Drastic changes are coming down the pipe that will remould how the Canadian Armed Forces (CAF) administers Post Living Differential (PLD).
From July 1, 2023, PLD and Transitional Post Living Differential will be repealed and replaced by the Canadian Forces Housing Differential.
“The CFHD aims to establish a more sophisticated and equitable approach to assisting CAF members in adjusting to housing costs across Canada. It considers the varying residential housing markers and is inclusive of a GBA Plus Analysis,” stated a notice released on Tuesday from the military.
Significant Changes Afoot
At the ground level, the change means that some CAF members will see a significant clawback of the money they received under PLD, while some may see an increase. This is because the CFHD will be determined by taking a pre-determined value of the average rent in the area of military posting and subtracting that from the member’s gross monthly salary. The average rent values will be determined by a third-party contractor.
“This approach means that not all members in the same location will receive the same CFHD rate and ensures that members are provided a differential when required,” stated the CANFORGEN 54/23.
Members living in DND accommodations, such as RHU, SQ and designated residences, will not receive the CFHD. This is because, according to the CAF, married quarters are capped at 25 per cent of a family’s gross household income. Similarly, single quarters also have their rates set.
The CFHD is a taxable benefit.
The CANFORGEN notes a number of distinct differences between PLD and CFHD. These differences are:
- The CFHD is based on the posting location and not necessarily the location of residence;
- Members have to provide proof of housing costs through rent agreement, lease or mortgage. They must be in the name of the member or their spouse, common-law partner;
- The entitlement will cease if a member receives CFHD for more than seven consecutive years at the same location;
- The CFHD will be reassessed on an annual basis.
Further information will be released by April 28, 2023.
For those with questions, concerns or feedback, a special portal has been created. According to the CANFORGEN, the portal will “distribute comments and queries to the appropriate office for info or action as required.”
For more information about these updates, visit here on the DWAN.