Washington, DC

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

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Ana A. Mazzi
Principle Deputy Associate Director
Agency Compliance and Evaluation
Merit System Accountability and Compliance




12/17/2024

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Date

The claimant is a Federal civilian employee of the Office of Defense Partnership, U.S. Central Command, Department of the Air Force (AF) at the U.S. Embassy in Abu Dhabi, United Arab Emirates (UAE). He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial for post differential. We received the claimant’s request on August 30, 2023, and the agency administrative report (AAR) on December 18, 2023. For the reasons discussed herein, the claim is denied.

The claimant served on active duty with the U.S. Army in Abu Dhabi, UAE and during his transition to retirement from the military, he applied for and was selected for his position of Director of Staff, GS-0301-14 with the AF in the UAE. He states that because the U.S. Army did not have a facility in the UAE to enable him to retire from the military, to do so he returned to the United States for two business days. The claimant’s DD Form 214, Certificate of Release or Discharge from Active Duty shows he retired from the military effective June 30, 2023. Then effective July 5, 2023, he was appointed to his civilian position with the AF. He was found ineligible for post differential under the Department of State Standardized Regulations (DSSR) section 031.3 because he did not meet living quarters allowance (LQA) eligibility requirements of DSSR sections 031.11 for employees recruited in the United States or 031.12 for employees recruited outside the United States. In its decision dated July 27, 2023, the agency explains its denial for LQA and post differential to the claimant as follows:

The determination process revealed that LQA/PD cannot be granted because you do not meet the personal eligibility requirements as stated in the Department of State Standardized Regulations (DSSR) para. 031.11 and the Undersecretary of Defense guidance Memorandum dated 3 January 2018. As stated in the LQA guidance Memorandum from the Undersecretary of Defense an applicant is not eligible for LQA if the employee was not physically present in the United States during the entire recruitment process. In your case you were a military member in Abu Dhabi, UAE while applying for the job and therefore not physically present in the United States.

 Specific to the claimant’s ineligibility under DSSR section 031.12, in its AAR, the agency states:

[Claimant] does not meet personal eligibility requirements as stated in the DSSR 031.12 in conjunction with USAFEI 36-105 3.2.1.2.2. as a non-stateside hire because he did not physically separate from the military in the overseas location. In order to separate from the military [claimant] went on a TDY in Fort Knox TC, KY.

In addition, in an email to OPM dated August 30, 2023, the agency cites DSSR section 031.3, and states that as the claimant is not eligible for LQA he is also not eligible for post differential. The claimant presents his request as a claim for post differential but does provide a rationale to support eligibility for LQA under DSSR sections 031.11 or 031.12. However, he states, “I am asking for appeal since I did not have an opportunity to separate overseas, the USAFE Instruction is focused on service members in Europe and does not consider military members without an option of separating overseas.” However, since the claimant can only receive post differential if he is eligible to receive LQA, we must first examine LQA eligibility requirements against his hiring circumstances.

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. Therefore, an LQA applicant must fully meet relevant provisions of the DSSR before the supplemental requirements of the DoDI or other agency implementing guidance may be applied.

DSSR section 031.11 states LQA may be granted to employees recruited in the United States:

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.

Relative to these criteria, DoDI 1400.25, Volume 1250, defines “U.S. Hire” as follows:

A person who physically resided permanently in the United States or the Northern Mariana Islands, from the time he or she applied for employment until and including the date he or she accepted a formal offer of employment.

The claimant does not meet eligibility criteria for LQA under DSSR section 031.11. An employee’s status as a U.S. hire is based on physical residency at the time of recruitment for the position in question. Therefore, an employee must be physically residing in the United States for the entire recruitment period, i.e., from the time of application until acceptance of a formal job offer. As a result, whether an employee is deemed to be recruited in or outside the United States is dependent on the location of the employee when recruited. In this case, the claimant was physically residing in the UAE as opposed to in the United States when he was recruited for his Federal civilian position with AF. Therefore, he may not be considered a U.S. hire for purposes of LQA under DSSR section 031.11 and implementing regulations of the DoDI. [1] Consequently, he is ineligible for LQA under section 031.11 of the DSSR.

DSSR section 031.12 states, in relevant part, that LQA may be granted to employees recruited outside the United States provided that:

1. 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
2. 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. [Italics added.]

