# 2021-043 Pay and Benefits, Home Equity Assistance Program

Home Equity Assistance Program (HEAP)

Case summary

F&R Date: 2021-05-28

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 relocated from Cold Lake, Alberta in August 2019. The grievor's home in Cold Lake sold in June 2019 with an equity loss of approximately $55,000. The grievor was reimbursed $30,000 from the Core funding envelope. The grievor argued that the wording of the HEA benefit entitles them to the reimbursement of the full amount of their home equity loss. 

The Initial Authority (IA), the Director General Compensation and Benefits, found that on 17 July 2018, the Treasury Board Secretariat (TBS) declared that houses sold in Cold Lake after 18 April 2018 would be subject to the revised version of the CFIRP Directive HEA policy, which no longer contained the depressed market benefit. The IA denied the grievance, finding that the grievor's home sold after 18 April 2018 and could therefore not be administered under the previous CFIRP version. 

The Committee first found that the wording of the revised HEA benefit entitles Canadian Armed Forces (CAF) members to be reimbursed the full amount of their equity loss, but that reimbursement above the $30,000 maximum from the Core envelope was dependent on the funds available in the Custom and Personalized envelopes. 

The Committee noted 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 CAF was to address catastrophic home equity losses using a “caveat” found in the CFIRP. DCBA staff later advised the Committee that the “caveat” referred to was the CFIRP article 2.1.01. The Committee found that CFIRP article 2.1.01 did apply 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 reduce the benefit received by the grievor. Noting that the matter is governed by the Income Tax Act, the Committee recommended that the CAF and TBS pursue a reduction in this tax burden on military members. The Committee 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.

FA decision summary  

The Chief of the Defence Staff (CDS) agreed with the Committee's findings and recommendation to afford the grievor redress. The CDS found that there was no vested right afforded to CAF members such as the grievor who sold their home after the 19 April 2018 deadline. Since the CDS was unable to grant redress, he directed that Chief of Military Personnel (CMP) ensure the grievor's request for 100% reimbursement of the loss of equity from the sale of her residence in Cold Lake be submitted to TBS for approval with his full support. The CDS reiterated that he has already directed CMP, in cooperation with TBS, to review CFIRP HEA provisions with an aim to implementing some form of catastrophic loss protection and, in doing so, minimize the negative impacts on CAF families. This should include a discretionary mechanism to deal with undue financial hardship in unique situations, such as the grievor's. Barring this, and anticipating limited flexibility to address the lack of a catastrophic loss clause, the CDS would offer that, in future, should losses over $30,000 be anticipated by a CAF member, that a member's branch leadership should be mandated to explore and implement alternate Active Posting Season courses of action to negate the potential for long-term financial impact to the CAF families, to include remote virtual work potential as well as possible posting cancellations. As indicated by the CDS, these means, while not optimal, are within the CAF's capacity to influence. The CDS directed CMP to investigate a mechanism through which to implement this CAF-centric approach quickly, be that through a CANFORGEN or similar order to ensure rapid, consistent implementation throughout the CAF

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