On my YouTube channel I’ve made some videos talking about my experience as a US federal employee and getting a job working for the military overseas. One of the videos goes over the incentives and allowances I got offered for my position. In this post, I’m going to go into detail (lots and lots of detail) about the living quarter’s allowance (LQA).
My previous videos were me talking a lot at the camera and I didn’t want to do that this time. I’m not a big fan of talking videos unless they have some funny stuff going on to make it engaging and I’m just not at the point in my YouTube videos.
To start, what is the LQA? The LQA is an incentive offered to federal employees who are hired from the US to leave and come to a foreign area to work for the military. It is meant to cover the cost of housing, utilities, and sometimes additional items like if you have to pay for a parking spot at your home. The LQA is different from what active duty gets, basic housing allowance or BHA because active duty has an entitlement to housing from the military. The entitlement is either provided housing on base that meets a certain standard by rank and family size. Or the equivalent cash to pay for housing off base.
BHA is a set amount each month. LQA is a fluid amount that is determined on a case-by-case basis. The rules around how the LQA is set up is so that it only pays for housing, and nothing else. For example, let’s say I initially set up my LQA agreement with HR to say I am single living alone. But then I decide I want a roommate. I am required to let HR know of my changed status so that they can reduce my LQA based upon the presumption that the roommate will now pay for half the housing costs. The key to understanding the difference between BHA and LQA is that the former is an entitlement and the latter is an incentive.
How much will my LQA be? Since LQA is determined on a case-by-case basis this question can only be answered in broad strokes until you sit down with your HR. First, you figure out what your housing group is.
Next you find the LQA max amount for your country, area, housing group, and if you are with or without family. Note, this amount fluctuates every two weeks and is set by the state department.
This max amount is an annual amount. So all you have to do is divide it by 12 months and that’s how much you can spend on rent, right? Oh, no. Nothing is that simple when dealing with money from the federal government.
In Japan, it is standard to have to pay move-in fees. These are paid by you up front and then reimbursed back to you through your LQA and has to be figured into the worksheet. What worksheet you ask? I got this really good excel worksheet from my HR once I talked to someone who could give me a detailed answer. The worksheet is basically the max amount converted to yen. Then input the monthly rent and the fees. Multiply the monthly rent by 12 to get an annual amount and subtract that from the max amount. Also subtract out the fees. What is left is what you have to spend on utilities.
Side note, this is only for year one. At the 12 month mark of receiving LQA you’re going to do an audit and these fees will have been paid back to you and they will be taken out of the equation. More on that in a bit. And until you get an approved LQA amount from HR, this is only an estimate.
So as you look at properties through the base housing office with realtors from out in town you get a description sheet of the property with all of these amounts. You can plug them into the worksheet that you made. Make sure to adjust the max LQA and the exchange rate as they change in real life.
Housing Office vs. Human Resources
The Housing Office on base is not going to be super helpful with LQA questions because they don’t deal with it. They handle BHA only. So make sure to go to human resources. And if you have a situation like mine where you have someone just showing the housing group chart and the Office of Allowances website, find someone else to talk to who can give you better, more detailed answers.
Does my LQA change every 2 weeks?
A common misconception among the GS employees who receive LQA that I have talked to is that their LQA fluctuate each paycheck. I asked my HR about that and the answer is no, it does not fluctuate . When you sign the LQA agreement with HR there is a statement that says
“LQA is computed and paid bi-weekly by the DFAS system based on the exchange rate for that pay period. Calculation method is as listed. Annual LQA rent & utility / 365/366 days x 14 days to obtain bi-weekly amounts.”
Another way to put it, is that the agreement is to get to you a certain amount of Yen (or currency of your country) to pay your housing costs. But the US Gov doesn’t pay in anything other than US Dollar. So the US Dollar amount in your paycheck is the Yen equivalent based upon the DFAS exchange rate for that pay period. As the exchange rate fluctuates so does the dollar amount you are paid.
Utilities
At the time you initially sign the LQA agreement with HR you have to estimate the cost of heat, electric, kerosene, etc. At the annual audit you bring all of those receipts and if you were overpaid LQA then you have to pay back that difference. What? Wait, What?? Yes, welcome to dealing with the US Gov. LQA is an incentive that is designed to pay for exactly what it costs to house you and not a penny more.
At the annual audit your utilities for the rest of the time that you receive LQA is then set to the actual amount. If you are receiving LQA for 3, 5, 10, or in some cases, 20 years the utilities from the first year is the fixed amount.
Now this is the part where I am going to say the thing out loud. The way you can, ahem, ‘make money’ off of the LQA is to artificially inflate your utilities bill. I mean, make those suckers as expensive as possible. AC on all day and night. Same for heat in winter. Open the windows and keeps those puppies on. Make those bills as skyrocket high as you can. Then you do that audit with those super high bills. And from year two onward, be frugal in your use of utilities. And you can then pocket the difference.
I first heard of this grift by a white male GS employee who advised me to do this. He acted like it was the most normal thing in the world to do. That it was completely legit and of course you should try to make money off of the LQA. To quote him, he said “Why aren’t you running up your utilities bills?” The difference between him and everyone else who isn’t a white male is that when I get caught I get punished. White men don’t have much sense of accountability because in a system made by white men for white men, the government employee system included, they get a slap on a wrist while the rest of us actually face consequences. To be clear, I do not participate in this fraud. And I do not recommend any one else should participate in this fraud. If you have someone advising you to participate in this fraud because “everyone does it”, do not take their advice. Especially if it’s a white male acting like no consequences will ever come from doing this thing.
Consequences for Fraud or Misuse
If you get caught AND held accountable for doing the utilities grift or any other attempt to ‘make money’ off of the LQA the consequences are that
1. You lose the LQA
2. You have pay back what the investigation determines you intentionally and unlawfully defrauded the government out of.
3. You may lose your job.
4. You may lose your travel agreement and have to get yourself and your stuff back to the US on your own dime.
Can you get LQA if your hired in-country of service?
No. The person receiving LQA has to be in the US, or specifically, in a non-foreign area, in order to qualify for LQA. This is because this is an incentive to entice folks to make the trip to leave the US and go to a foreign area. The instruction regarding LQA that applies to my situation is that once I reach the max amount of time that I am allowed to be overseas working I then have to go back to a non-foreign area for a minimum of two years. After the 2-yr cooling off period I can then re-apply for another GS position for the DoD in a foreign area.
Not all LQA recipients have the exact same rules
Now keep in mind, that there are many different type of civilian employees working overseas and each has a slightly different rule book. A non-appropriated fund employee has different rules from the appropriated fund employee and a US Navy employee like myself has a different rule book than the Dept. of Education employee teaching at on-base schools. You can get the details from your HR rep.
Hope that info was helpful. Good luck if you’re also looking to becoming a US gov. employee. If there are any questions you guys have feel free to comment and I will do my best to answer or maybe make another post. Such as one person asked about getting one of these jobs, so my next project will be How to Job Search on USAJOBS.gov
Cheers!!
This is excellent information! The piece of the puzzle that I've been trying to look for is what "max" housing rate are they using as part of the formula to come up with the annual US rate each pay period. For example in Europe, the bi-weekly rate is ($)31,000, which should be [(Max Utilities €XX + Max Rent €XX) * exchange rate]. I want to know what the max Euro rate for just Rent is so I can gauge what my max expenses should be in Euro so I don't come out of pocket (above the LQA rate). So far, none of my calculations using the exchange rates come up with a commonality of an equivalent Euro rate.