Allowances - Post Living Differential (PLD) [MERGED]

[dapaterson]

As we all know, when calculating numbers, there's lies, damn lies, and statistics......

...and liars, damn liars, and staff officers...

 

[BinRat55]

Oh man I don't understand!!

Corner Brook - 83
Grand Falls/Windsor - 133
St John's - 308

Gander - Diddly.

Is there a site or a paper I can access that I can read for myself where this "logic" came from? I honestly don't understand. Even Ottawa got PLD, and they were supposed to be the "base" comparison... (nothing against the pers in Ottawa - I beleive they should get something, but words is words...)

 

[exgunnertdo]

The fact that Ottawa is still getting PLD is part of CBI 205.452, which is "Transitional PLD."  IE, it's all the cities that get PLD now, but aren't going to under the new formula.  The table in that CBI shows the gradual reduction in PLD for those members, down to zero.  If you get posted to a city in the TPLD policy, you don't get PLD.  Those of us that are here in Ottawa (and other cities) bought houses with that PLD in effect and now have a couple of years to re-align our budgets to reflect the zero PLD. 

Can't speak for the maritimes, never lived there.  But I was raised in Manitoba, and can't see my PLD being zero, while those in Shilo also get zero!  While the conspiracy theories are being tossed around - maybe this is the CF's way of getting people to request postings to places like Winnipeg ;D. 

Seriously though, I would also like to see some transparency in the figures.  How do they arrive at them?  And (new formula aside for a moment) Ottawa was at ~200 per month before the change, does that mean that places that kept their PLD had it reduced by ~200 to reflect the "Ottawa Baseline" part of the policy?

 

[Aerobicrunner]

Is there a site or a paper I can access that I can read for myself where this "logic" came from? I honestly don't understand. Even Ottawa got PLD, and they were supposed to be the "base" comparison... (nothing against the pers in Ottawa - I beleive they should get something, but words is words...)

There is some information regarding the CBI at the beginning of this thread, however this is the update dated 29 Nov 07 found on intranet at: http://hr3.ottawa-hull.mil.ca/dgcb/dppd/pld/engraph/home_e.asp?sidesection=8&sidecat=7

INTRODUCTION
The Post Living Differential (PLD) program was introduced on 1 April 2000 to provide a mechanism to stabilize the cost of living of Canadian Forces (CF) members and families, serving in Canada, with respect to regional differences. PLD provides a means for a CF family to enjoy a relative and predictable standard of living no matter where they serve in Canada. The original PLD methodology was developed in the mid-late 90’s; however, the economic conditions under which the previous methodology was derived, roughly a decade ago, are no longer relevant in today’s environment. Following an intensive review, a new PLD methodology has been approved by Treasury Board effective 1 July 2007. Measures have also been approved by Treasury Board to ease the transition to the new methodology.

METHODOLOGY CHANGES
The following changes have been made effective 1 July 2007.

A “Standard City” approach has been adopted as the threshold to determine a PLD area. Under the original methodology any CF place of duty with costs above the CF Weighted Average was deemed a PLD area. Under the new methodology any CF place of duty with costs above the Standard City will be deemed a PLD area. CBI 205.45 defines Standard City as the cost of living in National Capital Region, as determined by the Minister in consultation with independent firms(s) with the expertise in the field of cost of living determination.
Incorporate an average annual CF salary as the profile used to determine the costs at each CF place of duty instead of using a profile that includes spousal income. A spouse of a CF member is not always guaranteed employment at the new place of duty; thus it is more appropriate to focus on CF members’ salaries.
Use current year data instead of a three-year rolling average. The three-year rolling average was instituted to prevent large fluctuations in rates; but this methodology has proven unresponsive, particularly in booming economies with rapidly increasing shelter costs.

