Policy and Procedure on Date: May 2005
Resettlement ExpensesIssue No: 1
T A B L E O F C O N T E N T S
1PURPOSE OF THE SCHEME
2RESPONSIBILITIES WITHIN THE SCHEME
3ESTABLISHING ELIGIBILITY
4RESETTLEMENT AGREEMENT
5CLAIM FORMS
6REPAYMENT OF EXPENSES
7ITEMS TO BE CLAIMED FROM THE RESETTLEMENT ALLOWANCE
8ITEMS TO BE CLAIMED IN ADDITION TO THE RESETTLEMENT ALLOWANCE
9PAYMENT CONTROL SHEET/SPREADSHEET
10PROCESSING CLAIM
11VAT CLAIMABLE EXPENSES
12CALCULATING VAT ELEMENTS
13CALCULATING FINAL PAYMENT
14RESETTLEMENT EXPENSES CHECKLIST
DEPARTMENT OF COMMUNITY SERVICES - RESIDENT WARDENS
RESETTLEMENT EXPENSES AGREEMENT
EXTENSION OF LODGING ALLOWANCE/EXCESS TRAVEL EXPENSES*
POLICY FOR CLAIMING RESETTLEMENT EXPENSES
PAYMENT CONTROL SHEET
FINAL PAYMENT CALCULATION
LODGING/EXCESS TRAVEL PAYMENT CONTROL SHEET
RESETTLEMENT EXPENSES - R1
RESETTLEMENT EXPENSES - R2
RESETTLEMENT EXPENSES SEQUENCE OF EVENTS/CHECKLIST
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Policy and Procedure on Date: May 2005
Resettlement ExpensesIssue No: 1
1 PURPOSE OF THE SCHEME
1.1The purpose of this scheme is to provide newly appointed employees with financial assistance which will enable them to take up residence nearer to their new place of work.
1.2The scheme will only apply to employees who are required to move their home because daily travel to their place of work would not otherwise be practicable.
2 RESPONSIBILITIES WITHIN THE SCHEME
2.1The responsibility for administering the Resettlement Scheme is devolved to departments. However, overall responsibility for the scheme lies with the Human Resources section.
2.2Each department should have two, or more, people trained to administer the scheme. One person should be nominated to hold specific responsibility for administering the scheme within their department, with a more senior person also being trained in order to verify all claims and to be able to sign as "Supervisor" in the coding block on claim forms. Each claim must be authorised by an authorised signatory of the department, this being the appropriate Business Unit Manager.
2.3The responsibility for monitoring the resettlement expenses scheme lies with the Chief Officers. The Internal Audit division will audit departmental operation of the scheme as part of their audit programme.
2.4The scheme is a corporate policy applied throughout the Authority. Any revision of the scheme will be actioned by Human Resources. In unusual circumstances further guidance can be obtained from the Human Resources section.
3 ESTABLISHING ELIGIBILITY
3.1Resettlement expenses are awarded at the discretion of the Business Unit Manager, in circumstances where the newly appointed employee is able to meet the following criteria:
a.They are moving to within a 25 mile radius of their normal place of work upon initial appointment;
b.The removal involves a move of more than 35 miles and results in being nearer to the new place of work;
c.The new employee's old house is situated at a radius more than 25 miles from their new place of work.
3.2New employees will be eligible in accordance with the following criteria:
Criteria / Maximum Entitlement(inc VAT)
Buy and sell / £5000
Buy or sell only / £2500
Rented to rented / £1000
3.3Specific details of the entitlements available to Resident Wardens, employed in the Department of Community Services, are outlined in Appendix 1.
3.4The limit of £5000 applies to employees whether married or single. Resettlement expenses will not be paid to a second appointee ie an employee whose spouse or cohabitee has already obtained employment within the eligible area and would be moving anyway, or where financial assistance has been obtained from another source.
3.5Officers can claim the total net allowance plus a proportion of any VAT that the Council is able to reclaim.
3.6If the Business Unit Manager making an appointment has insufficient budgetary provision available to cover the expenses involved, the relevant Director will be able to investigate the possibility of providing funding from another business unit under his / her overall control to cover the shortfall.
