# 2021-213 Pay and Beneftis, Home equity assistance program

Case summary

F&R Date: 2021-12-13

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 June 2017. The grievor's home in Cold Lake sold in June 2020 with an equity loss of approximately $250,000. The grievor, reimbursed the $30,000 maximum from the Core funding envelope, argued that the 2018 changes to the HEA benefit were unfair and caused excessive financial and psychological stress.

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 HEA policy, which no longer contained the depressed market benefit. The IA denied the grievance, finding that the previous CFIRP Directive was no longer applicable given the grievor's home sold after 18 April 2018.   

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 reduce the benefit received by the grievor. Given taxation 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 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. 

FA decision summary

The Chief of the Defence Staff (CDS) agreed with the Committee's findings and recommendation, and directed that Chief Military Personnel (CMP) ensure the grievor's request for 100% reimbursement of equity expense be submitted to the Treasury Board, in accordance with CFIRP directive article 2.1.01, for approval with the full support of the CAF.

Anticipating limited flexibility to address the lack of a catastrophic loss clause, the CDS would offer that -in future- should losses over $30K be anticipated by a CAF member, that the member's branch leadership be mandated to explore and implement alternate posting courses of action to negate the potential for long-term financial impact to our CAF families. These courses of actions would to include, but not be limited to, remote virtual work potential as well as possible posting cancellations. These means, while not optimal, are within the CAF's capacity to influence. The CDS also directed CMP to investigate a mechanism through which to implement this CAF-centric approach quickly, be that through a Canadian Forces General Message or similar order to ensure rapid, consistent implementation across the force.