Washington, DC

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

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Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance


08/05/2022

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Date

The claimant is a Federal civilian employee of the Automation Resources Division, J6/C3 System Directorate, Headquarters, U.S. European Command (HQ, USEUCOM), Joint Activities, Department of the Army, in Stuttgart, Germany.  She requests the U.S. Office of Personnel Management (OPM) reconsider her agency’s denial of living quarters allowance (LQA) for rental quarters while maintaining personally owned quarters (POQ) in the local area of work.  We received the claim from her duly appointed representative on January 5, 2022, the agency administrative report (AAR) on March 2, 2022, and the claimant’s comments on the report on March 28, 2022.  For reasons discussed herein, the claim is denied.

While employed as a Federal civilian employee with HQ, USEUCOM at Fort Meade, Maryland, the claimant applied and was subsequently selected for her current position in Stuttgart.  Prior to her Fort Meade assignment, she was employed as a Federal civilian employee with HQ, USEUCOM in Stuttgart from July 2007 to November 2015.  The claimant and her spouse purchased a house within the Stuttgart commuting area, in Weissach, on April 28, 2008.  She was determined eligible for LQA at that time as an employee recruited outside the United States under section 031.12 of the Department of State Standardized Regulations (DSSR) and received LQA for her POQ from April 21, 2008, to November 1, 2015.  The claimant accepted a management-directed reassignment with HQ, USEUCOM at Fort Meade, effective November 15, 2015.  On March 4, 2020, she and her spouse agreed to rent their POQ in Weissach to a Federal civilian employee who was also employed with HQ, USEUCOM.  The agreement included a provision to not terminate the contract for personal reasons before April 1, 2023.  The claimant states she applied for her current HQ, USEUCOM position in August 2020, and she was subsequently selected for and reassigned to the position effective June 20, 2021.  Upon returning to Stuttgart for her current position, the claimant obtained rental quarters due to her tenant-occupied POQ.  In its December 6, 2021, memorandum, the Department of the Army (DA), Civilian Personnel Division (CPD), G1 (hereafter referred to as “agency”) denied the claimant’s request for the rental portion 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 agency.  However, the agency denied her request for the rental portion of LQA, though granting the utilities portion, based on provisions in paragraph E2.2.l of Department of Defense Instruction (DoDI) 1400.25, Volume 1250, and paragraph 11.e.(2) of Army in Europe Regulation (AER) 690-500.592, which prohibit the grant of quarters allowances under a rental contract if an employee owns POQ in the commuting area.

The DSSR are the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas.  Under section 031, they allow agencies to issue implementing regulations as follows:

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 allowances, 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 and accounting for these payments.

Therefore, the DoDI 1400.25, AER 690-500.592, and other agency implementing regulations 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.

The claimant acknowledges she and her spouse own a residence in the Stuttgart commuting area, but she disagrees with the agency’s rationale for denying her request for the rental portion of LQA.  She notes in her claim that DoDI 1400.25, paragraph 4.e., describes the intent of LQA to cover substantially all allowable costs for “suitable, adequate quarters, including utilities.”  The claimant explains that although local laws allow German landlords to cancel leases with adequate notice to tenants, the DA prohibits landlords renting properties to U.S. personnel from including similar cancellation provisions in their lease agreements.  She states she is thus unable to occupy her residence in the local area without violating DA’s prohibition on premature termination of rental contracts.  According to the claimant, the agency’s denial conflicts with the intent of LQA as it fails to consider her tenant-occupied residence cannot be considered “suitable, adequate quarters” described by DoDI 1400.25, paragraph 4.e.  Furthermore, her claim asserts that, although the DSSR and DoDI 1400.25 do not provide a definition for POQ, the AER 690-500.592 defines POQ as “[q]uarters occupied by the employee that are owned by the employee or the spouse…or both, for which LQA is received.”  In addition, AER 690-500.592 delegates responsibility to the CPD to review and make final determinations on matters of interpretation on this regulation as well as the DSSR and other Department of Defense (DoD) guidance relative to overseas benefits and allowances.  In her request, the claimant explains that because AER 690-500.592 defines POQ, whereas the DSSR and DoDI 1400.25 do not, “authority does rest with CPD to determine whether within the AER’s definition of POQ, ‘suitable and adequate quarters’…within the commuting distance of [the claimant’s] local area of work exist.”  In her AAR comments, she further explains:

…her position is that the provisions of DoDI 1400.25-V1250 relied on by the Agency are not applicable in this instance in that [the claimant] does not own property within the local commuting area that can be used as POQ due to the Army’s own implementing policies requiring leaseholds within the local area to forego the otherwise lawful ability of landlords to terminate a lease early.  Yes, [the claimant] and her husband do own property within the local commuting area, but it is not possible for them to use or occupy that property due to Army policy.  Thus, it is not available or adequate for use as quarters.

DoDI 1400.25-V1250 does not speak to or prohibit ownership of real estate or property within the commuting area of the duty station, regardless of purpose or circumstance.  Instead, it discusses POQ without further definition as to what qualifies as POQ.  This must be interpreted to mean that the intent of the DoDI 1400.25-V1250 prohibition of granting LQA for rent to employees when they have an available POQ is to prevent the payment of LQA for rental quarters when the employees have the option to use their own suitable, locally-owned residence.  Said differently, when an employee could have reasonably lived in her own POQ but chose not to after the time she knew she was accepted for employment for that local area, then rental portion LQA should not be available.  However, if the employee had no option to do so, rental portion LQA should not be denied, as here, the sole basis precluding it is the Army’s own policy preventing the Landlord’s otherwise lawful right to regain the property.

