# 2012-097 Pay and Benefits, Home Equity Assistance Program (HEAP)

Case Summary

F&R Date: 2012–09–26

The grievor suffered a loss of $76,000 on the sale of his principal residence upon being posted from Alberta to Ontario. He was reimbursed $15,000 in home equity assistance (HEA) together with the balance from his relocation funding envelopes, pursuant to the provisions of the Canadian Forces Integrated Relocation Program (CF IRP). As a result, his net loss was $53,900.39. The grievor made a submission to his CF Relocation Coordinator to have his loss designated as "reasonable expenses resulting from exceptional circumstances" in accordance with sections 1.3.02 and 2.1.01 of the CF IRP and requested that his file be forwarded to the Treasury Board Secretariat (TBS) for approval.

The grievor's request for 100% HEA was denied by the Director Compensation and Benefits Administration (DCBA) on the basis that the location of the principal residence was not deemed a depressed market area as required in order to receive reimbursement pursuant with section 8.2.13 of the CF IRP.

In his grievance, the grievor acknowledged that he did not meet the requirements set out in section 8.2.13 of the CF IRP, but maintained that the equity loss he incurred represented reasonable expenses resulting from exceptional circumstances and as such, should be reimbursed in full upon approval of TBS.

The Board acknowledged that the grievor suffered a substantial loss and that, unfortunately, as the grievor himself admitted, the drop in his community was less than 20%, thus disqualifying his case from being referred to TBS under section 8.2.13 of the CF IRP.

The Board noted that the grievor's loss could not reasonably be said to arise from exceptional circumstances as set out in section 1.4 of the CF IRP which defines "exceptional circumstances" as "rare" and "unforeseen"; without by any means diminishing the impact of the grievor's loss, the Board was of the view that there was nothing rare or unusual in the circumstances described by the grievor other than the amount in question. As well, the Board noted the term "expenses" is defined in section 1.4 of the CF IRP as "the amount of money spent in order to purchase an item or service" which was not the case here as the grievor suffered a loss.

The Board found the grievor regrettably did not meet the requirement for additional compensation under the current HEA policy.

Notwithstanding, the Board stated it did not endorse the current provisions of the CF IRP in respect of HEA and acknowledged the inadequacy of the current scheme. The Board noted that the grievor suffered a very large financial loss in spite of a policy designed to protect against the detrimental effects of the housing market and the Board pointed out that it has seen a series of these cases over the last number of months, sometimes involving greater sums than is the case here.

The Board noted that the CF IRP 2013 Policy Manual is currently undergoing review and re-write in consultation with TBS; the Board expressed the hope that a far more sensible and generous policy will be developed so that members are not in financial distress as a result of being relocated for service reasons.

The Board recommended that the Chief of the Defence Staff deny the grievance.

CDS Decision Summary

CDS Decision Date: 2013–04–22

The CDS agreed with the Board's findings and recommendations that the grievance be denied. Section 1.3.02 of the CF IRP 2009 recognizes that there will be situations when exceptional circumstances may occur that was not already envisioned in the policy. In the grievor's case, the loss of home equity was covered by section 8.2.13 of the CF IRP 2009. In this case, the grievor did not suffer a 20% decline in housing costs as required by the disposition.

The CDS reiterated his endorsement to the Board's systemic recommendation in previous cases that the HEA provisions be reviewed.