The State Department Spends $500M Annually on Perks for Employees Overseas

Families can earn up to $1,300 for miscellaneous expenses such as pet relocation. Families can earn up to $1,300 for miscellaneous expenses such as pet relocation.

The State Department has spent $480 million annually on more than a dozen allowances for its employees stationed overseas over the past six years, according to a new report.

About 70 percent of that spending went toward paying for the education of the children of State employees, hardship pay for employees in places “where conditions of environment differ substantially from those in the United States” and post allowance for employees in areas where the cost of living is “substantially higher” than Washington, D.C., the Government Accountability Office found.

About half the payments were for what State qualifies as cost-of-living allowances, which includes post and education reimbursements as well as costs such as maintaining two separate households for employees away from their families, while 36 percent went toward recruitment and retention incentives. Only 5 percent went toward paying for living quarters and other expenses when government housing was not available.

Other allowances were more obscure and less costly. Employees who travel across two climate zones for a foreign assignment are entitled to a “wardrobe expense.” Families can earn up to $1,300 for miscellaneous expenses such as pet relocation. Foreign nationals or family members of State employees abroad are eligible for a “representation allowance” to cover costs related to “establishing and maintaining relationships of value to the United States,” such as through entertainment or “customary gifts or gratuities.”

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Some of the allowances can be quite significant. Hardship pay boosts employees’ salaries by 5 to 35 percent above their basic compensation, while danger pay—for those in areas with civil insurrection or wartime conditions—ranges between 15 and 35 percent. State will pay up to $23,000 to employees in areas where it is too dangerous to bring their families.

State spent a total of $2.9 billion on 14 allowances between fiscal years 2011 through 2016, GAO found. Variances in costs from year to year were caused by issues ranging from the number of dependent children overseas to increased volatility during the Arab Spring. The department makes adjustments to employees' pay when they temporarily leave dangerous areas, a process which GAO found in a September report was “resource intensive” and led to $2.9 million in payment errors.

Below is a map from GAO showing State’s spending on post allowance—the benefit measured by cost of living compared to Washington—by country over the same six-year period.

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