STUTTGART, Germany — The Defense Department will not impose new debts on nearly 700 overseas civilian workers who the department says received housing allowances “erroneously,” the Pentagon’s top personnel official said this week.
In May, 659 workers, mainly in Europe and the Pacific, were told that because of administrative mistakes they improperly received overseas housing allowances. They were told they would have to obtain special debt waivers so they would not have to repay all past allowances received.
Months later, however, those employees learned they could be on the hook for an additional round of debts in connection with other benefits associated with Living Quarters Allowances. Now, DOD says it will not conduct an audit to determine the extent of those debts and will grant a blanket extension that enables workers to continue receiving those associated benefits until their LQA expires in May.
“I have determined that because of the cost of conducting audits of associated allowances and establishing any associated debts would likely exceed the amount that would be collected, no audits of associated allowances will be conducted,” wrote Jessica Wright, DOD’s acting undersecretary of defense for personnel and readiness, in a Tuesday memorandum. “Further, no action will be taken to pursue collection of these associated allowance debts in the future.”
The move was welcomed by the employees, who have been critical of DOD’s handling of the matter. However, employees say blanket debt waivers should also be extended to housing allowances. Tuesday’s decision applies only to additional allowances workers have received, such as Temporary Quarters Subsistence Allowance, known as TQSA; student travel; post-differential; foreign transfer; separation maintenance; and home services.
In early 2013, DOD ordered an audit of locally hired personnel overseas in connection with a new interpretation of rules governing who is eligible to receive Living Quarters Allowances, which helps cover the cost of rent and utilities.
Employees argue that the new interpretation of regulations should not be applied retroactively and that the department should honor their original hiring agreements. Numerous senior military commanders have sided with the workers, urging DOD to restore the benefits. So far, DOD has rejected those requests.