3.7Resettlement expenses can only be paid to an employee who has actually commenced employment with the Council.
3.8Employees appointed to temporary or fixed term contracts may also be reasonably considered, subject to a clear understanding of the repayment clause (refer to paragraph 6.0).
3.9The time limit for claims under the scheme is two years from the date of commencement in post. Approval must be sought from the appropriate Director in order to extend this limit. If the employee has not yet moved home they should confirm in writing that it is still their intention to do so.
3.10The Business Unit Manager has the discretion to alter the allowance available to a new employee providing that the total allowance does not exceed £5000.
3.11Employees may claim for home search expenses incurred in the period between the offer of employment and the date of commencement in post. However, no payments can be made until the employee commences in post.
4 RESETTLEMENT AGREEMENT
4.1A Resettlement Agreement must be signed by the employee before any expenses can be claimed (Refer to Appendix 2). At the time of signing, the employee must be made aware of the circumstances in which they would be required to repay expenses.
4.2The Resettlement Agreement is a standard form, which is amended to include the individuals details. Two copies should be signed:
- The original is given to the employee;
- The second should be retained within the department;
4.3The employee is required to have their signature witnessed. Where possible this should be done by the administrating officer. However, it is acknowledged that this is not always possible. Where the witness is not a Council employee (for example if the form is posted to the prospective employee before the commencement of employment) the witness should not be a relative and should provide their full address.
4.4The agreement requires the Business Unit Manager's signature as approval that expenses may be paid.
5 CLAIM FORMS
5.1At the same time that an officer signs the agreement they should be issued with a supply of the following claim forms and guidance notes on the scheme. (For guidance notes refer to Appendix 4).
R1 Lodging Allowance & Excess Travel (peach form)
R2All other removal expenses (yellow form)
5.2All claim forms must be signed and dated by the claimant. The claimant completes the top half of the form and signs the "Goods Rcd" box in the bottom left hand corner of the coding block to indicate that the expenses are being incurred or have been incurred on their behalf. The form is then passed to the departmental administrator, with accompanying receipts, for processing.
6 REPAYMENT OF EXPENSES
6.1An employee leaving the Council for any reason other than death, redundancy or ill-health retirement, after receiving payment under the resettlement scheme must repay the whole or a proportion of the allowance received as follows:-
Within 12 months from the date of commencement / 100%12-18 months service / 75%
19 months up to 2 years’ service / 50%
6.2If an employee leaves the authority within these time periods, then the employee will be invoiced for the appropriate amount (including any VAT claimed). An invoice should be requested from the Finance Section of your department using an invoice request form. Before the invoice is sent to the employee a copy must be taken and retained with the details of the employee's claims.
6.3In the case of a temporary or fixed term appointment, if the employee leaves within two years (or more if an extension has been granted) of the date of appointment because of the temporary contract has reached its end and there is no suitable alternative employment available then he/she will not be required to repay any money received .
6.4However, where an employee in a temporary post leaves in one of the following situations before completing 2 years’ (or more if an extension has been granted) service then he/she will be required to repay, in line with the repayment schedule as set out in paragraph 6.1.
(a)The employee is offered suitable alternative employment at the end of the temporary contract but still chooses to leave the Council.
(b)The employee leaves of his/her own volition.
(c)The employee is dismissed because of misconduct.
6.5Where an employee initially appointed a temporary post is subsequently appointed to a permanent post with the Council, the employee shall then be treated as a permanent employee and required to repay in line with the conditions set out in paragraph 6.1.
6.6It is the Department's responsibility to make thorough checks prior to any employee leaving the service of the authority to establish if resettlement expenses have been claimed within the past two years.
6.7In exceptional circumstances the appropriate Director (or nominee), in consultation with the Head of Human Resources has the discretion to waive, wholly or in part the above repayment conditions.
