STUTTGART, Germany — Some U.S. lawmakers are urging the Defense Department to restore housing allowance and cancel the debts of nearly 700 overseas workers who are being held financially liable for past benefit payments the government says it had issued in error.
“I will be looking into this matter over the coming weeks and will be asking the Pentagon for answers,” Sen. Mark Warner, D-Va., said in a statement to Stars and Stripes. “When we ask our citizens to move overseas and support our armed forces we owe them a debt of gratitude, and must ensure they are treated fairly.”
Warner in a June 17 letter to Defense Secretary Chuck Hagel said that he supports the recommendations of senior U.S. military commanders, who have called on DOD personnel officials to grant blanket debt relief waivers for the civilian workers and reinstate Living Quarters Allowances.
Gen. David Rodriguez, head of U.S. Africa Command, is the latest four-star commander to call on DOD to do more on behalf of its overseas personnel, who accepted positions with the understanding that those jobs included housing allowances.
“I request your review, and if you deem appropriate, immediate assistance to reshape the decisions of the Acting Under Secretary of Defense for Personnel and Readiness on LQA erroneously paid to hundreds of civilian personnel at overseas locations,” Rodriguez wrote in a June 19 letter to Deputy Secretary of Defense Ashton Carter. “As currently formulated, those decisions will have a negative and lasting impact on our overseas commands.”
Gen. Philip Breedlove, head of U.S. European Command, and U.S. Forces in Korea chief Gen. James Thurman have made similar requests.
While DOD officials say they intend to support individual debt waiver requests filed by workers, it has stopped short of offering blanket waivers.
The Defense Department also has said that State Department regulations — which apply to DOD civilians — prevent it from extending housing benefits beyond a one-year extension already granted to provide workers time to make other living or work arrangements. However, a senior Defense Department official is now acknowledging that those regulations do contain an “unusual circumstances” clause that would make it possible for affected employees to continue working with the housing allowances they were originally promised. One reason that clause appears to have so far been unused is concern about public perception.
“While the DSSR [State Department regulations] grants the agency head discretion to authorize LQA due to unusual circumstances beyond the 1-year already granted, further authorizations could be viewed as an abuse of discretion with respect to taxpayer dollars being spent on incentives for which employees are otherwise ineligible,” the DOD official said in a statement sent to Stars and Stripes by DOD spokeswoman Cmdr. Leslie Hull-Ryde, who said the official could not be identified.
Acting Under Secretary of Defense for Personnel and Readiness Jessica Wright, “completely understands that the employees who erroneously received LQA, through no fault of their own, have made decisions based on it,” Hull-Ryde said in a statement. “Ms. Wright continues to closely monitor the situation by receiving updates from myriad sources, including combatant commanders. Ms. Wright and other senior leaders in the department are tracking this situation and are providing periodic updates to members of Congress.”
Military commanders, however, say the Defense Department’s plan to sever housing allowances after one year will end up costing the government more money in the long run. It also could hinder the missions of combatant commanders, according to the four-star generals who oversee U.S. military efforts in Europe, Korea and Africa.
“Cancelling these benefits will result in a $35[thousand]-$50,000 penalty per year to each of these valued employees,” Rodriguez wrote in his letter to Carter. “Most will likely depart the command, leaving gaps in talent and experience vital to mission accomplishment and I am concerned about the potential operational impact to United States Africa Command.
“Moreover, bringing suitable replacements on board will impose costs far greater than granting a one-time exception to policy to cover those employees, especially when newly-hired personnel will receive LQA.”
The erroneous payment of LQA came to light in late 2011 when Defense Department officials determined that scores of workers could be receiving housing benefits in error in connection with a reinterpretation of rules governing who is eligible for the allowance. Annual housing allowances range from $30,000 to $50,000. According to regulation, workers who received the benefits erroneously are required to reimburse the government, meaning many workers who have been overseas for several years are now indebted for six figure sums.
While critics argue that housing allowances are an excessive benefit, many employees say they would never have accepted overseas employment without the promise that housing costs would be subsidized.
Earlier this year, DOD conducted a department-wide audit of overseas payroll accounts to determine the scope of the problem and determined about 660 employees were receiving LQA erroneously.
In many cases, those people had worked for more than one employer overseas, an apparent violation of State Department regulations.
In May, workers were informed by their respective personnel offices about the results of the DOD audit. They began to mobilize, writing lawmakers with appeals for intervention.
Rep. Jeff Miller, R-Fla., in a June 10 letter to Hagel said the Defense Department should halt efforts to collect on past payments and “honor existing employment agreements to include fulfilling LQA and transportation allowance provisions… agreed to as a condition of their employment.”
While it remains unclear whether DOD intends to act on the recommendations of senior officers and lawmakers, Wright is advising employees to file their requests for waivers of indebtedness.
Some workers have been reluctant to do that, citing a requirement that they first sign a document stating they accept responsibility for the debt, which they fear could work against them if the matter were to go to court.
Rik Thibodeau, a Vicenza, Italy-based civilian who administers a Facebook page dedicated to fighting the LQA ruling, says his group of more than 400 has received numerous requests from Congressional staffers for access to the site to learn more about the situation on behalf of elected officials.
“I’m getting bombarded with requests from staffers almost daily and we’ve got [military] brass behind us now,” Thibodeau said. “We’re going to keep fighting this.”