Part III - Relocation Entitlements

3.1 Introduction

3.1.1 This Directive provides a customized approach for each participant's particular needs. It applies to eligible employees relocating within Canada. It provides employees with access to professional relocation services such as planning, marketing assistance and destination services throughout every step of the employee's move.

3.1.2 This Directive is designed to encourage and facilitate door-to-door moves thereby eliminating the need for additional assistance such as TDRA, etc., through improved move management.

3.2 Provision Overview

This Directive is divided into three separate yet interdependent components: Core Fund, Customized Fund, and Personalized Fund. Entitlements listed in this section are explained in more detail in other sections of the Directive.

3.2.1 Core Relocation Fund

3.2.1.1 Purpose

The purpose of this section is to describe the Core entitlements available to employees who are relocating. It includes those basic provisions covering the reimbursement of eligible expenses, such as real estate commissions and legal fees, which are directly reimbursed by the employer via its CRSP, and includes some enhancements such as relocation planning and destination services.

3.2.1.2 Funding Overview

Core entitlements within described parameters are 100% funded by the department unless specifically stated otherwise.

Example:
An employee who incurs real estate commission expenses for $15,000 would be reimbursed the $15,000.

The following is an overview of the entitlements available to relocating employees under the Core Fund. Full information on the conditions and limitations of particular entitlements are included in the appropriate section of the Directive.

An Overview

3.2.1.3 While the utilization of the Core Fund of this Directive is not mandatory, there is no provision under any circumstances for those items that are not used, to be exchanged or assigned any monetary value which could be added to the Customized Fund of the Directive. The employee who chooses not to use the Core Fund entitlements forfeits them.

Example:
An employee who opts not to go on a HHT foregoes a Core entitlement and will not receive a monetary value for this action.

3.2.2 Customized Fund

The Customized Fund includes items that can be reimbursed, up to the value calculated from pre-budgeted amounts within the Customized Fund entitlements.

3.2.2.1 Purpose

1. This fund is provided by the employer to allow employees to claim other elements of a move that are not covered under the Core Fund. It provides the flexibility to choose items that best meet the employees' relocation needs.
2. The amount of money available in an employee's Customized Fund is determined by the funding formula and is different for each employee based upon his/her personal circumstances. Since this fund is for the sole purpose of enhancing a move, unused or remaining monies shall be returned to the department and are not payable to the employee.
3. All expenses considered as part of an enhancement to the move shall be charged against the Customized Fund first unless specifically disallowed in this Directive, and any expenses in excess of the Customized Fund shall then be paid from the Personalized Fund.
4. The Customized Fund cannot be used to supplement expenses covered by the Personalized Fund.

3.2.2.2 Entitlements

For information on the conditions and limitations of a particular entitlement, refer to the appropriate section within this Directive. The following is an overview of entitlements available to relocating employees under the Customized Fund:

3.2.3 Personalized Fund

3.2.3.1 Purpose

The amount of money in the Personalized Fund is generated from savings/incentives and allowances as described in subsection 3.4.2.

Paragraph 3.2.3.2 sets out how the funds may be applied. It should be noted that any pay out from the Personalized Fund is taxable.

Reasonable and justifiable expenses exceeding the Core Fund limitations, which fall within the intent of this Directive and are supported by original receipts, may also be claimed from the Personalized Fund.

The employee will have the final decision on how the Personalized Fund is to be expended; however, amounts that exceed IRP pre-negotiated third-party rates/fees (e.g.: real estate commissions, legal fees, inspection fees, etc.) will not be reimbursed.

Upon completion of the move or at the end of 12 months, whichever comes first, any remaining monies from the Personalized Fund will be paid out to the employee.

