Washington D.C
U.S. Office of Personnel Management
Compensation and Leave Claim Decision
Under section 3702 of title 31, United States Code
Logistics Operations
Department of the Army
Wiesbaden, Germany
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
05/14/2024
Date
The claimant is a Federal civilian employee with the Immediate Office of the Commander-in-Chief, Department of the Army in Wiesbaden, Germany. She requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial for full living quarters allowance (LQA) (rental and utilities portion) for her personally owned quarters (POQ). We received the request on August 28, 2023, and the agency administrative report (AAR) on August 18, 2023. For the reasons discussed herein, the claim is denied.
From August 2003 to June 2008, the claimant was employed with the Department of Defense Education Activity (DODEA) in Weisbaden, Germany. During this period, the claimant resided in rental quarters in Bierstadt, Germany, for which she received LQA. In June 2008, the claimant married her husband. At the time, the claimant’s husband was the sole owner of a property outside the city of Wiesbaden. The house was purchased by the claimant’s husband in June 1981 for 490,250.00 Deutsche Marks. However, according to the claimant, after she and her husband married, they chose to reside in her rental quarters in Bierstadt. Shortly after they were married, the claimant and her husband moved to the United States for a work reassignment in Alexandria, Virginia. In November 2009, the claimant returned to Germany and took a new assignment in Anbasch, Germany. At that time, she was determined eligible to receive LQA under the Department of State Standardized Regulations (DSSR), section 031.11, and she and her husband moved into rental quarters in Petersaurach, Germany. Her rental allowance commenced on February 27, 2010.
In May 2009, prior to her return to Germany, the claimant’s husband’s home was seized and auctioned. The house was sold to the highest bidder for a reduced price of € 232,000.00. However, after consulting with the District Court Judge presiding over her husband’s case, the claimant was given the opportunity to buy the home from her husband. The record shows the claimant purchased the property from her husband on July 5, 2010, for € 340,000.000. The claimant subsequently requested and received LQA for personally owned quarters (POQ) under the DSSR section 136. The record shows the claimant received LQA for the POQ from July 5, 2010, to December 11, 2015, in the amount of $231,659.19. Sometime after 2015, the claimant returned to the United States for employment with DODEA. Her husband did not accompany her.
On April 28, 2019, the claimant left the United States, returned to Germany, and was assigned to a Management Analyst, GS-0343-13, position with the Office of the Deputy Chief of Staff, G-4 in Weisbaden, Germany. She was found eligible for LQA under the provisions of the DSSR section 031.11, an employee recruited in the United States. The claimant requested that the LQA for POQ recommence for the remainder of the 10-year DSSR prescribed period. On July 11, 2019, the agency denied the rental portion of LQA.
The DSSR contains the governing regulations for allowance, differentials, and defraying of official residence expenses in foreign areas. Section 136, Personally Owned Quarters, of the DSSR states:
a. When quarters occupiedby an employee are owned by the employee or the spouse, or both, or by the employee or the domestic partner, 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.
b. The following transactions shall not be considered to meet the intent of these regulations so as to warrant payment of the rental portion of living quarters allowance beyond the initial ten-year period specified in Part a:
(1) sale or gift of quarters owned by the employee or the spouse, or both, or by the employee or the domestic partner, or both, with employee remaining in the same quarters, or
(2) the purchase or exchange and move to other quarters in daily commuting distance of the same post.
The agency does not dispute that the claimant meets the provisions of DSSR 136a. However, it believes that because the buyer and seller of the POQ are related, husband and wife, it is problematic. The agency contends that the intent of the allowance would not be well served considering the claimant’s specific circumstances. The agency points out that prior to the foreclosure proceedings, the claimant had not requested LQA for the POQ when she was with DODEA in Wiesbaden in 2008. The agency further states that at that time, the home was mortgage-free. According to the agency, the allowance was requested for the sole purpose of eliminating a financial debt incurred by the claimant’s spouse. The agency points out the that the rule formulated under DSSR 132.5, speaks to the actual costs of quarters. The agency believes when the claimant claimed the property as her POQ between July 5, 2010, until December 11, 2015, it was essentially not to provide suitable and adequate living quarters, for which LQA may be paid under DSSR section 130, but “to provide her the financial means in paying off the loan she took out to absolve her husband from his debt.” The agency finds this problematic in terms of obligating funds from the U.S. Treasury to provide financial assistance for reasons unrelated to the real intent of LQA. The agency does not believe the ten-year DSSR-prescribed period of LQA for a POQ under section 136 should recommence because the grant of the allowance would not be in good conscience.
The statutory and regulatory languages establishing LQA are permissive and give agency heads considerable discretion in determining whether to grant LQA to agency employees. For example, the use of the permissive term “may” in section 013 of the DSSR as opposed to the mandatory terms “shall” or “will” identifies these allowances as discretionary on the part of the agency. The Department of Defense Instruction (DoDI) 1400.25 V1250, in effect during the period of the claim, specifies that overseas allowances are not automatic salary supplements, nor are they entitlements. 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. Here, OPM affirms the agency’s decision to deny the grant. Nothing in the record suggests the action was arbitrary, capricious, or unreasonable.
On the facts before us, the claimant has failed to demonstrate an entitlement to payment. 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 has 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. Therefore, the claimant’s request for full LQA is denied.
We note, in her claim to OPM, the claimant states, “disapproving the rental portion of LQA/POQ has been an enormous burden […] and has created a significant financial hardship” for herself and her family. However, the scope of OPM’s authority under section 3702(a)(2), of title 31, United States Code is narrow and limited to determining if monies are owed the claimant for the stated claim under the applicable statute and implementing regulations and does not extend to considering claims on the basis of financial hardship. Therefore, the claimant’s assertions about her financial situation have no applicability to our claim settlement determination.
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.