Debt Relief in Cases Where Separation Expenses Were Paid in Error

Topic

Debt Relief in Cases Where Separation Expenses Were Paid in Error

Case number

• 2012-006 (F&R Date: 2012–03–30)

Description

In recent years, the Board has reviewed many cases in which the issue is the recovery of overpayments of separation expenses (SE).

Based on previous cases in which this issue surfaced, the Board noted that the problem resulted from the publication of CANFORGEN 080/99 (Imposed Restriction Policy) and CANFORGEN 019/05 (Amendment to Imposed Restriction Policy), the content of which resulted in an improper application of the Compensation and Benefits Instructions (CBIs). The two CANFORGENs allowed the authorization of successive imposed restrictions (IR) when it was “in the best interest of the family” of the CF member being posted, even though this was not a criterion for entitlement to SE under CBI 209.997 (Separation Expense). The Board also noted that SE payments made in error seem to stem from a misunderstanding on the part of Canadian Forces (CF) administrators about the difference between IR status and SE.

The Board explained that IR is a status that provides CF members with some flexibility in managing the disruptions caused by relocating dependants when being posted. Thus, when the CANFORGENs were applied, an IR was generally granted the moment the “the best interests of the family” were invoked.

However, SE is a Treasury Board (TB) benefit aimed at compensating members for additional expenses when they are required to separate temporarily from their families. The Board determined that only CF members who meet the criteria set out in CBI 209.997(2) are entitled to SE. CBI 209.997(5) sets out seven reasons for which CF members separated from their families may be entitled to SE. In addition, the Board noted that the intent generally seemed to be to allow payment of SE until the family arrived at the CF member’s new place of duty. Unfortunately, many CF members received SE for several years while meeting the requirements of IR but not those of CBI 209.997.

The Board is of the opinion that the recent changes to the CBI provisions have not corrected the impacts of this incorrect application on these cases and that in the absence of a major audit, it appears that this situation will continue and that irregularities will continue to be uncovered. Many CF members and their families are therefore today the victim of this flawed administration of IR/SE and have to bear a significant financial burden because the CF deems that they now must pay back huge sums of money paid out over several months, even years.   

The Board noted that the CF is preparing to submit a request to TB that remission of debt be granted to class B reservists who received SE in error as a result of an incorrect application of CBI 209.997. The Board is of the opinion that the CF should include the cases of all CF members who find themselves in a situation involving successive IRs with SE benefits, in order to recommend to TB that a general remission order be prepared.

Recommendation

The Board accordingly recommended that the Chief of Defence Staff:

•        take the necessary administrative measures to identify all CF members who have received SE in error since the implementation of CANFORGEN 019/05; and
•        order the preparation of a general remission order by the appropriate CF authorities, for submission to the Governor in Council, with the support of the Minister of National Defence and TB, in accordance with section 23 of the Financial Administration Act.

Final Authority Decision

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.