Other Policy changes/clarification are:

A member retains their PLD when they elect an early Intended Place of Residence within the boundaries of their current place of duty (see CBI 205.45 (9));
Clarifies that a Reservist who receives a return move back to where they were moved from (former place of ordinary residence) is not entitled to PLD (see CBI 205.45(5)(c));
A Reservist is entitled to PLD on subsequent Reserve Force employment if they find that employment within 90 days vice one year (see CBI 205.45(6)); and
A Reservist is not disqualified for PLD if they join a local reserve unit (limitation has been removed from CBI 205.45(6)).

TRANSITIONAL MEASURES
Updated PLD rates effective 1 July 2007 are contained in the table to CBI 205.45. These rates reflect the new methodology. Where members currently in receipt of PLD will see decreases, transitional measures have been incorporated into a new CBI 205.452. In general, decreases will be phased in over a three-year period. Officers in the rank of captain or above, and non-commissioned members in the rank of warrant officer or above will have decreases phased in starting 1 April 2008. Officers in rank of lieutenant or below, and non-commissioned member in the rank of sergeant or below will have decreases phased in starting 1 April 2009. For Captain (Navy) and Colonel and above living in the National Capital Region (NCR), the new PLD rate for that location will be implemented in full as of 1 April 2008. For details see CBI 205.452.

The Post Living Differential (PLD) methodology includes the following elements:

The intent of PLD is to stabilize the overall cost of living of Canadian Forces (CF) members and their families residing in Canada to a maximum not exceeding the National Capital Region (NCR) cost of living, namely the difference between the NCR cost of living and the cost of living in the PLD area.

A PLD area is, as determined by Department of National Defence (DND) in examining local circumstances, a location within the boundaries of a CF place of duty in Canada and may include a zone within a large metropolitan region (e.g., Vancouver, Toronto, Montreal) and surrounding vicinity.

The cost of living will be based on a representative CF household defined as:
a. gross income based on the average CF salary; and

b. family size as determined from the CF personnel records or periodic surveys of CF members. Current representative family size of three persons is derived from the 1998 CF Household Survey.

The household expenditure pattern, including the category weightings, will be based on the Canadian average for a household of similar income and family size, as described in the Statistics Canada Family Expenditure Survey (FAMEX).

Cost of living differences will be determined by the pricing of a representative selection of the items in the FAMEX and any additional items determined by DND as being necessary to meet the CF requirement. As a minimum, the data collected and representative items priced will provide sufficient indication of spatial differences in expenditure by the representative household in the following categories:
a. income tax - the total combined federal and provincial income tax paid annually;

b. transportation - total annual cost;

c. rent for renters and mortgage interest for homeowners;

d. property (real estate) tax for homeowners;

e. home maintenance cost for homeowners;

f. household/renter insurance;

g. utilities;

h. goods and services, to include:
(1) food items (consumed at home and away from home);
(2) clothing;
(3) household items, including furniture;
(4) personal care;
(5) medical and dental care;
(6) domestic services, including child-care;
(7) recreation; and
( 8 ) alcohol and tobacco.
i. expenditure on sales tax, if not included in the pricing of relevant items; and

j. miscellaneous items, to include expenditures not included elsewhere (e.g., education costs) and savings and investments.
Homeowner costs will be based on:
a. the home size indicated by the Canadian average expenditure profile;

b. home purchases for the last 12 months (12 months may be expanded for locations where there is insufficient real estate market activity for meaningful analysis);

c. the rolling average interest rate for a five-year closed mortgage; and

d. a 20% down-payment.
PLD rates will be calculated annually using the current year data and the NCR, computing the differentials between location costs and the NCR costs, and adding an increment to offset the income tax paid on the PLD allowance. Data will be collected in the October to January period. New rates will be implemented with the tentative effective date of 1 April.

The income tax increment included in the calculated PLD rate will be based on the estimated marginal tax determined from using the second from lowest federal income tax rate, published by the Canada Revenue Agency, combined with the associated provincial tax rate excluding grants or surcharges.

A reduced PLD of 75% will be paid to a member sharing a principal residence with another CF member who is entitled to PLD. This provision also applies to service couples.