3.2.3.2 Entitlements

For information on the conditions and limitations of a particular entitlement, refer to the appropriate section within this Directive. The following is an overview of entitlements available to relocating employees under the Personalized Fund:

3.3 Spousal Services

The following services provided to the employee's spouse or common-law partner may be reimbursed:

Customized/Personalized Funds

• Employment search;
• Employment assistance;
• Travel to/from interviews;
• Preparation of CV; and
• Photocopy and transmittal costs for transcripts of academic records.
  1. Expenses are subject to CRA policy and guidelines.
  2. Receipts are required.
  3. A taxable benefit could result from these reimbursements.

3.4 Calculation of the Customized and Personalized Funds

The calculation of the funding formula shall be determined from the following chart. For more detailed information on the conditions and limitations on any part of the calculation, please refer to the appropriate area within this section.

Customized Funding Formula
Element # 1a: Real estate commission (home owner) (max $5250 / min $1000) OR Element #1b: Renters allowance: $1,000 @ 100%	______ x 35% = OR $1000	---------
+ Element # 2: Transportation cost - one way - Department of Finance kilometric rate (employee and dependants)	______ x 35% =
+ Element # 3: Cost of shipping 1000 lb. (453.60 kg) of household goods per qualifying room based on a zone-to-zone matrix calculation	______ x 35% =
Total Customized Funding:		_______
Personalized Funding Formula
Allowances:
+ Element # 4a: Employees non-accountable incidental allowance	$650.00
+ Element# 4b: Employees Transfer Allowance equivalent to two (2) weeks salary
+ Element # 5a: Incentive for not selling home: 80% of Real Estate commission for not selling home (Max. $12,000/maximum appraised value $300,000)
Sub-total:	_____________
Transferable Savings to Personalized Fund
+ Element # 5b:80% of cost savings resulting from not using long-term storage (Isolated Post) for major appliances - max 24 months
+ Element #5c:House Hunting Trip incentive: $250 for flying and staying over on Saturday at destination; OR Interim Accommodation Meals & Miscellaneous Allowance (IAM&MA) savings for unused days (max $250 taxes included.)
+ Element # 5d: Hotel Motel Room Reduction: $50 x number of nights	_____________
+ Element # 5e: Savings for shipping below threshold
Sub-total:	_____________
Total Personalized Fund:	_____________

3.4.1 Customized Fund

3.4.1.1 Chart Element #1 - Real Estate Commission

The first element used to calculate the Customized Fund varies based upon the accommodation status at the time of relocation notification as follows:

Homeowner: the greater of $1000 or 35% of the real estate commission payable based upon the established appraised value of the home to a maximum of $5,250. (applicable taxes excluded).

Renters: A renter at origin will be credited with $1,000.

Notes:

     1. The funding allowance provided to a homeowner is greater because the expenses associated with buying/selling a home are far greater than those of renters disposing of or acquiring rental accommodation.
     2. The sale price of the principal residence will be used in lieu of an appraisal to establish the funding envelope should an employee's principal residence be sold within the time that a letter of offer has been received and before the consultative process commences with the CRSP.

3.4.1.2 Chart Element #2 - Transportation of Family

The second element used to calculate the Customized Fund is the cost of one-way transportation to the new place of work location. For calculation purposes only, the funding will be based on the distance, one-way, between the former and new place of work, multiplied by the family size, multiplied by the appropriate kilometric rate as per the Department of Finance annual rate (rate based on point of origin), and multiplied by 35%.

Formula: 35% x (distance x (current Department of Finance annual rate) x family size).

Example:
The point of origin is Quebec City. Road distance between the old and new place of duty is 3,000 km and the number of persons travelling is 4. The amount to be transferred to the Customized Fund is: 3,000 km x 4 = 12,000 km x $0.42 = $5,040 x 35% = $1,764

Note:
In those instances where the employee and dependants are transported to the new destination via the employer's owned/leased transportation, employees will not be entitled to this element of the Customized Fund and the mileage calculation from the origin post to the new post will not apply.

