370.592.1 - Foreign Differentials and Allowances

Date: 11/21/1989

OPR: Administration/Office of Personnel

1. General. The Department of State is responsible for issuing regulations, designating places, and prescribing rates for all foreign area differentials and allowances. The Department of State "Standardized Regulations (Government Civilians, Foreign Areas)" defines terms, cites authority for issuances by the Department of State (Section 040), and governs the administration of foreign differentials and allowances (Chapters 100500). Other pertinent references are:

A. Departmental Manual, 370 DM 591.

B. FPM Supplement 990-1, Chapter 59, subchapter III.

2. Foreign Post Differential.

A. Definition. "Foreign Post Differential" means the additional compensation of 10%, 15%, 20%, or 25% over basic compensation granted to eligible employees at foreign posts where the Department of State has determined that conditions of environment differ substantially from conditions of environment in the continental United States, that extraordinarily difficult living conditions or excessive physical hardships prevail, or that notably unhealthful conditions exist.

B. Places and Rates at Which Paid. Chapters 500 and 900 of the Department of State's "Standardized Regulations (Government Civilians, Foreign Areas)" specify the posts and the rates at which the differential is payable.

C. Eligibility Requirements.

(1) Employee must be a citizen or national of the United States.

(2) Basic compensation must be fixed by statute or administratively pursuant to law or in conformance with comparable Federal rates.

(3) Employment must be full time.

(4) Employee's presence in the foreign area must be due to their employment by the United States Federal Government. This includes but is not necessarily limited to the following classes of persons:

(a) Persons who were originally recruited from the United States and have been in substantially continuous employment by a United States firm, interest, or organization, an international organization in which the United States Government participates, or a foreign government, provided original recruitment included return transportation as a condition of employment.

(b) Persons who at the time of employment are temporarily present in the area concerned for purposes of travel or formal study and maintain residence outside the area during the period so present.

(c) Persons who are not normally residents of the area and who are discharged from the military service of the United States in the area to accept employment there with the Federal Government.

(5) Exceptions.

(a) The spouse of a person who is employed, stationed, or resident in the area will not be eligible to receive a differential when it is determined that the spouse is there primarily to be near such individual and not for the convenience of the United States Government.

(b) An employee recruited from outside the United States is not eligible for differential if they are a member of the household of another employee or of a member of the United States Armed Forces.

D. General Conditions of Payment. (For more specifics on conditions for payment see Department of State's "Standardized Regulations (Government Civilians, Foreign Areas))".

(1) Limitation on Payment. Foreign post differential is not paid for any time for which an employee does not receive basic compensation, such as non-workdays and time in a nonpay status.

(2) Commencement of Payment. Payment begins as of the date of arrival at the overseas post of regular assignment, or as of the date of assignment, if already at the regular post of assignment on detail or leave. In the case of local recruitment, payment begins upon entrance on duty. The differential is paid on a full-day basis.

(3) Termination of Payment. Post differential ceases the close of business on the following dates:

(a) Date employee begins travel at Government expense for:

(i) Transfer to a new post of regular assignment (United States or overseas).

(ii) Return to the United States for any purposes, e.g., leave, detail, consultation, separation, training. Exceptions: (1) Post differential continues for no more than 42 days when employee returns to the United States for detail or medical reasons, provided their spouse or an adult member of their family, 21 years or older, remains at the overseas post. (2) If leave is taken in a foreign area while en route to the United States, post differential ceases as of the date of arrival in the United States.

(iii) Emergency evacuation.

(b) Date of separation if separation occurs at the overseas post.

(4) Leave. Payment is made (except as indicated in (3)(a)(ii) above) for the first 42 consecutive calendar days of an employee's absence from the overseas post on leave, provided the employee returns to a foreign post. The differential is included in a lump-sum payment for annual leave when the employee's separation is effected at the foreign post.

(5) Base Pay. The differential is included in the base pay when computing overtime pay under the provisions of the Fair Labor Standards Act. It is not included in the base pay when computing (1) overtime pay under the provisions of Title 5 U.S. Code, (2) holiday pay, (3) night differential, (4) any other additional compensation or allowances, or (5) deductions for retirement, group life insurance, and health benefits.

(6) Tax Deductions. The differential is subject to deductions for Federal income tax and, if applicable, FICA tax.

(7) Details (See SM 370.300.8 for procedures.)

(a) A detail for purposes of differential is a temporary assignment or temporary duty (including temporary duty for consultation) at a post other than the employee's regular post of assignment.

(b) To be eligible for payment of differential at the post or at the rate prescribed for the post of detail, an employee must have served in a pay status on detail for 42 consecutive calendar days at one or more foreign or territorial differential posts. Thereafter, differential at the rate prescribed for the posts of detail is authorized for the remainder of the period of detail and is payable concurrently with authorized per diem.

E. Authorization for Payment.

(1) Operating officials are responsible for submitting the initiating documents for the differential payment.

(2) The Office of Personnel is responsible for determining the basic eligibility of an employee for foreign post differential.

(3) The Office of Financial Management is responsible for determining whether or not a differential payment is allowable and the rate. The Office of Financial Management will also ascertain the period during which payment can be made.

(4) Operating officials are responsible for notifying the Office of Financial Management of the arrival and the departure dates of employees on leave or detail from their posts.

(5) Employees are responsible for assuring that the date of arrival at the overseas post and the date of departure from the overseas post is shown on their Time and Attendance Report (Form DI-1840).

3. Foreign Allowances.

A. Definitions.

(1) Temporary Lodging Allowances (Department of State's Standardized Regulations, section 120). Means a payment made to cover reasonable daily costs of temporary lodging either (a) before residence quarters are acquired but not to exceed 3 months after arrival at a new post, or (b) upon vacating residence quarters but not to exceed 1 month immediately before departure from post.

