# 2012-006 - Debt Relief in Cases Where Separation Expenses Were Paid in Error, Imposed Restriction (IR), Recovery of...

Case Summary

F&R Date: 2012–03–30

In 2011, the grievor was notified that he had to reimburse more than $100,000.00 in separation expenses (SE) that he had received in error since a posting in 2004. However, he was required to repay only the amounts since 2005 because the amounts received prior to that date were prescribed.

In his grievance, the grievor claimed that all his requests for imposed restrictions (IR) had been submitted and accepted in good faith. In his view, his IR status was authorized at a time when his personal situation was known to the Canadian Forces (CF) and he should not be obliged to reimburse the SE paid to him. By way of redress, the grievor asked that his debt be written off.

The Board first pointed out the importance of understanding the difference between IR and SE and explained that IR status had been granted in order to provide CF members some flexibility in managing the disruptions caused by relocating dependants when being deployed. The Board was of the opinion that when IR is authorized, the CF expects that the member and his family will eventually be reunited at the new place of duty. The Board added that the decision to authorize IR is discretionary and, contrary to what has been suggested in certain CANFORGENs, IR is not a benefit and does not automatically entitle members to SE.

In the Board’s view, the interpretation and application of SE described in CANFORGEN 080/99 (Imposed Restriction Policy) and CANFORGEN 019/05 (Amendment to Imposed Restriction Policy), were incorrect. In addition to quoting the Compensation and Benefits Instructions (CBI) 209.997 – Separation Expense, those two messages added two situations offering access to an IR, including one in which it would not be in the family’s interest to relocate. Moreover, these same messages drew a direct link between the IR and SE in a way that led many officials, including Career Managers (CM) and CF members, to understand that authorizing IR status automatically made one eligible for SE.

The Board was of the opinion that the grievor’s situation met none of the criteria set forth at paragraph 209.997(5) of the CBI and entitling him to receive payment of SE. In fact, according to the grievor and the information on file, between 2004 and 2007, the grievor was never reunited with his dependants during his postings. The Board therefore concluded that the grievor was never entitled to receive SE, even though IR status was authorized on four occasions.

However, the Board looked at the possibility of the Crown erasing the grievor’s debt so that it would not be recovered. The Board noted that certain federal laws expressly give the Minister authority to remit an overpayment, but that the National Defence Act does not contain such a provision. However, as noted in past cases, the Board was of the opinion that the provisions of section 23 of the Financial Administration Act (FAA) apply to the debts of serving CF members.

The Board conducted a detailed review of the policies and guidelines used by other government agencies to enable them to determine whether a remission order should be drafted and submitted to the Governor in Council (GIC). Specifically, the Board noted that the Canada Revenue Agency (CRA) specifies in its guide that a remission order may be recommended if, among other things, the debt involves extreme hardship or incorrect action or advice on the part of CRA officials. The Board also noted that it took seven years for the CF authorities to realize their mistake. In the circumstances, the Board was convinced that the grievor should not suffer from CF errors in administering and managing the SE and that the burden of this responsibility lies solely and exclusively with the CF.

The Board recommended to the Chief of the Defence Staff (CDS) that the grievance be upheld.

The Board recomended that the CDS order Departmental authorities to prepare a submission (supported by the Minister of National Defence (MDN)) to Treasury Board (TB) requesting the remission of the grievor’s debt under section 23 of the FAA. The Board also recommended that, in the meantime, no recovery actions against the grievor should proceed until a decision has been rendered.

The Board was also of the opinion that, based on previous CFGB cases in which this problem surfaced, it appeared that there was a recurrent problem arising from an improper application of the CBIs and caused by the two CANFORGENs mentioned above, that is that CMs authorized successive IRs “in the best interest of the family”, a criterion absent from CBI 209.997. The Board consequently recommended that the CDS order an audit in order to identify all IR postings authorized by CMs in which SE was paid since implementation of CANFORGEN 019/05, and all CF members who have received SE in error.

The Board recommended that, once the magnitude of the problem was known, the CDS order the preparation of a general remission order by the appropriate CF authorities, for submission to the GIC, with the support of the MDN and TB.

CDS Decision Summary

CDS Decision Date: 2013–04–22

The CDS agrees with the recommendation of the Board that the grievance be upheld, but for different reasons.

The CDS agrees with the Board that IR status does not automatically entitle members to payment of SE. The CDS agrees with the Board that the grievor meets the criteria for entitlement set out in CBI 209.997(2)(b) for the first posting, but unlike the Board, the CDS is of the opinion that the grievor continued to be entitled to SE during his subsequent postings. Whereas the Board interpreted CBI 209.997(2)(b) as meaning that the dependant should normally remain with the member at each place of duty where he is posted, the CDS concluded that the same provision did not indicate that the period of entitlement to SE was equivalent to the duration of a posting. Rather, the CDS is of the opinion that, in the context of CBI 209.997(2)(b), this means that the dependant would have normally stayed with the grievor at his various places of duty, were it not for specific criteria set out in CBI 209.997(5). The CDS concluded that the grievor's situation met one of these criteria, that is to say, financial disruption caused by the interruption of the spouse's employment. He therefore ordered the Director Military Careers Administration and Resource Management to repay the SE recovered and those to which the grievor would have been entitled.

The CDS did not concur with the systemic recommendation of the Board that he identify all CF members who received SE in error since implementation of CANFORGEN 019/05 and that he order the preparation of a general remission order for submission to the Governor in Council, with the support of the Minister of National Defence and TB.