 

[baccalieu]

If its that expensive to live in Ottawa, how do the majority of the Federal Public Servants who live there without the benifit of PLD manage to survive??
Whats your total family income, $90,000-$100,000?

 

[baccalieu]

Someone please tell me Im wrong here.

1.Lets assume I was born in Victoria and worked as a civilian in a low paying job, however if I join the Navy,finish basic training, then get a posting back to my hometown,I will receive an allowance of $600.00 per month in PLD to offset my living costs.
Seems like a "gravy train" to Navy types who spend most/all of their career in either Halifax or Esquimalt.

2. A "service couple" posted to Toronto would receive 1586 and the other 1190 for a yearly total of $33312.
What kind of homes are they buying in Toronto? His and hers?

 

[IN HOC SIGNO]

Someone please tell me Im wrong here.

1.Lets assume I was born in Victoria and worked as a civilian in a low paying job, however if I join the Navy,finish basic training, then get a posting back to my hometown,I will receive an allowance of $600.00 per month in PLD to offset my living costs.
Seems like a "gravy train" to Navy types who spend most/all of their career in either Halifax or Esquimalt.

2. A "service couple" posted to Toronto would receive 1586 and the other 1190 for a yearly total of $33312.
What kind of homes are they buying in Toronto? His and hers?

Yeah some gravy train. I was posted there in 1996-2001.....it was a struggle to buy a house, my family were all in  Ottawa and my wife's in Halifax. There was no compassionate allowance at the time and service air had just shut down. when my Dad died it cost me $1500 to get home for his funeral. I came out of Victoria with no savings and huge debt in 2001 and as the house prices had stagnated I didn't make anything on my house. A public servant who grew up and lived in Victoria didn't have to move every three to five years take the wear and tear on his furniture and appliances etc etc.

 

[exgunnertdo]

Someone please tell me Im wrong here.
.
.
.
2. A "service couple" posted to Toronto would receive 1586 and the other 1190 for a yearly total of $33312.
What kind of homes are they buying in Toronto? His and hers?

Yes, you're wrong - the service couple would each get 75% of the full rate, not 1 at 100% and the other at 75%.  And that exceptionally high rate in Toronto is only for one area.  Other parts of Toronto have much lower rates.  I've never seen a map, though, so I don't know where the area in question is.

And it's not a "gravy train."  PLD is intended to equalize quality of life for members of the CF across Canada, not to equalize QOL to civilians on the local economy.  The theory being that someone posted to Toronto, a place with very high cost of living, does not have a significantly lower QOL than a service member of the same rank who is posted to Shilo, which has a much lower cost of living.  The comparison to a person working as a civilian in a low paying job is irrelevant.  Just the same as it's irrelevant that civilian wages in Alberta are extremely high right now.

 

[PO2FinClk]

exgunnertdo, I fully concur with both your posts.

Wow man, this sucks. I'm a spec pay Cpl 2 with a wife who makes about $33K/year and 3 kids. I live in Ottawa and we just bought a house. It's going to be hard for us to be paying our new mortgage as it is right now.

Not really if you look at all the figures.

Currently you receive $196.00 which will remain until Apr 09, where it will reduce by $65.00 leaving you to still receive $131.00. Then in Apr 2010 it will go down by a further $66.00 leaving you with $65.00 until the end of March 2011. Now if you consider that for 2007 you see a pay raise of $86.00/Month (as a Cpl 2) combined with any future economc adjustments, you should not feel much impact if any. Note that I am not trying to mitigate your personal finances, but when looking at all these figures you should not see much impact. As the PLD decrease is in "chunks" of $65.00/month, this ends up being less $20.00 per pay after taxes.

 

[simysmom99]

I think anyone who buys a house, or sets up their budget on future PLD rates, tour pay, whatever extra money may or may not be coming down the pipeline is foolish.  Buy what you can afford, have a QOL that you can afford comfortably without the extra money, that way you won't have any problems.
I Edmonton we are getting I ~ $200 the way I read the chart.  Pays a couple of bills, yes?  We could always have nothing...

