Housing difficulties of staff (including rental subsidy)

Introductory note: When the UN was established in New York many staff had difficulty in finding housing, and the organization made arrangements, in conjunction with commercial concerns, to find housing. Apartments in commercial developments were reserved for officials, UN guaranteeing the rent during any period of vacancy. As the housing shortage eased, these arrangements were ended, but a new problem arose in that some staff who wished to buy their own houses were unable, for currency and other reasons, to find the necessary capital for a down-payment on purchase. A proposal was made in 1955 in the Fifth Committee of the General Assembly that staff might be permitted to borrow, under suitable safeguards, from the Pension Fund, an amount not to exceed the actuarial value of their earned pension entitlement, but the proposal was rejected.

Subsequent CCAQ discussions have covered the following points:

(1)     At the second part of the 21st session (August 1960: CO-ORDINATION/R.336, para. 35) UN reported, and other organizations agreed, that there was no basis for re-opening the question of using Pension Fund money to finance housing loans to staff.

(2)     At the second part of the 22nd session (July 1961: CO-ORDINATION/R.373, para. 22), CCAQ considered the problem of housing difficulties at certain duty stations in West Africa. It agreed that:

     (a)     installation grant could be extended in certain circumstances (see section 4.5 para. (7));

     (b)     it was not out of the question that organizations, individually or jointly, might rent, build or buy housing for the staff;

     (c)     the best approach, though further study was required, was probably that organizations should supply housing and charge officials an appropriate proportion of salary as rent, subsidizing the difference between that amount and the actual rent paid to the owner;

     (d)     TAB should be asked to consider an approach to governments to emphasize the importance of adequate housing if experts were expected to remain in the area for an extended period;

CCAQ further agreed that:

     (a)     where difficulties could be solved by leasing accommodation for long periods, TAB should be authorized to take the initiative in making a proposal to that effect to the organization concerned, the matter being decided by correspondence. Leases could be signed by TAB Resident Representatives or other designated officials, the rent being paid by the organization, which would charge a reasonable rent to the expert. Reasonable rents could be determined by the formula evolved under the previous lodging-in-kind system;

     (b)     TAB should be requested to employ (on a shared-cost basis if necessary) one or two consultants to make an expert field study of housing problems and solutions. The study should include a review of actual rentals;

     (c)     where an expert received housing from a government, at little or no cost, organizations should make an appropriate payroll deduction for rent;

     (d)     governments were not expected to provide accommodation at uneconomic rents.

(3)     At the 23rd session (1962: CO-ORDINATION/R.391, paras. 77-80) CCAQ again reviewed housing problems in areas of difficult climatic or living conditions, taking into account a TAB secretariat report on the basis of which TAB had declared that where suitable housing was not available the programme should not on that account be suspended, but the organizations should resort to extraordinary measures to obtain housing.

(4)     Also at the 23rd session, CCAQ agreed that the interim arrangements for extension of installation allowance period should be continued (see 2(a) above), as would the related "Policies and Procedures" issued on 15 November 1961. TAB was requested to bring up to date the list of designated officials, and the latter were to be asked to supply concrete information from which a report could be prepared.

(5)     At its 24th session (March 1963: CO-ORDINATION/R.430, paras. 54-56) CCAQ noted that the November 1961 policies and procedures remained applicable "pending review and possible revision".

(6)     At its 25th session (1964: CO-ORDINATION/R.451, paras. 76-87) CCAQ agreed that where officials lived in housing provided directly or indirectly by the organization the rent should be based on the accommodation provided and not fixed as a percentage of salary. Average rentals should not, however, exceed the housing element included in the local post adjustment calculations. It agreed also that in certain circumstances organizations would be justified in subsidizing rentals of staff who were paying substantially higher rents than those of colleagues in the same area who occupied housing provided by a government or an organization at reasonable rents.

(7)     At the same session (CO-ORDINATION/R.451, paras. 88-96) CCAQ agreed, at the request of TAB, to study the possibility that organizations might provide project personnel at certain duty stations with articles such as refrigerators, heaters and air-conditioners.

