Benefits & Pensions
Canadian Armed Forces to phase out old housing benefit over three years
By Sarah Ritchie
The Canadian Armed Forces has created a new program to gradually phase out its old housing benefit after hearing feedback from military members who were set to lose the payments.
The military announced plans in March to create a new housing allowance called the Canadian Force Housing Differential, which came into effect on July 1.
The program is based on a member’s salary, unlike the post-living differential, which was aimed at offsetting the cost of living in particularly expensive communities. Those rates had been frozen since 2009, even as the cost of housing has soared.
It was estimated the change would make around 28,000 people eligible for the new allowance, or roughly 6,300 more than the previous program covered.
But the military also estimated around 7,700 members would become ineligible and thousands of others would see their monthly payments reduced. Officials said that would result in a net savings of $30 million a year, bringing the program back within its budget at around $150 million.
In an update emailed to Armed Forces members last Thursday, the director general of compensation and benefits said feedback on the change had been heard and the Treasury Board has approved the creation of a provisional policy to phase out the payments.
Brig.-Gen. Virginia Tattersall said those who would have seen their monthly housing benefit decrease will be eligible, and will receive decreasing payments until July 2026.
“Your individual entitlement will cease prior to that time if you are posted to a new location, or if your (provisional post-living differential) calculation amounts to a negative value,” Tattersall wrote in the memo, noting that individual circumstances, including promotions, will be taken into account.
Eligible members will be enrolled automatically and should get a lump-sum payment to cover the summer months sometime in mid-October.
In an interview in March, Tattersall said the new program was about “being equitable” and would benefit more people in the junior ranks.
She said the military wanted to ensure no one was forced to spend more than 25 to 35 per cent of their monthly salary on rent. An outside company was hired to assess average prices near military bases.
A critical shortage of housing on bases means that thousands of military members are on wait lists, and in some cases base commanders have allowed people to keep living in training quarters for months because they’re struggling to find other accommodations.
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