The agency disagrees with the claimant’s rationale, stating in its AAR:

[The claimant’s] legal counsel seems to take issue that there is no definition of a “POQ” in neither the DSSR nor the DOD guidance.  However, the DSSR § 136 spells out the abbreviation of a “POQ” and leaves no ambiguity what the authors of the guidance mean when they refer to the statement

“[w]hen quarters occupied by an employee are owned by the employee or the spouse, or both……” [emphasis added].

A more detailed definition is not required here.  [Claimant] received the full LQA (rental and utilities portion, the latter when the amounts paid did not exceed the LQA cap imposed by the DSSR), when she requested the allowance for the POQ that she bought in April 2008.  We cannot detect any ambiguity in the record when she requested the allowance for her home that she and her husband purchased in April 2008 and codified the act of purchasing the dwelling and subsequently becoming the owners of that dwelling.  Had they not become owners at the time and occupied the quarters, they could not have been able to draw LQA pursuant to the provisions of the DSSR § 136, and likewise, they could not have rented the quarters to other parties.

The claimant seeks relief based mainly on the consideration that because she is unable to occupy her house in the Stuttgart commuting area, that residence does not satisfy the intent of LQA described by DoDI 1400.25, paragraph 4.e., of “suitable, adequate quarters.”  Because she owns a residence in the local area, notwithstanding whether it is or is not currently habitable, we must consider provisions in DoDI 1400.25, paragraph E2.2.l, which states in relevant part:

Employees who own, or are purchasing a POQ, may not be paid quarters allowances under a rental contract if the POQ is within the employee’s local area of work.

Also relevant to the claimant’s situation is AER 690-500.592, paragraph 11.e.(2), which states:

LQA will not be paid to employees for rental quarters if they own a POQ within the commuting area of their [permanent duty station] (OPM Decision 12-0033, 7 March 2014).  Employees are considered to be in possession of POQ when either their spouse or domestic partner or both the employee and his or her spouse or domestic partner own the POQ (DSSR, sec 136a).

The claimant appears to ask OPM to consider the intent of LQA to the exclusion of the aforementioned provisions in agency implementing regulations.  Adopting such rationale would essentially render applicable provisions in the DoDI 1400.25 and AER 690-500.592 superfluous in situations relating to employee-owned quarters in the local area of work.  It is a cardinal principle of statutory construction that a statute should be construed such that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant.  Duncan v. Walker, 533 U.S. 167, 174, 121 S.Ct. 2120, 150 L.Ed.2d 251 (2001).  This principle also applies to implementing regulations such as the DoDI 1400.25 and AER 690-500.592, and as such, the claimant’s reliance on DoDI 1400.25, paragraph 4.e., regarding the intent of LQA, is misplaced.

Instead, the clear and unambiguous language of provisions in the DoDI 1400.25 and AER 690-500.592 explicitly prohibit the grant of LQA for rental quarters if an employee owns quarters in the local area of work.  The only considerations to be made here relate to location and ownership of the POQ.  In this case, the record shows the residence was acquired by the claimant and her spouse during her previous overseas assignment and is located within the Stuttgart commuting area.  Her claim describes various personal circumstances; for example, she and her spouse entered into the lease agreement with the tenant prior to her applying for her current position, the DA prohibits landlords from including cancellation provisions in rental agreements with U.S. personnel, and her preference is to reside in her POQ rather than in rental quarters.  Nonetheless, the applicable provisions in DoDI 1400.25 and AER 690-500.592 do not provide for consideration of personal circumstances and the resulting unavailability, either intended or unintended, of the POQ.  Therefore, the circumstances preceding the claimant’s acquiring of rental quarters concurrent with POQ ownership in the commuting area are irrelevant to consideration of the grant of LQA.  She also asserts CPD has authority to determine if her residence meets the definition of POQ.  The record shows CPD exercised its authority through the initial denial of her LQA request and AAR, determining the claimant owns POQ in the local area and, moreover, that granting the rental portion of LQA in this situation would conflict with provisions of DoDI 1400.25, paragraph E2.2.l, and AER 690-500.592, paragraph 11.e.(2).  OPM has no authority to confer a benefit not permitted by law, regulation, or agency policy.  When the agency’s factual determination is reasonable, we will not substitute our judgment for that of the agency.  See Jimmie D. Brewer, B-205452, March 15, 1982.  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.  Therefore, the claim for the rental portion of LQA is denied.

In addition, the claimant makes various statements regarding her agency and its review of her LQA request.  For example, she states that prior to accepting the job offer for her current position, she had been advised by agency officials aware of her housing situation that she would be entitled to full LQA.  She also asserts she received conflicting housing and financial advice from agency officials.  OPM’s authority is limited to determining if monies are owed under the governing statutes and regulations for the stated claim.  Further, 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, the claimant’s assertions regarding the receipt of erroneous and contradictory advice from agency officials do not confer eligibility not otherwise permitted by statute or its implementing regulations.

The claimant asserts the agency failed to provide additional avenues to appeal within DoD, instead limiting her right to file an administrative claim to OPM.  She states in her claim that because she was “denied review on the merits by the proponent of the regulation which CPD deemed controlling, this also presents agency action that was arbitrary, capricious, and unreasonable.”  OPM adjudicates compensation and leave claims for Federal employees under section 3702(a)(2) of title 31, United States Code (U.S.C.).  This authority is narrow and limited to consideration of whether monies are owed the claimant for the stated claim under the applicable statute and implementing regulations.  The scope of OPM’s authority under 31 U.S.C. 3702(a)(2) does not extend to consideration of claims on the basis of assertions concerning the inadequacy of appeal options available to employees.

Pursuant to DoDI 1400.25, 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 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).  The claimant has failed to do so.

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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