Letterhead for the Office of the Under Secretary of Defense
October 20, 2008




MEMORANDUM FOR: SEE DISTRIBUTION
SUBJECT: Clarification of Memorandum Regarding Benefits, Allowances and Gratuities for
                  Department of Defense (DoD) Civilian Employees Assigned to Iraq or Afghanistan
                  Under the Authority of Section 1603 of Public Law (P.L.) 109-234, as amended


References:
  1. "Benefits, Allowances and Gratuities for Department of Defense (DoD) Civilian Employees under [P.L.] 109-234, Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, June 2006", May 4, 2007
  2. "Clarification to Policy Memorandum, 'Benefits, Allowances and Gratuities for Department of Defense (DoD) Civilian Employees under [P.L.] 109-234, Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, June 2006', dated May 4, 2007", August 27, 2008
  3. "Death Benefits for Department of Defense (DoD) Civilian Employees under [P.L.] 109-234, Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery", April 3, 2007

                  Section 1603 of P.L. 109-234, "Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery," authorizes agencies to provide employees on official duty in Iraq or Afghanistan benefits, allowances, and gratuities comparable to those provided to members if the Foreign Service under Section 413 and chapter 9 of title I of the Foreign Service Act (22 U.S.C. 3973; and 4081 et seq.). Under this authority, as set forth in references (a), (b) and (c), attached, DoD has been providing various benefits, allowances, and gratuities to certain DoD civilian employees performing official duty in Iraq and Afghanistan.

References (a), (b), and (c), however, indicate that the authority provided by Section 1603 would expire at the end of fiscal year (FY) 2008. Recently, Section 1603 of P.L. 109-234 was amended by Section 1102 of P.L. 110-417, the "Duncan Hunter National Defense Authorization Act for [FY] 2009," to continue the authorization of these same benefits, allowances and gratuities through the end of FY 2011 for employees on official duty in a combat zone as defined by Section 112(c) of the Internal Revenue Code of 1986. Iraq and Afghanistan are currently designated as combat zones for this purpose, which is commonly known as the "combat zone tax exclusion (CZTE)"(although the reference in Section 1603 to Section 112(c) of the Internal Revenue Code should not be interpreted to imply that civilian employees are now eligible for the CZTE; they are not).

As a result of this amendment to Section 1603 of P.L. 109-234, the benefits, allowances and gratuities that are the subject of references (a), (b) and (c) shall continue as provided for in the referenced memoranda until further notice as long as Iraq and Afghanistan are designated as combat zones under Section 112(c) of the Internal Revenue Code, or through the expiration of FY 2011. The continuation of these benefits, allowances and gratuities as a result of the amendment in the FY 2009 NDAA is, in effect, retroactive to October 1, 2008


// signed//
Patricia S. Bradshaw
Deputy Under Secretary of Defense
Civilian Personnel Policy


Attachments:
As stated

A. USD(P&R) Memo of May 4, 2007
B. USD(P&R) Memo of Aug 27, 2008
C. USD(P&R) Memo of Apr 3, 2007




DISTRIBUTION:
ASSISTANT G-1 FOR CIVILIAN PERSONNEL POLICY
      (DEPARTMENT OF THE ARMY)
DEPUTY ASSISTANT SECRETARY, CIVILIAN HUMAN
      RESOURCES (DEPARTMENT OF THE NAVY)
DIRECTOR, PERSONNEL POLICY
      (DEPARTMENT OF THE AIR FORCE)
DIRECTOR FOR MANPOWER AND PERSONNEL (j1)
      (JOINT CHIEFS OF STAFF)
DIRECTOR, PERSONNEL AND SECURITY
      (DEPARTMENT OF DEFENSE INSPECTOR GENERAL)
DIRECTOR, HUMAN RESOURCES MANAGEMENT
      (DEFENSE COMMISSARY AGENCY)
CHIEF, HUMAN RESOURCES MANAGEMENT DIVISION
      (DEFENSE CONTRACT AUDIT AGENCY)
CHIEF, CIVILIAN PERSONNEL DIVISION
      (DEFENSE THREAT REDUCTION AGENCY)
DIRECTOR, CIVILIAN HUMAN RESOURCES MANAGEMENT
      (UNIFORMED SERVICES UNIVERSITY OF THE HEALTH SCIENCES)
DIRECTOR FOR HUMAN RESOURCES
      (NATIONAL GUARD BUREAU)
DIRECTOR (CIVILIAN PERSONNEL MANAGEMENT SERVICE)
DIRECTOR FOR CORPORATE RESOURCES
      (DEFENSE FINANCE AND ACCOUNTING SERVICE)
DIRECTOR, MANPOWER PERSONNEL AND SECURITY
      (DEFENSE INFORMATION SYSTEMS AGENCY)
CHIEF, OFFICE FOR HUMAN RESOURCES
      (DEFENSE INTELLIGENCE AGENCY)
DIRECTOR, HUMAN RESOURCES OFFICER
      (DEFENSE SECURITY SERVICE)
EXECUTIVE DIRECTOR, HUMAN RESOURCES
      (DEFENSE LOGISTICS AGENCY)
DIRECTOR, HUMAN RESOURCES
      (NATIONAL GEOSPATIAL-INTELLIGENCE AGENCY)
DIRECTOR, HUMAN RESOURCES SERVICES
      (NATIONAL SECURITY AGENCY)
PERSONNEL DIRECTOR
      (DEPARTMENT OF DEFENSE EDUCATION ACTIVITY)
DIRECTOR FOR HUMAN RESOURCES
      (WASHINGTON HEADQUARTERS SERVICES)
EXECUTIVE DIRECTOR, HUMAN RESOURCES
      (DEFENSE CONTRACT MANAGEMENT AGENCY)