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An Agency for International Development (AID) employee elected to receive extra service credit in lieu of post differential payments he was entitled to. At his retirement, the Department of State advised him that he could not receive the credit, since State had not designated the post as unhealthful. GAO held that: (1) AID erroneously discontinued the employee's payments without determining whether State had designated the post as unhealthful; (2) under the applicable statutes and regulations, the employee was entitled to receive either the post differential or extra service credit; and (3) the Meritorious Claims Act barred any claim for the post differential, since it was more than 6 years after the date the claim first accrued. Accordingly, State should grant the employee extra service credit if AID can provide sufficient documentation for State to retroactively designate the post as unhealthful.

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