7 ITEMS TO BE CLAIMED FROM THE RESETTLEMENT ALLOWANCE
7.1Legal and Estate Agents Fees
7.1.1Sale Expenses:
- Actual cost of legal fees
- Mortgage loan redemption penalties
- Estate agents fees
- Advertising costs
- Utility disconnection charges
Where house agents/auctioneers are not used, employees can claim actual cost of expenditure incurred on advertising.
7.1.2Purchase Expenses:
- Actual cost of legal fees
- Mortgage loan procurement fees
- Survey fees
- Land Registry fees
- Stamp duty charges
- Utility connection charges
Any abortive purchase expenses (including the expenses listed above) will only be reimbursed when the Business Unit Manager is satisfied that the employee’s reasons for failure to complete the purchase were reasonable.
7.1.3Any legal fees involved in taking up a new tenancy and/or actual loss of rent advanced on any previous tenancy.
7.2Removal Expenses
7.2.1Actual costs of removal of furniture and effects from the employee’s old home to new, including insurance of goods in transit. This must be the lowest of 2 quotations obtained from different removal companies. Proof of the two quotations should be attached to the claim.
If the employee chooses to use the company which provided the higher quotation, the difference in cost between their quotation and that of the lower quotation must be paid by the employee.
7.2.2Temporary storage expenses, where a permanent move cannot be made immediately, will be reimbursed for a maximum period of 6 months. This may be extended with the agreement of the Business Unit Manager.
7.2.3The cost of moving furniture from a place of storage to the employee’s new home can also be claimed from the overall allowance.
7.3Other/Incidental Expenses
7.3.1At the discretion of the Business Unit Manager, the employee may be able to be reimbursed for incidental expenses in connection with moving to a new home. For example:
- Cost of detaching and reattaching household fittings (eg electrical
appliances)
- Alteration to or replacement of curtains
- Fixtures and fittings
- Relaying of floor coverings (but not the cost of new ones)
- Installation of security systems (only allowed if the employee had one previously at their old home).
8 ITEMS TO BE CLAIMED IN ADDITION TO THE RESETTLEMENT ALLOWANCE
8.1A lodging allowance, or excess travel expenses, can be claimed in addition to the overall allowance. This is to assist the employee whilst they look for a new home.
The employee may claim the lodging allowance, or excess travel expenses, or a combination of both, for a period of up to three months (eg one week excess travel, one week lodging allowance). At the discretion of the Business Unit Manager, this period may be extended up to a maximum of 6 months. Any request for an extension should be submitted in writing to the Business Unit Manager.
8.2Lodging/Travelling Allowance
8.1.1An employee who is unable to move house immediately to within reasonable distance of their new place of work and has therefore to find temporary accommodation for themselves, thereby incurring additional expense through running two households/having two sets of living expenses, can claim a lodging allowance of £75.00 per week.
8.1.2In addition to the lodging allowance, the employee is entitled to claim travelling expenses between their old home and their temporary place of lodging at public transport (eg second class rail fare) or lower essential car allowance rates (appropriate to the size of car engine) every weekend.
8.1.3Receipts should be submitted if available.
8.3Excess Travel Expenses
8.2.1An employee who chooses to commute from their old home to their new place of work on a daily basis instead of claiming lodging allowance, pending removal, can claim actual reasonable expenditure equal to the difference between the cost of travelling from old home to old work place and that of the journey from old home to new work place. Note – VAT petrol receipts should be provided by employees.
This allowance is to be paid at either public transport or lower essential car allowance rates. An exception to this would be if the employee uses a vehicle leased to the Council, in which case the claimable mileage rate is the fuel element of the appropriate normal car allowance rate (available from the Payroll Section upon request).
9 PAYMENT CONTROL SHEET/SPREADSHEET
9.1Copies of all the claims made by an employee should be filed together and have a payment control sheet (Refer to Appendix 5) or an up to date print out of a resettlement spreadsheet placed in the front of them. This will act as a reference document to establish the amount of allowance outstanding to the claimant.
9.2Where VAT has been claimed on a service this should be highlighted on the payment control sheet / spreadsheet under the "Eligible VAT" column.
10 PROCESSING CLAIM
10.1At least three officers are always involved in processing claims before they are passed to the finance section of your department for payment. This is to ensure that claimants are always paid the correct amounts.
