Washington, DC

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

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Robert D. Hendler
Classification and Pay Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance


08/05/2016

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Date

The claimant is a Federal civilian employee of the Department of the Army (DA) in Vicenza, Italy.  He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s termination of his living quarters allowance (LQA).  We received the claim request on September 12, 2014, the agency administrative report (AAR) on November 24, 2015, and the claimant's response to the AAR on November 24, 2015.  For the reasons discussed herein, the claim is denied.

The claimant was officially separated from military service in Schweinfurt, Germany, on May 31, 2008.  He was recruited for and accepted employment with L-3 Communications Corporation (L-3), in August 2008.  As an L-3 employee, the claimant was deployed to Vicenza, Italy, from August 2008, to December 16, 2011.  While in Italy, he was subsequently selected for his current term appointment, effective December 19, 2011.

At the time of the claimant’s appointment to the Federal service, the agency initially concluded he was eligible for and thus granted him LQA.  On May 1, 2013, the agency notified the claimant that a review of his records disclosed he had been erroneously determined eligible for LQA upon his appointment to the Federal service, and that the allowance was therefore being terminated.  The basis for this determination was that he did not meet the LQA eligibility provisions in the Department of State Standardized Regulations (DSSR), section 031.12a or b.  The agency explains its rationale in the AAR to OPM:

The Agency contends that the claim should be disallowed because the employee is not eligible for LQA under the applicable rules and regulations.  Prior to his federal government position, there is insufficient evidence of being hired for the L-3 Communications contract position while residing in the United States.

The claimant states in his claim request to OPM:

The Europe DSE Workforce was made to understand that LQA benefits would not be affected as a result of this transition[…].

Within this LQA instructions sheet you will find language that references the current contract letter, with the insinuation that these contract letters would somehow overrule regulation and the local-hire status.[1]  Had I known that my local-hire status would result in an audit and subsequent loss of LQA, I would have never allowed myself to be federalized and would have remained on the contract with L-3.

The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas.  DSSR section 031.12 states, in relevant part, 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.

Thus, eligibility for LQA is allowed by DSSR section 031.12b for those instances where the employee, prior to appointment, had “substantially continuous employment” with one of the entities listed under b(1) through b(4), and which entity (i.e., the singular usage of “such employer”) recruited the employee in and provided return transportation to the United States or its territories or possessions.

The claimant asserts that he “relocated out of Oklahoma City three years prior” to accepting his position with L-3 based in Vicenza, Italy.  In addition, the claimant affirmatively answered that he had been recruited by L-3 from the United States on his Questionnaire for Living Quarters Allowance (LQA) Determinations.  To support his assertion, he provided a copy of a termination notice of his rental agreement dated January 9, 2008, for the German residence he presumably occupied prior to his military separation.  The notice set April 15, 2008, as the date his rental agreement would cease.  The termination date is shortly before his military separation on May 31, 2008.  It appears that the claimant is seeking to use the rental termination to establish the ending of his residency in Germany.  However, this does not establish that after termination of his lease in Germany, he traveled back to the United States where he was subsequently recruited by L-3.  Thus, in turn, his failure to establish his return to the United States prevents him from sufficiently establishing that he was recruited by L-3 under the requirements stipulated in DSSR section 031.12b.  In addition, the claimant has not included his employment contract or any other documentation that would show L-3 provided for his return transportation to the United States.  Therefore, he is ineligible for LQA for failing to meet the requirements of DSSR section 031.12b.

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 U.S. 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).  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.

It is well settled by the courts that a claim may not be granted based on misinformation provided by agency officials, such as that resulting in DA’s erroneous granting of LQA to the claimant.  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, that the claimant was erroneously considered eligible for LQA upon his appointment to the Federal service and had received LQA based on that determination does not confer eligibility not otherwise permitted by statute or its implementing regulations.

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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