(8)     At its 26th session (1965: CO-ORDINATION/R.488, paras. 43-47) CCAQ reviewed experience with the rental subsidy referred to in para. (6). The UN Controller had issued a list of housing costs taken into account in fixing post adjustments in the areas concerned. It was reiterated that a rental subsidy should not be granted automatically but only after review of all the circumstances; the accommodation rented by staff members should be of a reasonable standard in relation to their grade and number of dependants. TAB undertook to compile a central register of suitable housing in shortage areas. It was also agreed (CO-ORDINATION/R.488, para. 42) that the question of air-conditioners, etc. should be dealt with as part of the study on assignment allowance and related benefits.

(9)     At its 29th session (March 1968: CO-ORDINATION/R.669, paras. 64-66) CCAQ agreed that a UNDP proposal to introduce a rental allowance system in certain countries where the normal post adjustment system prevailed would require legislative authority, and would entail payment of rent subsidies to officials whose rents were not excessive in relation to their salaries, by the standards found in headquarters and many other duty stations. CCAQ agreed that it would be preferable to examine alternative systems of rent allowance, or alternative methods of dealing with the problem of widely disparate rents paid by different officials in some duty stations. It examined the possibility of dealing with the countries concerned by bringing them within the scope of the existing CCAQ scheme. It concluded that in view of possible technical difficulties in doing so, due to the fact that there was no standard rental in the post adjustment index (which, moreover, already reflected average rents including the rents of the officials who would be subsidized), the matter should be further explored between UN and UNDP. The results of the exploration should be communicated to other organizations for comment. Organizations should also be informed of the actual variations and amounts of rents paid by staff members in the countries.

CCAQ recalled that it had agreed that in cases where experts were supplied by governments with housing at no cost or nominal rent, there should be a payroll deduction (see para. (2) (c) above). It recommended that the deduction should be based on the rental component of the post adjustment, taking account of the economic rental value of the housing concerned. Staff should be made aware of the basis on which the deduction was assessed. Resident Representatives should report to organizations all cases of experts who were provided with government housing at no or only nominal cost. Organizations should ensure that the CCAQ agreement was applied.

(10)     At its 30th session (March 1969: CO-ORDINATION/R.733, paras. 55-59) CCAQ considered whether in certain field stations where post adjustment was based on the cost of government housing, and where rental subsidy was payable to staff who paid appreciably higher rents, it would be preferable to base the post adjustment on commercial rents with salary deductions for staff in government housing. CCAQ agreed that such a system would be more difficult to administer than the existing one.

(11)     At the same session, CCAQ reaffirmed the agreement by which organizations should make appropriate charges to staff who enjoyed free or nominal-cost housing. Organizations would report to the next session the action they were taking in the matter. UN Office of the Controller would assist organizations in achieving co-ordinated action.

(12)     In 1974, as a preliminary step towards a complete examination of housing problems of field staff at its 41st session, CCAQ (see CCAQ/SEC/336 (PER), paras. 22-24) decided that the existing arrangement for rental subsidies could, subject to certain stated criteria, be extended to a limited number of duty stations where housing was a serious problem and could not be adequately reflected in the post adjustment.

(13)     The limited measure described in (12) did not suffice and already at the 41st session (1974) CCAQ was informed by UNDP that that organization and UNICEF had introduced unilaterally an extension to all their newly appointed field staff of a benefit previously extended only to Resident Representatives which consisted of paying a subsidy during the first two years at a duty station of 80% of the cost of rent in excess of 20% of salary plus post adjustment plus assignment allowance. CCAQ attempted without success, at that session and again in August, to achieve a reconciliation between the UNDP and "extended" CCAQ formulae. (CO-ORDINATION/R.1087, paras. 34-37 and CO-ORDINATION/R.113, para. 18).

(14)     At its Special Session No. 1 (January 1976: CO-ORDINATION/R.1133, para. 6), CCAQ agreed on the general lines of developing an acceptable common scheme for housing subsidies for field staff.