3.4.1.3 Chart Element #3 - Transportation of Household Goods

The third element used to calculate the Customized Fund is based upon the cost of shipping an average of 1,000 lb./453.60 kg household goods per unit/room from one location to another. Household goods exclude vehicles of any kind.

Formula: 35% x cost to ship household goods per qualifying rooms (based on a zone-to-zone matrix).

Qualifying Rooms Include: kitchen, bedrooms (including bedrooms in finished basement), living room, recreation room, family room, dining room, basement, garage (not condos and apartments), out-building/storage shed (limit of one), storage room (separate from apartment) confirmed via appraisals for home owners and a signed listing for renters.

An employee sharing accommodations is entitled to shipment of HG&E weight factor based on the rental formula.

Example:
3 people rent a 3-bedroom house and rent is based on "the/a room". The employee is entitled to the weight factor of one (1) room. If the rental formula is based on the entire premises divisible by the number (3) of shared tenants, then the employee is entitled to 1/3 of the entire number of rooms.

Notes:

     1. This applies to articles shipped under the Core Fund that the moving firm will accept on a straight-weight basis only (policy centre confirmed rates).
     2. In those exceptional cases where labourers are flown into remote communities for packing, etc., this cost will be excluded from the formula configuration being used.

3.4.2 Personalized Fund

3.4.2.1 Chart Element #4A - Non-Accountable Incidental Expenses and Transfer Allowances

3.4.2.1.1 The Non Accountable Incidental Expenses and Transfer Allowances shall be paid 30 days in advance of the move date of the HG&E as follows:

• Employees shall receive the CRA Non-Accountable Incidental Expenses Allowance credited to the Personalized Fund in an amount of $650.

This allowance is meant to offset some of the losses associated with a move such as:

Admissible Expenses - Customized/Personalized

• food which cannot be shipped (e.g. frozen food, perishables);
• household goods which cannot be shipped (e.g. paint and building materials);
• house plants;
• connection and disconnection of electrical appliances and preparation for shipment (e.g. blocking drum in washer, securing stereo turntable);
• disassembling and assembling of garden and patio furniture;
• removal or installation of valance boxes, curtain rods, wall hooks, clocks, wall mirrors;
• taking up or re-laying hall runners, etc., labour of altering and re-hanging existing drapes and curtains;
• purchase of school books at new location, if such books are required for the normal course of study and are not provided free of charge by the school authority (only applicable if relocation takes place during school year);
• non-cancellable portion of fees such as insurance and local clubs and associations, prorated;
• tuning of pianos;
• photocopy and transmittal costs for transcripts of academic records for employee or children;
• replacement of propane tank;
• other minor out-of-pocket expenses;
• see section 11.5 Sundry Accountable Incidental Relocation Expenses (with receipts).

Inadmissible Expenses

• purchase of new goods such as furnishings, rugs, drapes and household equipment;
• improvements and repairs to effects which are already owned.

3.4.2.2 Chart Element #4B - Transfer Allowances

• Employees shall receive a Transfer Allowance equivalent to two (2) weeks salary. The allowance is based on the annual salary effective on the date of appointment at the new location.

3.4.3 Chart Element #5 - Core Benefit Transferable Savings/Incentives

Employees may increase their Personalized Fund by realizing savings in the following ways:

3.4.3.1 Chart Element #5A - Real Estate Commission Savings

• Employees who elect not to sell their homes at their former place of duty may transfer 80% of the real estate commission fees that would have been payable had the home been sold (taxes excluded) to the Personalized Fund.
• The employee must exercise this option within fifteen working days of receiving the principal residence appraisal report.
• The amount payable is calculated on the appraised value at pre-negotiated IRP real estate commission rates, capped at $12,000.
• Those taking this credit must sign a waiver foregoing any future reimbursement by the Crown of real estate fees, legal fees or other related disposal costs for the property in question.

Example:
Average appraised value of home is $300,000 max. The commission at 5% is $15,000. Therefore an employee could transfer $12,000 (i.e., $15,000 x 80%) from the Core to the Personalized Fund.

