Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Ramstein Air Base
U.S. Department of the Air Force
Ramstein, Germany
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
03/11/2021
Date
The claimant is a Federal civilian employee of the U.S Air Forces, Europe, Ramstein Air Base (AB), U.S. Department of the Air Force (AF), in Ramstein, Germany. He requests the U.S. Office of Personnel Management (OPM) to reverse his agency’s denial for the rental portion of living quarter allowance (LQA). We received the claim on September 10, 2020, and the agency administrative report (AAR) on October 26, 2020. For the reasons discussed herein, the claim is denied.
From April 2007 to May 2017, the claimant held a position with AF at Ramstein AB in Germany. During this ten-year period he received LQA for personally owned quarters (POQ). In May 2017, the claimant was reassigned to a position at Tinker Air Force Base (AFB) in Oklahoma. He states that prior to his reassignment to Tinker AFB he “disposed of the property by transferring ownership to [his] local national wife.” Subsequently, the claimant applied and was selected for his current position of Program Analyst, GS-0343-13, at Ramstein AB. He was reassigned effective October 13, 2019. The agency determined the claimant eligible for LQA under the provisions of the Department of State Standardized Regulations (DSSR) section 031.11, for employees recruited in the United States. However, during the in-processing to his position, the agency found him ineligible for the rental portion of LQA and authorized payment only for the utilities portion of the LQA. In its December 5, 2019 decision, the agency cites DSSR section 136(a) and its United States Air Force in Europe Instructions (USAFEI) 36-0705 paragraph 2.3.7., and explains its decision to the claimant as follows:
….You are not eligible for the rental portion of LQA because you have already received LQA to pay for POQ (Personally Owned Quarters) for the full ten year authorized by the DSSR (Department of State Standardized Regulations) during a previous overseas assignment at this permanent duty station. Your POQ at Morbach is within the Ramstein commuting area.
The claimant disagrees with the agency’s determination to deny him payment for the rental portion of the LQA because he believes the agency misinterpreted DSSR section 136(a) to his situation. He asserts that “receiving the rental portion of LQA or executing the POQ option is not a one-time authorization” and because he was appointed to a “new overseas assignment from CONUS, the 10-year limitation starts over without restriction.” He also asserts that had he “been assigned to any other location, this would not have even been an issue because there is no regulatory guidance limited [sic] PAQ [sic] to once in a lifetime of government employment.”
However, in its AAR to OPM, the agency further states:
It is also not relevant that [the claimant] came overseas on a second tour. [The claimant] is personally eligible for LQA as a stateside hire IAW DSSR 031.11; however since the government paid for 100% of a POQ in the overseas area in the past, he will only receive the utility portion of the LQA.
The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas. Section 013 of the DSSR addressing the authority delegated to the heads of agencies, states in part:
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 allowance, 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 of and accounting for these payments. [Italics added].
Thus, Department of Defense Instruction (DoDI) 1400.25 Volume 1250 and the USAFEI 36-0705, in effect during the period in question 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.
Section 136(a) of the DSSR addressing POQ, 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.
DoDI 1400.25-V1250, Enclosure 2, paragraph 2.1., which provides Department of Defense policy for the granting of LQA for POQ, states:
The annual rent payable for personally owned quarters (POQ) is based on the purchase price or appraised value of the property, converted to U.S. dollars at the exchange rate in effect at the time of purchase. 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. [Italics added].
USAFEI 36-705, which provides agency implementing guidance on benefits and allowance for U.S. employees in USAFE, states:
3.2.7. Personally Owned Quarters. In compliance with DSSR 136 and DoDI 1400.25- V1250, Encl. 2, 2.1., employees who purchase a home while serving in the overseas area may receive an annual rental portion of LQA equal to 10 percent of the purchase price or the appraised value of the POQ at the time of the purchase at the rate of exchange valid at the time of the purchase, for a maximum of 10 years. After 10 years, the Government has essentially reimbursed the employee for the full cost of the POQ and no further rental portion is appropriate. An employee who at his own choice sells the POQ before expiration of the ten-year period and moves into rental quarters receives through the sale more or less the amount of money that the Government would have paid over ten years to provide him an adequate residence. Therefore, employees who sold their POQ and moved into rental quarters or into other POQ will not be paid LQA beyond ten years.
In his request to OPM, the claimant failed to state whether he occupies the previously acquired POQ and whether he seeks the rental portion of the LQA for POQ or to be applied for payment of rental quarters. However, the agency’s statement that “he will only receive the utility portion of the LQA” appears to indicate that he occupies the POQ for which he received LQA for POQ for the full ten-year period allowed by the DSSR. Based on this understanding, the following analysis is provided in regards to the rental portion of LQA for POQ.
The DSSR does not provide those circumstances under which the rental portion of LQA may be continued beyond the initial ten-year period otherwise provided for under section 136(a). However, section 013 delegates authority to the head of agency to defray these official residence expenses through the issuance of “further implementing regulations.” This authority is specifically reserved to the head of agency and is not delegated to OPM in its claims adjudication authority. Thus, the DSSR allows the agency to provide those circumstances under which it will provide for payment of the rental portion of LQA beyond the initial ten-year period in its implementing regulations, subject to the restrictions in section 136(b). [1] We find that neither the DoDI 1400.25-V1250 nor the USAFEI 36-705 in effect at the time of the claim provide any further guidance authorizing payment of the rental portion of LQA for POQ beyond the initial ten-year period as addressed in section 136(a). Instead, in accordance with section 136(a) and as stated in its USAFEI 36-705, paragraph 2.3.7, the agency’s policy is that “after 10 years, the Government has essentially reimbursed the employee for the full cost of the POQ and no further rental portion is appropriate.” OPM has no authority to confer a benefit that is not permitted by law, regulation, or agency policy. Thus, the claimant’s request for the rental portion of the LQA for POQ is denied.
In the case that the claimant’s request for the rental portion of the LQA is for payment of rental quarters, as previously noted, DoDI 1400.25-V1250 Enclosure 2, paragraph 2.1., specifically prohibits the granting of LQA for rental quarters under a rental contract if the employee owns a POQ in the local area of work. The agency states (and the claimant does not disagree) that the POQ acquired during the claimant’s previous overseas assignment is within the Ramstein commuting area. Therefore, based on the information provided in the record and in accordance to agency implementing regulations as described above, a request for the rental portion of the LQA for payment of rental quarters would also be denied.
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). In this case, 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.
Lastly, the claimant also states that he would “not have accepted the assignment to Ramstein if informed by the 86 FSS of the limitation of LQA, withholding the rental portion,” and that the “financial loss of Locality Pay and out of pocket rental expense would have made the assignment to Ramstein unattractive.” However, even if they have no actual knowledge, Federal employees are charged with constructive knowledge of statutory requirements pertaining to them and of the implementing regulations and policies authorized to be issued by statute. See B-173927, October 27, 1971; B-187104, April 1, 1977; and B-192510, April 6, 1979.
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 record does not show the disqualifying transactions described in section 136(b) apply to the claimant’s situation, thus this section will not be addressed.