Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
U.S. Department of the Army
Stuttgart, Germany
Ana A. Mazzi
Principal Deputy Associate Director
Agency Compliance and Evaluation
Merit System Accountability and Compliance
11/22/2024
Date
The claimant is a former Federal civilian employee with the U.S. Africa Command, U.S. Department of the Army (Army) in Stuttgart, Germany. He requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial of living quarters allowance (LQA) for a change-in-residence. We received the request on May 8, 2023, and the agency administrative report (AAR) on August 31, 2023. For the reasons discussed herein, the claim is denied.
On August 7, 2016, the claimant was appointed to a Supervisory Facility Operations Specialist, GS-1640-13, position with Army in Stuttgart, Germany. As an employee recruited from the United States, the claimant was found eligible for LQA. Prior to his employment with Army, the claimant worked overseas with the U.S. Department of the Air Force (Air Force). While employed with Air Force, the claimant purchased and occupied a personally owned quarters (POQ) in Niederhausen, Germany. At the time of onboarding, the claimant was given the option to resume his LQA for his POQ even though the home was 125 miles from his post of assignment in Stuttgart.
In October 2019, the claimant stated that he became ill and could no longer continue commuting between his POQ and post of assignment. The claimant subsequently submitted a request for a change-in-residence action to be made effective in November 2019. The agency denied his request. On March 6, 2022, the claimant requested an exception to policy. Specifically, the claimant requested that he be permitted to change his primary residence from his POQ in Neiderhausen to an apartment in Stuttgart with the intent of receiving LQA for the rental, rather than the POQ. On October 26, 2022, the agency denied the request citing that the agency would not grant an employee quarters allowance when the employee had access to a POQ in their local area of work. However, the claimant states that while he submitted a request for an exception to policy, he later rescinded this request. He states that “no exception to policy letter was needed because [he] was within the policy.”
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 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.
There is no dispute the claimant met section 031.11 of the DSSR at the time of his appointment. Thus, the claimant was eligible for LQA as a U.S. Hire. Therefore, the claimant requested and was granted full LQA (rental and utilities portion) for his POQ under DSSR section 136(a), which states:
When quarters occupied by an employee are owned by the employee or the spouse, 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 quarters 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.
As stated above, after falling ill, the claimant requested a change-in-residence, which was denied. He later filed a request for an exception to policy in accordance with the Department of Defense Instruction (DoDI) 1400.25 V1250 E2.2.l, dated February 23, 2013, to receive LQA for his rental in Stuttgart. It states in 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.
Although the request was denied, the claimant states that no request for an exception to policy was needed, because he was “within the policy.” Specifically, he states that his POQ is not within his local area of work. The claimant asserts that he is eligible for the allowance under Army in Europe Regulation (AER) 690-500.592, Civilian Personnel Overseas Allowances, section 11(a), dated September 6, 2018, which states in part:
When an employee maintains more than one residence in the Army in Europe AO (leased or owned), the employee may properly submit expenses for LQA reimbursement for whichever residence he or she designates as primary only in cases where the employee maintains more than one residence as a result of an MDR. In all other cases, the employee will only receive LQA for the quarters nearest his or her post of assignment. Emphasis added.
He further states that the AER 690-500.592, dated September 6, 2018, Glossary, Section II, Terms defines “reasonable proximity to post of assignment” as:
For purposes of this regulation, the reasonable proximity to the post of assignment is within a radius of the post of assignment that spans about 50 miles or 80 kilometers. Requests for exception to this residence requirement in extraordinary cases, such as medical requirements of Family members, may be submitted to the Civilian Personnel Directorate, Office of the Deputy Chief of Staff, G1, HQ USAREUR, for consideration.
Based on the facts surrounding the claim, it is clear the claimant was found eligible for LQA in August 2016, under the provisions of the DSSR section 031.11, the DoDI 1400.25-V1250, and AER 690-500.592, dated November 18, 2005, which was in force at the time. However, as pointed out by the agency, unlike the September 6, 2018, version of the AER 690-500.592, the November 2005 policy did not stipulate that an employee must choose a residence within a specific proximity to their post of assignment. Rather, the agency allowed employees personal discretion in choosing their residence regardless of the distance from their post of assignment. When the AER 690-500.592 was updated in September 2018, the agency “grandfathered in” those residences that were outside the newly defined reasonable proximity to post of assignment. In August 2016, the claimant chose to apply his LQA to a POQ he and his family previously occupied while he was employed with the Air Force. In so doing, the agency determined the claimant established the POQ as his primary residence within his local area of work. Therefore, although we considered the claimant’s assertions, relying on the explicit language in the DoDI 1400.25 V1250 paragraph E2.2.l, we affirm the agency’s decision.
The DoDI 1400.25 V1250 specifies that overseas allowances are not automatic salary supplements, nor are they entitlements. Furthermore, 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 payments 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 upon which to reverse the agency’s decision and the claim is therefore 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.