Case # 2010-015

Home Equity Assistance (HEA)

Case Summary

F&R Date: 2010-06-30

The grievor was posted after only one year of what he had expected to be a three-year posting. During that one year, the local housing market declined approximately 14% in general. The grievor's principal residence was eventually sold at a loss of approximately 12% or $44,000.

After being reimbursed the maximum $15,000 in home equity assistance (HEA) available from core funding under the CF Integrated Relocation Programme (CF IRP), the grievor requested reimbursement of the additional equity loss of $29,000 that he had suffered. His request was denied on the basis that his situation did not fall within the CF IRP definition for a "depressed market" (that being a market decline of 20% or more as confirmed by the Treasury Board).

There was no initial authority (IA) decision on file because the grievor had denied an IA request for additional response time.

The Board found that the CF IRP policy had been applied correctly to the grievor's circumstances and recommended that the Final Authority (FA) deny the grievance.

Notwithstanding, the Board also had concerns about the adequacy of the policy and the lack of a mechanism to address exceptional cases as appeared to be present with this grievor. The Board found that the CF should not oblige a member to move after just one year in a posting and simply ignore the fact that the member has suffered a loss of $29,000 in home equity as a consequence of the posting. The Board found the 20% market decline threshold required to trigger the definition of a "depressed market" to be quite restrictive and an odd construct, noting that had the market in the area declined by 20% rather than 14%, the grievor would presumably have been compensated for his entire loss of $44,000 rather than the $15,000 he received.

The Board recommended that the FA direct a review of the provisions of the CF IRP regarding HEA with a view to re-examining the 20% threshold needed to trigger a "depressed market" and to consider providing the authority to the Chief of the Defence Staff to reimburse equity losses based upon a determination of "undue hardship".

CDS Decision Summary

CDS Decision Date: 2011-03-02

The CDS partially agreed with the Board's findings and its recommendation to deny the grievance. The CDS did not agree with the Board that the grievor received the maximum amount of reimbursement for HEA in accordance with the CF IRP. The grievor was allowed a maximum reimbursement of 80% from his core benefit, but there was still a balance in the grievor's custom funding envelope that was not attributed to any relocation benefit. The CDS directed the grievor's file to the Director General Compensation and Benefits (DGCB) in order to determine whether available funding, if any, could be used for the purpose of HEA. Regarding the Board's recommendation that CF IRP provisions be reviewed, the CDS directed the DGCB to review the adequacy of the HEA provisions with TB with respect to ensuring that the aim of minimizing any negative effect on CF members is met.