(2) Living Quarters Allowance (Department of State's Standardized Regulations, section 130). Means a payment made to help defray the annual costs of an employee for their residence quarters, including expenses for certain utilities whenever Government quarters are not available. This is not paid concurrently with a temporary lodging allowance.

(3) Post Allowance (Department of State's Standardized Regulations, section 220). Means a payment made to compensate an employee when the cost of living (exclusive of quarters costs) at an overseas post is substantially higher than that in Washington, D.C.

(4) Supplementary Post Allowance (Department of State's Standardized Regulations, section 230). Means a payment made to offset the expenses because of the necessity of providing meals at hotels or restaurants because of the unavailability of quarters having kitchen facilities.

(5) Foreign Transfer Allowance (Department of State's Standardized Regulations, section 240). Means a payment made to offset in part the extraordinary and necessary expenses that are not otherwise compensated for upon transfer to a foreign post which is classified for the allowance.

(6) Separate Maintenance Allowance (Department of State's Standardized Regulations, section 260). Means a payment made when an employee is compelled or authorized to maintain any of their family elsewhere than in the country of assignment by reason of dangerous, notably unhealthful, or excessively adverse living conditions, or for the convenience of the Government, or in certain limited situations (subject to approval by the Bureau Personnel Officer) when employee requests such an allowance because of special needs or hardship.

(7) Education Allowance (Department of State's Standardized Regulations, section 270). Means a payment made to help defray the costs of an employee for the education of their children in the elementary and secondary grades.

(8) Educational Travel (Department of State's Standardized Regulations, section 280). Means payment of travel expenses for a child to a school in the United States from the employee's post (and return to the post) for secondary education (in lieu of an education allowance) and college education, once each way annually for each type of education, except as otherwise prohibited.

B. Permissible Allowances.

(1) For Classified Employees: All of the above listed allowances may be granted.

(2) For FC-grade Employees: Unless otherwise requested by the U.S. AID Mission for the country of assignment, the USGS usually grants separate maintenance allowance, post differential, cost of living allowance, and foreign transfer allowance.

C. Eligibility Requirement.

(1) Employee must be a citizen of the United States.

(2) The employee's official headquarters must be a foreign post.

(3) Employment must be full-time.

(4) Basic compensation must be fixed by statute or administratively pursuant to law or in conformance with comparable Federal rates.

(5) The employee's presence in the foreign area must be due to their employment by the United States Federal Government. This includes but is not necessarily limited to the following classes of persons:

(a) Persons who were originally recruited from the United States and have been in substantially continuous employment by a United States firm, interest, or organization, an international organization in which the United States Government participates, or a foreign government; provided original recruitment included return transportation as a condition of employment.

(b) Persons who at the time of employment are temporarily present in the area concerned for purposes of travel or formal study and who maintain residence outside the area during the period so present.

(c) Persons who are not normally residents of the area and who are discharged from the military service of the United States in the area to accept employment there with the Federal Government.

(6) Exception. An employee recruited from outside the United States is not eligible for foreign allowances if they are a member of the household of another employee or of a member of the United States Armed Forces who is stationed or resident in the foreign area.

D. Effect on Other Payment or Deductions.

(1) Allowances are not included in the base pay when computing overtime pay, holiday pay, night differential, foreign post differential, or deductions for retirement, group life insurance, and health benefits.

(2) Allowances are not subject to deductions for Federal income tax or FICA tax.

(3) Allowances are not included in a lump-sum payment for annual leave.

E. Limitation on Payment. Allowances will continue while an employee is in a nonpay status for not to exceed 14 calendar days at any one time unless otherwise provided in the Department of State's "Standardized Regulations (Government Civilians, Foreign Areas)."

F. Requesting Initial Allowance Grant.

(1) Form Used.

(a) Employee must submit, in triplicate, SF 1190, Foreign Allowance Application, Grant, and Report, to their operating Branch.

(b) Operating Branch must endorse the request and send all copies to the Office of Personnel.

(2) Supporting Documents.

(a) Request for temporary lodging allowance must be accompanied by evidence of daily costs which will be in the form of receipts or, if unavailable, a statement giving the cost and certifying payment therefor.

(b) Request for separate maintenance allowance based upon health factors or conditions must be supported by a statement from the attending physician or a ruling by a reliable medical authority. The SF 1190 must also show in "remarks:"

(i) Date of assignment to post.

(ii) Date travel to post began.

(iii) Date separated from dependents.

G. Revising and Terminating Allowance Grant.

(1) Employees Responsibility. The SF 1190 form must be submitted by the end of the pay period during which the following changes occur that require a revision in the applicable allowance grant.

(a) Family status change (applies to temporary lodging, living quarters, COLA, transfer, and separate maintenance allowances).

(b) Daily cost rate change (applies to temporary lodging allowance and SF 1190 must be supported by the receipts).

(c) Any change that affects education allowance grant.

(2) Operating Branch's Responsibility. By the end of the effective pay period, the operating Branch must submit to the Office of Personnel an SF 1190 to report the terminations of all allowances and the following changes:

(a) Reclassification of a post or change in allowance rates (applies to temporary lodging, living quarters, COLA, transfer, separate maintenance, and education).

(b) Grade change (applies to living quarters).

(c) Salary changes (applies to post). Exception: Revisions resulting from Pay Act adjustments are initiated by the Office of Personnel.

H. Authorizing Allowance Grant. The Office of Personnel authorizes the allowance grant and makes the following distribution of SF 1190:

(1) Office of Financial Management.

(2) Operating Branch.

(3) Office of Personnel.

I. Annual Report of Quarters Expenses. The Office of Personnel makes a annual report to the State Department by submitting a copy of the latest SF 1190 on file for each employee receiving a living quarters allowance.