberly A. Steide, DPA
Principal Deputy Associate Director
Agency Compliance and Evaluation
Merit System Accountability and Compliance
07/21/2025
Date
The claimant is a Federal civilian employee of the U.S. Defense Health Agency (hereafter referred to as “agency” or “DHA”), in Stuttgart, Germany. He requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial of his living quarters allowance (LQA) request. We received the claim on November 5, 2024, and the agency administrative report on December 13, 2024. For the reasons discussed herein, the claim is denied.
The claimant is currently assigned to a Liaison Officer, GS-0301-14, position with DHA in Stuttgart, Germany, effective September 11, 2022. Prior to appointment, the claimant was an active-duty member of the U.S. Armed Forces in Boblingen, Germany. On March 9, 2022, the claimant applied for his current position with DHA while still on active duty in Germany. On May 23, 2022, the claimant received the tentative offer from the agency. He accepted the offer on the same day. On June 13, 2022, the claimant traveled back to the United States using his military return transportation rights. He remained in the United States for several days. On July 2, 2022, the claimant returned to Germany. On July 18, 2022, the claimant submitted a Questionnaire for Living Quarters Allowance (LQA) Determinations. On this form the claimant answered “No” to the question, “Do you have a current return transportation agreement to the [United States]?” On July 29, 2022, the agency determined the claimant ineligible for LQA because he did not meet the eligibility requirements as either a stateside or non-stateside hire. On August 4, 2022, DHA informed the claimant that he was considered ineligible to receive LQA because he used his military return transportation rights to travel back to the United States prior to appointment.
The Department of State Standardized Regulations (DSSR) set forth basic eligibility criteria for the granting of LQA. The DSSR contains the governing regulations for allowances, differentials, and the defraying of official residence expenses in foreign areas. Under DSSR section 031.11, LQA may be granted to employees recruited in the United States. It states in part:
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.
According to the record, there is no dispute that the claimant applied for the Liaison Officer, GS-0301-14, position outside of the United States. Therefore, the claimant did not meet section 031.11 of the DSSR at the time of his selection and was, therefore, ineligible to receive LQA as a stateside hire.
However, the agency also determined the claimant did not meet the basic requirements of a non-stateside hire under DSSR section 031.12, which states:
Quarters allowances prescribed in Chapter 100 may be granted to employees recruited outside the United States, provided that:
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.
The claimant meets DSSR 031.12a in that his presence in Germany is fairly attributable to his current employment as a Liaison Officer, GS-0301-14, in Stuttgart, Germany.
However, under DSSR section 031.12b, an employee recruited outside the United States must, immediately prior to appointment, have been recruited in the United States by one of the enumerated entities which provided return transportation back to the United States. On May 23, 2022, the claimant received and accepted a tentative offer of employment from DHA. On June 13, 2022, the claimant used his military return transportation rights to travel back to the United States. On July 2, 2022, the claimant returned to Germany. On September 2, 2022, the claimant received and accepted the official offer of employment from DHA. Finally, on September 11, 2022, the claimant was officially appointed to his current position at the DHA. The agency determined the claimant ineligible to receive LQA on July 29, 2022, citing the claimant’s use of his military return transportation rights back to the United States in June. However, the claimant maintains that he used his military return transportation rights because he was following direct military orders. Specifically, the claimant received military orders dated March 19, 2019, which stated that “upon completion” of his military duty in Germany, he “will return to [his] home and upon arrival be released from active duty.” Further, the claimant explains that his “home of record” as provided to the U.S. military was designated as Herndon, Virginia. Therefore, he contends he should be eligible to receive LQA because he was following his official military orders.
The claimant’s use of his military return transportation benefits means that he did not maintain intact return transportation rights. Thus, upon his return to the United States, he could no longer be considered to have been recruited outside the United States for the purpose of DSSR section 031.12b, and the employment conditions it describes, which are based on the premise that, prior to appointment, the individual is employed overseas by one of the qualifying entities with return transportation benefits to the United States. The claimant’s transportation rights were not intact prior to appointment and therefore, DSSR section 031.12b is not met.
Furthermore, the Department of Defense Instruction 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 LQA to agency employees. Thus, an agency may deny LQA 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 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). In this case, the claimant failed to do so. 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 on which to reverse the agency’s decision, and the claim is therefore denied.
This settlement is final. No further administrative review is available within the OPM. Nothing in this settlement limits the claimant’s right to bring an action in an appropriate United States court.