(15)     At the same session (CO-ORDINATION/R.1133, para. 5 and Add.4), CCAQ agreed on a draft ACC text for ICSC (later cleared by correspondence) on conditions of service for staff in the field, which included a discussion of the need for a common housing subsidy scheme.

(16)     At its 43rd session (March 1976: CO-ORDINATION/R.1145, paras. 11-14), CCAQ agreed that the development of a proposal for a global formula for housing subsidies would have to be pursued by the UN, UNDP and the ICSC secretariat. It further agreed that the Chairman of CCAQ would draw the attention of the ICSC secretariat to certain specific problems needing urgent examination.

(17)     At its 47th session (August 1977: CO-ORDINATION/R.1237, paras. 32-34), CCAQ requested that a specific proposal be prepared for a new housing subsidy scheme for field staff which would resolve the existing differences between the organizations. In the meantime, however, it agreed that: (a) cases of high housing costs in particular areas should be referred by the organizations concerned to the ICSC secretariat to determine whether those areas could be included in the list of duty stations eligible for rental subsidies; and (b) the ICSC secretariat would be asked to look into the possibility of providing additional assistance to P-1 and P-2 staff who, even after payment of rental subsidy under the existing CCAQ scheme, had to pay for rent an unreasonably high proportion of their net emoluments.

(18)     At its 48th session (January 1978: CO-ORDINATION/R.1263, para. 14) CCAQ approved a submission to ICSC proposing a single scheme of compensation for housing costs in field duty stations. ICSC approved the proposed scheme at its 7th session (February-March 1978) initially for a trial period of one year, later extended to the end of its 11th session (March 1980).

(19)     At its 11th session (March 1980), ICSC approved a revised rental subsidy scheme for implementation, initially on an experimental basis, effective 1 July 1980 (in duty stations outside Europe and North America). The principal modification consisted in computing subsidies by reference to the average relationship of gross rents to incomes of staff members at each duty station (6th annual report, A/35/30, paras. 229-233).

(20)     At its 15th session (March 1982), ICSC confirmed the value of the rental subsidy scheme and agreed that it should continue to be applied, with some modifications (ICSC/15/R.26, para. 84).

(21)     At its 57th session (July 1982), CCAQ reviewed two decisions by ACC related to housing problems (decision 1982/4 refers). The first was that ICSC study the possibility of housing costs being handled independently of the post adjustment system. The Committee noting that the Commission had had this question before it for some time, agreed to urge the Commission to proceed forthwith with the studies it had earlier agreed to undertake (ACC/1982/23, para. 67). ACC had also decided that joint efforts should be encouraged by organizations to provide accommodation for newly arrived staff members, and had recommended that they seek approval for the purchase or construction of housing where it did not exist or was acutely scarce. The Committee concluded that the initiative for both of these actions would come from the field; the Resident Co-ordinator could be asked by UNDP to act as the focal point for efforts in these two areas.

(22)     At its 16th session (July 1982), ICSC recognized the need for urgency in the extension of the rental subsidy scheme to duty stations not currently eligible. It invited a special working group to examine the question and make recommendations to it at its 17th session (March 1983) (ICSC/16/R.24, para. 34(d)).

(23)     At its 17th session (March 1983), ICSC approved, effective 1 April 1983, the extension of the rental subsidy scheme to duty stations in Europe and North America, in respect of newcomers to the duty station and those who were forced to change dwellings (ICSC/17/R.28, paras. 71-79; A/38/30, para. 44).

(24)     At its 18th session (July 1983), in light of the decision it took relating to non-resident's allowance, ICSC agreed to extend to non-locally recruited General Service staff in duty stations where the NRA would not be payable (see section 2.5) the provisions concerning rental subsidy as applied in Europe and North American duty stations (9th annual report, A/38/30, para. 61).

(25)     At its 18th session (July 1983), the Commission also agreed to the reimbursement of certain pre-departure expenses due to housing difficulties (see section 4.5 for details).