United States Air Forces in Europe - Air Forces Africa Instruction (USAFE-AFAFRICAI) 36-105, dated January 4, 2022, provides the following supplemental guidance for AF civilian employees relative to LQA and DSSR section 031.12:

3.2.1.2.2. Pursuant DSSR 031.12 …To maintain the substantially continuous employment, prospective employee also must not have used part of their return transportation entitlement or be beyond 1 year after the date of separation. Additionally, the separation from military or civilian service must take place overseas; separation in the U.S. and subsequent return to the overseas at personal expense interrupts the overseas service and rules out applicability of DoDI 1400.25 - V1250, Encl.2, 2.a.

The claimant meets DSSR section 031.12a because his presence in the UAE is attributable to his employment with AF. However, he must also meet all the requirements specified in DSSR section 031.12b to be considered eligible for LQA. Prior to appointment, the claimant was recruited in the United States (Kentucky) as shown on his DD Form 214, by a qualifying employer under DSSR section 031.12b(1), the U.S. Armed Forces (Army). However, the claimant has not established that he was in “substantially continuous employment under conditions which provided for his return transportation to the United States” as required in DSSR 031.12b. Rather, included in the record is a military travel order, dated November 7, 2022, showing the claimant was ordered by the Army to travel to the U.S. Army Transition Point in Kentucky for the purpose of retirement/separation. The order states, “[y]ou and your command sponsored dependents, household goods, accompanied and unaccompanied baggage, and POV are authorized Government funded travel from your overseas duty station to point of debarkation in the United States.” It also states that “[s]oldier’s entitlement to travel and transportation allowances are from debarkation point through transition point to home of selection, home of record, or place entered active duty.” This information suggests the claimant used his military return transportation entitlement to return to the United States. Therefore, once the claimant used his military transportation entitlement to return to the United States and separated from the military, he would no longer be considered to have been in “substantially continuous employment under conditions which provided for his return transportation consistent to the provisions of DSSR section 031.12b, which is based on the premise that, prior to appointment, the employee is physically located overseas and employed by one of the qualifying entities with intact return transportation entitlement to the United States. Therefore, the claimant is also ineligible for LQA under DSSR section 031.12b.

Even assuming arguendo, the travel order did not constitute the claimant’s return transportation benefit to the United States, agency implementing instructions established in USAFE-AFAFRICAI 36-105 paragraph 3.2.1.2.2., require that separation from military or civilian service take place overseas as  “separation in the U.S. and subsequent return to the overseas at personal expense interrupts the overseas service and rules out applicability of DoDI 1400.25 - V1250, Encl.2, 2.a.” [2] As there is no dispute that the claimant did not separate from the military overseas, on this basis he would also be ineligible for LQA under section 031.12 of the DSSR.  

In response to the claimant’s concern of not having “an opportunity to separate overseas” because there was no Army facility in the UAE to complete his transition into retirement, we note that OPM’s adjudication authority in 31 U.S.C. 3702(a)(2) is narrow and limited to determining if monies are owed the claimant under the controlling statutes or regulations. Section 3702 does not include the authority to review the claimant’s issue of not having the option to separate from the Army overseas.

Finally, DSSR section 031.3 provides in relevant part that “[p]ost differential prescribed in Chapter 500 may be granted to employees who are described in Sections 031.11 and 031.12 (eligible for quarters allowances)….” Therefore, the claimant’s eligibility for post differential is dependent on his eligibility for LQA. Since the claimant is not eligible for LQA under either DSSR section 031.11 or 031.12, he may not be granted post differential. Accordingly, his claim for post differential is denied.

DoDI 1400.25-V1250 specifies that overseas allowances are not automatic salary supplements, nor are they entitlements. They are specifically intended as recruitment incentives for United States citizen civilian employees living in the United States to accept Federal employment in a foreign area. If a person is already living in a foreign area, that inducement is normally unnecessary. 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 5 CFR 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.

[1] This instruction is relevant to former military members considered to have “substantially continuous employment” for up to 1 year from the date of separation or when transportation entitlement is lost, or until the retired member uses any portion of the entitlement transportation back to the United States, whichever occurs first.

[2] This instruction is relevant to former military members considered to have “substantially continuous employment” for up to 1 year from the date of separation or when transportation entitlement is lost, or until the retired member uses any portion of the entitlement transportation back to the United States, whichever occurs first.

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