U.S. Army Europe has quietly introduced rules that put tighter restrictions on how its civilian workforce can use housing allowances for personally owned homes, reducing the amounts of some payments in some cases and imposing a new commuting distance limit.
The changes have largely gone unnoticed since they were introduced in October, but some workers are learning of them as they try to access benefits they once had. They also mean more restrictions on civilians working for the Army than for other military services.
A major change is that living quarters allowance, known as LQA, can now only be applied to personally owned property when the home is purchased within the first year of an employee’s overseas assignment.
That gives an employee a small window to utilize the long-standing benefit and increases the odds that the workers will remain renters.
“It’s just not right that we, without notice, lose benefits from a new LQA policy that essentially benefits German real estate owners with our U.S. tax dollars,” said the Army civilian, who requested anonymity for fear of retribution and whose plans to purchase a home were scuttled because of the change.
USAREUR doesn’t necessarily save money with the change — it is still obligated to pay out housing allowances to those who are eligible.
“What’s happening now is they are taking benefits that were part of our original hiring agreement and in some cases the reason people took these jobs,” the Army civilian said.
USAREUR did not provide a clear explanation about what prompted the new restriction, saying that purchasing property in Europe is “complicated.”
When asked whether the policy change benefits local landlords more than U.S. workers, USAREUR did not answer the question directly. “LQA is an allowance the agency provides to eligible employees. They can use the allowance to purchase or rent within the prescribed policy,” USAREUR stated.
In another change, USAREUR has abolished the traditional payment scheme and set the allowance rate at the “amount owed” on the personally owned property, a move that could offer substantial savings to the government.
The annual rate previously had been set at up to 10 percent of the property’s purchase price.
For Derek West, a civilian with U.S. Africa Command, that change in calculation means his annual LQA payment has gone from $18,747 to $10,873 for his home. West, who has been in a long-running battle with the Army over his rate, said he was subjected to the change several years before the new policy even went into effect.
“They (the Army) can’t figure out how to pay civilians properly, and frankly, I think there is some willful misinterpretation of regulations going on,” West said. “They’re being flim-flam artists, trying to introduce ambiguity into an unambiguous calculation.”
USAREUR said the various policy changes in the 22-page regulation were part of a year-long review, staffed by its personnel office and eventually signed by German Brig. Gen. Kai Rohrschneider, USAREUR chief of staff.
USAREUR could not explain how it will go about calculating “amount owed” rates, saying it will be determined on a case-by-case basis.
U.S. Air Forces Europe, meanwhile, hasn’t made such a change and continues to use the payment model that has been in place for decades.
“LQA can be used for personally owned quarters purchased anytime during one’s tour; individuals are not limited to a purchase within the first year,” said Auburn Davis, a spokeswoman for U.S. Air Forces Europe and Africa.
West said USAREUR’s new policy confuses what was once simple.
“USAREUR and the (Office of Personnel Management) have teamed up to invent a new way of calculating annual rent cost called ‘amount owed’ or ‘actual cost remaining,’” West said. “Determining those amounts will involve loads of documentation covering loan amounts, interest amounts, fees and mortgage payment.”
None of the changes apply to active-duty soldiers or the Army’s civilian senior executive service. The changes won’t affect other services or nonappropriated fund agencies, which have their own guidelines.
For decades, civilians eligible for LQA have been permitted to use the allowance if they decide to purchase a home at any time during their tenure. The benefits were designed as a recruiting incentive, helping to attract U.S. workers to posts overseas, where salaries have generally been lower and costs of living frequently higher.
However, critics of the allowances have said the payments are too generous and costly. The allowances also have been a source of inter-office tension at times. Not all overseas civilians receive LQA — eligibility is based off State Department regulations.
Housing allowances vary, but generally range anywhere from $20,000 to $50,000 depending on location, pay grade and rental choices. A 2015 Government Accountability Office report said the Defense Department spends about $504 million on LQA for 16,500 civilian employees overseas.
Additional USAREUR changes also require employees to live within 50 miles of their post of assignment, though employees living farther away prior to the policy change will not be affected.
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