 

[Aerobicrunner]

  And that exceptionally high rate in Toronto is only for one area.  Other parts of Toronto have much lower rates.  I've never seen a map, though, so I don't know where the area in question is.

Map showing the different PLD areas in Toronto is found on this Intranet site:  http://armyonline.kingston.mil.ca/LFCA/143000440005102/PLD_MAP00.DOC

 

[Bruce Monkhouse]

Wow man, this sucks. I'm a spec pay Cpl 2 with a wife who makes about $33K/year and 3 kids. I live in Ottawa and we just bought a house. It's going to be hard for us to be paying our new mortgage as it is right now. I feel bad for anyone like us or in worse financial situations (ie. any Ptes with kids, etc).

Sorry to take this off-topic but I just had to ask,...
Whatever gave you the impression buying a house has ever, or should ever, been easy?

 

[ixium]

With all the aid and information avaliable, buying a house should be realitivly easy.
Its when people try and get a house that is outside their price range, or just barely in theirs that it becomes a problem.

With a quick look at mls.ca I found quite a few nice 4 bedroom houses in the Ottawa area in the $100k-$200k price range which, baring no other major debts, should be affordable with a $90k per year income.

 

[baccalieu]

With the proceeds from the sale of a previous home, a person could probably go up to the 400-500k range and if buying "across the river" perhaps even in the 300-400k range.

 

[PMedMoe]

With the proceeds from the sale of a previous home, a person could probably go up to the 400-500k range and if buying "across the river" perhaps even in the 300-400k range.

If the sale of the previous home was all profit and not used to pay off the mortgage, maybe......
In some cases, there hasn't been enough equity put into the home to make much off of the sale.

 

[baccalieu]

With all the aid and information avaliable, buying a house should be realitivly easy.
Its when people try and get a house that is outside their price range, or just barely in theirs that it becomes a problem.

With a quick look at mls.ca I found quite a few nice 4 bedroom houses in the Ottawa area in the $100k-$200k price range which, baring no other major debts, should be affordable with a $90k per year income.

Not necessarily "nice" 4 bdrm homes, but even a discriminating buyer should be able to find one here.

4 bdrooms or more, 2 baths or more-- 200-400k

Aylmer, Gatineau, Hull and surrounding areas...223 homes
Ottawa, within its existing boundaries.............476 homes

 

[PO2FinClk]

For the moment, would remain 0.00 and other cities would see theirs adjusted accordingly. There is not perfect solution, but as I stated before, claw back of PLD coupled with pay raises will not see yourself net income be reduced noticeably. As I stated before not trying to judge your situation burt looking at the amounts speak for themselves.

Any chance of anything changing on these in the very near future? Not likely as this one alone took several years to develop.

 

[exgunnertdo]

Child care in this city (Ottawa) is really expensive.  It can run up to 40 or 50 dollars a day, with a licenced centre being as high as $55 per day for an infant (under 18 months).  I was paying $16 per day in rural Manitoba (government set rate for licenced home day care, 2005 rate, it may have gone up since then), no PLD, then $25 per day in Borden, with around $80 per month PLD, now $40 per day, no PLD (after it's phased out).  The PLD in Borden didn't cover the increase in child care, let alone the other increases in price compared to MB.  Likewise for Ottawa, if you use the current PLD rates.  You can buy a smaller house, a fixer upper, rent if you have to, to mitigate the increased housing costs here, but I can't see shopping around for "bargains" in child care.  Not going to happen.  There are women charging $25 per day here, but I have to ask myself why.  I won't compromise my kids' safety, health and happiness with potentially substandard care.

 

[Sub_Guy]

Child care is a killer (3 kids)...  If I ever find myself posted to the Ottawa region, I would consider living on the Quebec side where child care is much cheaper, and the corner stores have beer.....

 

[x-zipperhead]

Better be about a $4000.00 per year savings in child care as that is about how much more you'll be paying in income taxes on a $60,000 per year salary.  Maybe if you crunch the numbers it is worth it but that $5 a day daycare comes with a price......much higher taxes.