3.4.3.2 Chart Element #5B - Savings from Reducing Long-Term Storage Costs

• Employees who are posted to an Isolated Post and into Crown accommodation where it is impossible to normally accommodate their major appliances are entitled to long-term storage at public expense.
• Employees who make alternate arrangements and decide not to store their major appliances may transfer 80% of the savings resulting from not having to store their fridge, freezer, stove, washer, dryer, and/or dishwasher, to their Personalized Fund.

Note:
For transfer value purposes, the saving is to be calculated on the weight/volume (industry averages) of the items, based on the actual duration of the storage requirement up to a maximum of 24 months (see section 11.9 - Savings from reducing Long-Term Costs - for appliances only).

Weight of appliances placed in long-term storage

Appliances	Industry Average Weight	Annual Cost* (12 months)
Dishwasher	150 lb.	4.20 + 7.38 + 28.26 = $39.84
Dryer	200 lb.	5.60 + 9.84 + 37.68 = $53.12
Freezer	420 lb.(+ 16 cu ft)	11.76 + 20.66 + 79.13 = $111.55
Refrigerator	350 lb. (+ 11 cu ft)	9.80 + 17.22 + 65.94 = $92.96
Stove/Range	300 lb.(36 inches)	8.40 + 14.76 + 56.52 = $79.68
Washer	250 lb.	7.00 + 12.30 + 47.10 = $66.40
Total	1,670 lb.	$443.55

* inclusive of handling (in and out) @ $1.40/100 lb., insurance @ $0.41/100 lb./month, and storage costs @ $1.57/100 lb./month.

Note: These classes of appliances vary in size and weight: a 6 cu ft refrigerator weighs 150 lb., and a 7-10 cu ft weighs 250 lb., a 15 cu ft freezer could weigh 340 lb., a 30 inch stove/range could weigh 225 lb.

3.4.3.3 Chart Element #5C - Savings from a Shorter House Hunting Trip (HHT)

(a) Employees authorized to drive 650 km or less one-way and who have successfully completed the HHT in less than 5 days may transfer 100% of all lodging, meals, and incidental savings for the unused days (capped at $250) to the Personalized Fund. A normal length HHT consist of the following:

• 5 days meals and incidental allowance (HHT) + 2 days (travel status).
• 5 nights accommodation (HHT) + 1 night accommodation (travel status).

Example:
An employee and spouse or common-law partner departed on Sunday and returned on Thursday used 3 days meals and 3 nights accommodation. The employee could transfer the cost of 2 days meals for each of the employee and the spouse or common-law partner and 2 nights accommodation and 2 days incidentals up to a maximum of $250 to the Personalized Fund.

OR

Incentive for Staying over a Saturday Night

(b) Employees on HHT who fly and arrange their itinerary so that they save the department airfare costs by staying over a Saturday night at destination shall receive $250 into their Personalized Fund.

Savings are based upon return full fare economy airfare from point of origin to final destination, direct/non-stop (except when the carrier forces a connection/stopover such as flight from Halifax to Whitehorse).

• Stay over must be at destination, not en route.
• Does not apply to employees relocating into Crown homes or facilities.

3.4.3.4 Chart Element # 5D - Hotel-Motel Room Reduction Savings/ Incentive

An employee, who uses less than his or her hotel room entitlement (see section 4.10), based on family size, shall receive a flat rate incentive of $50.00 per night which will be transferred to the Personalized Fund.

3.4.3.5 Chart Element # 5E - Transportation of Household Goods Below the Threshold

Another element used to calculate the Personalized Fund is based upon the cost of shipping an average of 1,000 lb./453.60 kg household goods per unit/room from one location to another. Do not include the shipment of vehicles for calculation purposes.

The relocation employee whose entire shipment of HG&E is below the established weight threshold may transfer, to their Personalized Fund, 80% of the savings resulting from shipping weight below this threshold.