Washington DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Wiesbaden, Germany
Damon B. Ford
Compensation and Leave Claims Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
09/12/2022
Date
The claimant requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s debt collection action resulting from erroneous payment of living quarters allowance (LQA), when serving as a Federal civilian employee of the Immediate Office of the Commander-in-Chief of U.S. Army in Wiesbaden, Germany.[1] We received the claim on March 1, 2022, the agency administrative report (AAR) on April 12, 2022, and the claimant’s comments on the report on April 13, 2022. For reasons discussed herein, the claim is denied.
The claimant retired from military service in Kaiserslautern, Germany, on January 31, 2017. While residing in the overseas area, he applied and was selected for a term position effective September 17, 2018. The Human Resources Specialist (Military), GS-0201-09, position was later converted to a career-conditional position on May 10, 2020. At the time of the claimant’s initial appointment to the Federal service, the agency concluded he was eligible for and thus granted him LQA. However, on February 18, 2022, the agency notified him that a review of his records disclosed he had been erroneously determined eligible for LQA upon his appointment to the Federal service. The agency thus terminated his allowance retroactive to his initial appointment date, and the Defense Finance Accounting Service (DFAS) initiated debt collection action for the erroneous LQA payments.
The Department of State Standardized Regulations (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. 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.
The agency determined the claimant did not meet the basic requirements under section 031.12 of the DSSR, which states that LQA 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… [emphasis added]
Within this context, provisions in paragraph E2.2.a of DoDI 1400.25 essentially allow former military and civilian employees a period of up to one year of unemployment after separation (or loss of transportation entitlement) to be considered substantially continuously employed by the military or civilian employer. The agency explains in its AAR to OPM:
While the record showed that his transportation entitlement that would have facilitated his return to the United States and derived from his prior military service, was still in-tact at the time, which is a requirement imposed upon by the DODI 1400.25-V1250, paragraph E2.2.a. for consideration of “substantial continuous employment” under the DSSR § 031.12b., he was outside of the window of “substantial continuous employment” of 1 year following his retirement from military service on January 31, 2017, to be appointed to his initial federal civilian position, which occurred in September 2018. As a result, he cannot be considered eligible for the allowance.
Provisions of section 3702(a)(2) of title 31, United States Code (U.S.C.), are intended to provide recourse to challenge Federal agency decisions regarding entitlement to compensation. In this case, the claimant does not challenge the agency’s findings regarding his ineligibility for LQA. In comments on the AAR, the claimant states, “After over a month with various agencies, we all came to the conclusion that I am not [entitled] to [the LQA] benefit. What I do have issue with is, the [Civilian Personnel Division of the Office of the Deputy Chief of Staff, G1, U.S. Department of the Army (DA)] wanting me to pay an indebtedness that I had no influence over nor was I aware of until I was notified on the 18 February 2022 via email.” We therefore conclude that rather than disputing the underlying debt subject to the DFAS collection action, the claimant instead requests waiver of the overpayment debts resulting from erroneous LQA payments.
As a result of legislative and executive action, the authority to waive overpayments of erroneous payments and allowances now resides with the heads of agencies, regardless of the amount. See the General Accounting Office Act of 1996, Pub. L. No. 104-316, 110 Stat. 3826, approved October 19, 1996, and the Office of Management and Budget (OMB) Determination Order dated December 17, 1996. Neither Pub. L. No. 104-316 nor OMB’s Determination Order of December 17, 1996, authorizes OPM to make or review waiver determinations involving erroneous payments of pay or allowances. Under 5 U.S.C. 5584(a), an authorized agency official may waive the requirement for an employee to repay LQA when collection of the excess payments from the employee would be against equity and good conscience and not in the best interests of the United States. Therefore, OPM does not have authority to review, or issue a decision on, the request for waiver concerning the claimant’s indebtedness to the United States. Because the authority to waive overpayment debts is vested in the employing agency, the DA, the claim for waiver of the indebtedness must be denied for lack of authority. See OPM File Numbers 05-0047, April 3, 2009; 12-0036, October 31, 2013; and 14-0039, November 20, 2014.
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.
[1] The claimant was subsequently terminated from the Federal civilian position on July 8, 2022, after submission of this claim.