European Stars and Stripes (Newspaper) - August 16, 1991, Darmstadt, Hesse                                Vol. 50. No. 125 Friday August 16,1991 authorized unofficial publication for the . Armed forces35 d 8693 a 1 by Amy Geiszler Jones . Bureau child care fees will go up about 10 percent by oct. 1 a military child development centers worldwide to cover employee pay raises the department of defense has ordered. In revamping the fee stricture the defense department has changed the income ranges added a fifth income category and raised individual category fees. It also has built in a provision to allow some bases to charge even higher fees so that centers can pay higher wages to attract qualified workers in highly competitive labor markets. Under the military child care act of 1989, which brought about the income based fees the defense department will annually review and if necessary revise the fees. The uniform income based fees were first implemented last year with some centers converting to the Price Structure before the oct. 1, 1990, deadline Given in the act. Previously prices varied from installation to installation and most patrons at a specific Center paid about the same fees regardless of income. The upcoming increase reflects both the january 1991 and expected january 1992 pay raises of 4.2 percent for government employees which include child care assistants according to Bruce Mcintosh a Safe a chief of morale welfare and recreation operations. A second fee Range called optional High Cost care has been introduced into see Gar on pane 9 irs agrees to refund by Chuck Vinch Washington Bureau Washington a the internal Revenue service has conceded defeat in a six year Legal Battle Over whether housing and Cost of living allowances paid to defense department civilians overseas Are subject to social Security and medicare taxes. In a letter dated aug. 1, the irs informed the defense finance and accounting service that it would not take the Case to the supreme court following a Federal appeals court ruling. In March that said the taxation is improper. That decision clears the Way for the defense department to reimburse its More than 50,000 overseas civilian employees a and Many others who left Federal service while the Case dragged on a for millions of dollars in taxes that have been withheld on allowances since 1985. A we re really pleased that this is finally settled that the withholding will Stop and that the Money will be refunded Quot said a Sandra Vickstrom a spokeswoman for the overseas education association the plaintiff in the court Case. Notices will go out this week to overseas payroll offices advising them to cease the withholding of tax said Kay Drews Dias Deputy general counsel. Dias and Revenue service officials to Dod civilians will soon meet to work out the process for issuing refunds to employees. No Date has been set for that meeting and Drews could not say How Long it would take for employees to receive refunds. A it s going to be a Complex process Quot Drews said. A there Are thousands of employees several payroll offices plus several irs regional offices that Are going to be involved in  she also could not say what the total amount of the refunds or the average individual refund might be. But Richard him a Washington lawyer representing the overseas education association in the Case estimated that average individual refunds could total More than $300 per year with Softie going As High As $2,000 per year. Employees covered by the Federal employee retirement system created in 1983 have had their allowances taxed for social Security and medicare at an annual rate of 8.51 percent. Those covered by the old civil service retirement system have had their allowances taxed for medicare Only at a rate of 1.45 percent a year. Dias will handle refunds Only for those employees who signed consent forms allowing defense officials to file Blanket refund claims on their behalf in see taxes on Page 2 Home at last former hostage Edward Tracy gives his daughters Margaret left and Monica a hug outside the veterans administration medical Center in Boston. The three arrived in the United states from Rhein main a Germany on wednesday. Tracy will undergo full medical and psychological testing. See Story on Page 3. , chief says Deal on hostages May take weeks Geneva apr tempering Hopes for a Quick release of Western hostages . Secretary general Javier pm Rede Cuellar said thursday that he remains optimistic the crisis will be resolved but that it could take weeks. Speaking to reporters Perez de Cuellar said he was awaiting reaction from the lebanese kidnappers to israelis demand for solid information on the status of seven israeli servicemen missing in Lebanon for years. The seven Are the key Issue in talks to work out a reported Trade of the 11 remaining Western hostages and the israelis for hundreds of Arab detainees held by Israel. A there will be no gestures before we receive reliable Clear and unequivocal information about our missing prisoners. We will not be moved or give in to any pressure a israelis Lead negotiator Uri Lubiani said thursday but Lubiani also said Israel is a very very ready to help once information is Given on the missing servicemen. A Radical palestinian Leader said three of the missing israeli soldiers Are alive and four Are dead. P6rez de Cuellar said earlier that if that Issue could be settled a almost everything would be  president Bush appeared pleased with recent efforts to break the hostage deadlock. A sounds like flexibility on All sides Bush said thursday in Kennebunkport Maine where he is vacationing. S.ecreary8ereral and israeli negotiators predicted wednesday that High profile talks would give Way to quiet diplomacy after a hectic week that brought the release of three Western captives. Israeli negotiators met with the . Secretary general wednesday. Asked when the hostages might be released Perez see hostages on Page 2