10.2Each claim is allocated a number as they are submitted by the claimant, the first claim being number 1, the second number 2, etc. These numbers will then be used as references on the Payment Control Sheet. The claim number should be written in the top right hand corner of the form.
10.3Upon receipt of a claim the administrator of the scheme should check that the form is properly completed and signed by the employee, and that they are eligible to make claims in respect of those items. It is essential at this stage to refer to the payment control sheet or up to date spreadsheet, in connection with the resettlement agreement, to ensure that the claim will not take the individual beyond their entitlement. The claim can then be processed for payment.
10.4The administrator completes the coding block and updates the payment control sheet / spreadsheet or if the claim is for lodging allowance or excess travel allowance (allowance available for 13 weeks), use the Lodging/Excess Travel Payment Control Sheet.
After the thirteen week claim period for Lodging/Excess Travel, any further claims should be claimed from the overall allowance and entered on the Payment Control Sheet/spreadsheet.
If the 13 week period has been extended by the Business Support Manager, continue to use the Lodging /Excess Travel Payment Control Sheet until the end of the extension period, after which further claims should be made from the overall allowance and entered as above.
10.5Each claimant will need an individual financial code, which can be obtained from their finance section. This will then need to be inserted in the coding block, under the heading "short code" on each claim form.
10.6Under "Ledger Details" the employee's surname and initials are entered.
10.7"Resettlement Expenses" and the claimants post number are inserted in the box headed " Remarks Mandatory Remittance Details". This information will then be printed on the remittance advice slip attached to the cheque.
10.8If the item being claimed is subject to the standard rate of VAT (currently 17.5%) then under the column headed "Amount" the net cost (excluding VAT) is entered, and the letter "S" is inserted in the "VAT IND" column. For further details relating to VAT refer to paragraph 10.
10.9If the item being claimed is not subject to the standard rate of VAT, or if no VAT receipt is provided, then the item is classed as zero rated, and "0" is inserted in the "VAT IND" column.
10.10Regardless of the number and type of items claimed the total amount of VAT being claimed is identified in the row headed "VAT AMT".
10.11Unless requested by your finance section, the administrator will not need to complete any details under the following headings; Supplier Details, System Reference, Job Code.
10.12The administrator then signs the calculations box (marked "CALCNS") at the bottom of the coding block. Please note that the box must be signed, not just initialled.
10.13The following completed examples can be found in appendices:
Payment Control SheetAppendix 5
Payment Control Sheet
(13 week lodging/excess travel allowance)Appendix 7
Form R1Appendix 8
Form R2Appendix 9
10.14The claim forms, with completed coding blocks, should be checked by a second person prior to authorisation.
10.15The Business Unit Manager, must then authorise the claim, by signing both beneath the claimants signature and on the coding block.
10.16Copies of all claim forms and accompanying receipts are to be taken and retained within the department before the original claim forms are sent to the Department of Finance, for a cheque to be raised.
10.17It is usual for the cheque to be posted to the address where the employee is currently resident. Any alternative to this arrangement should be clearly identified on the form or by using the Cash Book Message facility.
10.18Where VAT is being claimed, a VAT receipt should be attached to the claim form and the amount of VAT to be claimed should be clearly highlighted.
11 VAT CLAIMABLE EXPENSES
11.1The Council can reclaim the VAT incurred by the claimant on those expenses which produce no material benefit. These costs must relate specifically to the transfer of the employee into a new home. This includes:
-Legal fees and estate agent's fees for selling an existing home
-Legal fees and stamp duty for buying a new home
-Furniture removal
-Cost of connecting services.
11.2VAT cannot be claimed on any item from which the employee gains a material benefit, for example, carpets, curtains, fixtures and fittings.
11.3If an employee wishes to claim VAT on any service they should obtain a VAT receipt to submit along with their claim form, clearly identifying total expenditure, net expenditure and amount of tax to claim. If the receipt does not include a VAT registration number this would indicate that the business is not VAT registered, in which case it is not possible to reclaim VAT.