IRP Policy Personalized Component

[PumpKickr]

Is it just me or is the "personalized" component of the IRP funding just a way for DND to say, "we're not paying for that." without looking like they're not paying for it? They give you all these situations where you can use "your personalized component", but at the end of the day, its money that they're obligated to give you anyway.

I know there's a few non-taxible uses for it (like the interest rate paydown), but everywhere it looks like I have to use it, I'll still get taxed. Paying the CMHC fees for example. (I know that that's normally custom, but in my case it will likely be personal.)

 

[exgunnertdo]

Keep in mind that a lot of the rules about what IRP can pay for come from Canada Revenue Agency (aka the tax man).  In a nutshell - if the costs are not directly attributable to the move, it's a taxable benefit.  Don't blame IRP for CRA's rules.

To use your example, CMHC fees are a cost associated with buying a house, not moving per se.  When you buy your first house, if you are required to pay CMHC fees, make sure that your mortgage is portable so when you get posted, you don't have to pay CMHC fees again.  If at some point in the future you have to pay CMHC fees and it was the CF's fault (being forced into rental after being an owner, for example) then they pay out of core, but it's still a taxable benefit (as evidenced by my huge tax bill this year :'()

Another weird one - the home inspection, out of Core funding, is taxable...go figure...but not IRP's fault.  Oh well, I'd rather pay the tax on the cost than the entire cost.

 

[PumpKickr]

When you buy your first house, if you are required to pay CMHC fees, make sure that your mortgage is portable so when you get posted, you don't have to pay CMHC fees again.

I've been having alot of problems getting my bank to acknowledge the whole portability thing. They told me it was portable, but that since the size of my mortage is increasing by over 125% (more then doubling) for the same size residence in the new location, that Mortgage Loan Insurance will be required..... actually maybe I should talk to the bank about that again.

I don't have a problem with the actual policies themselves, its the fact that there's a good section of the IRP directive set aside to describing the "personalized" portion of the funding, when really they should just say: "Here's stuff we're not paying for, and here's a bag of money (what used to be called the 'Posting Allowance'). Use it however you want to pay for the rest of your expenses. If you have any left over, 'You Win!'"