# 2022-022 Pay and Benefits, Home Equity Assistance Program

Case summary

F&R Date: 2022-07-27

On 19 April 2018, revisions to the Canadian Forces Integrated Relocation Program (CFIRP) Directive came into effect, removing the option to apply for 100% Home Equity Assistance (HEA) reimbursement from the Core envelope for homes sold in a depressed market area. The grievor's home in Cold Lake sold in June 2020 with an equity loss of approximately $170,000. The grievor was reimbursed the $30,000 maximum from the Core funding envelope and argued that the 2018 changes to the HEA benefit were unfair and caused significant financial hardship.

The Initial Authority, the Director General Compensation and Benefits, was unable to render a decision within the four-month time limit and the grievor chose to forward the grievance to the Final Authority.

The Committee first considered whether the grievor had a vested right to be administered under the previous CFIRP Directive but found that the house would have had to have been sold before 19 April 2018 in order to have locked-in that vested right.

The Committee cited an interview given by the Director of Compensation and Benefits Administration (DCBA) to the Canadian Broadcasting Corporation in May 2018, where the DCBA stated that the intent of the Canadian Armed Forces (CAF) was to address catastrophic home equity losses using a “caveat” found in the CFIRP. DCBA staff later advised the Committee that the “caveat” was the CFIRP article 2.1.01. The Committee found that CFIRP article 2.1.01 applied to the grievor's case given that the expense was directly related to the relocation and the extent of the equity loss was exceptional in nature.

The Committee also observed that taxation of the current $30,000 HEA maximum reimbursement from Core serves to further reduce the benefit received by the grievor. Given that taxation is governed by the Income Tax Act, the Committee recommended that the CAF work with the Treasury Board Secretariat (TBS) to pursue a reduction in this tax burden on military members. The Committee also recommended that the Final Authority direct DCBA to forward the grievor's claim for full reimbursement of the equity loss to TBS, with the full support of the CAF.