(26)     At its 21st and 22nd sessions (1985), ICSC reviewed various aspects of the operation of the rental subsidy scheme. CCAQ's views on these matters are recorded in the reports of its 62nd and 63rd sessions (ACC/1985/6, paras. 43-50 and ACC/1985/14, para. 105, respectively). The Commission decided at its 21st session to include capital and other major cities as locations where full or partial waivers of rental deductions could be applied for sub-standard housing provided by Governments or organizations (ICSC/21/R.24, para. 146). The scheme for internationally-recruited GS staff (see para. (23) above) should remain unchanged (ibid., para. 147). At its 22nd session, ICSC approved the establishment, effective 1 September 1985, of a rental deduction threshold of 64 percent of the rental subsidy threshold (A/40/30, para. 141).

(27)     At CCAQ's 62nd session (March 1985), CCAQ endorsed a proposal by UNHCR for the payment of a modified rental subsidy to staff assigned to remote duty stations. It agreed that organizations should inform the ICSC secretariat when that modification was applied to a duty station, in order to ensure co-ordination among the organizations (ACC/1985/6, paras. 51-52 and annex V).

(28)     At its 64th session (March 1986), CCAQ reviewed the situation where staff members experienced housing problems, on arrival, but were able to find acceptable housing within a period of 6 months to a year. Such a situation could lead to negative housing reports under the "hardship" scheme (see section 10.2) which could in turn generate a benefit under the scheme which would be applicable to all staff at the duty station, irrespective of whether they had found permanent accommodation or not. The Committee concluded that such cases lent themselves best to ad hoc solutions; the organizations concerned should keep the matter under active review (ACC/1986/3, paras. 100-102).

(29)     At its 66th session (March 1987), CCAQ endorsed a proposal on this matter by the tripartite working group on the classification of duty stations according to conditions of life and work (ACC/1987/4, para. 57). This proposal was approved by ICSC with effect from 1 July 1987 (A/42/30, para. 219). (See also section 10.2, para. (12).)

(30)     At its 67th session (July 1987: ACC/1987/10, para. 33), CCAQ endorsed proposals by ACPAQ concerning the determination of rental subsidy thresholds, as well as a proposal to adjust rental subsidy reimbursements at headquarters duty stations in order to compensate for the effects of the post adjustment freeze at the base city. These proposals were approved by ICSC at its 26th session with effect from 1 August 1987 (A/42/30, paras. 162-163). CCAQ also endorsed a proposal by the ICSC secretariat for the application of actual rent-to-income ratios at all locations with a PAI below 122. It was, however, unable to support a proposal by the ICSC secretariat for the elimination of rental deductions (ACC/1987/10, para. 82). ICSC approved the first of these proposals, with effect from 1 August 1987 (A/42/30, para. 198).

(31)     Housing was an element in the remuneration structure suggested by a study commissioned by CCAQ in 1988 in response to the General Assembly's request for a comprehensive review of conditions of service for the Professional and higher categories (ACC/1988/12, annex IV). It also figured prominently in the discussions of the working group on the review set up by ICSC, although the group's report did not settle the issue of how housing would figure in any new remuneration structure (see ACC/1989/14, paras. 30-53, which also summarizes the discussion in CCAQ). ICSC was similarly unable to reach agreement on this issue, and instead set up another working group to help carry out further work on the remuneration structure. In its resolution 44/198 the Assembly urged the Commission to complete in 1990 its work on a revised structure, including the impact of such a structure on the housing needs of staff in hardship duty stations.

(32)     The working group set up to examine the structure of remuneration (see para. (31) above) reported early in 1990, having retained for testing three structures: one where the housing element would be separated at all duty stations, one where it would be separated at field stations only, and the existing structure. CCAQ at its 72nd session (February-March 1990: ACC/1990/4, paras. 6-20) concluded that none of these options was totally satisfactory and proposed a re-examination of the issues involved. ICSC concurred, and set up a working group composed of members of the secretariat of ICSC, CCAQ, FICSA and CCISUA (A/45/30, paras. 58-73). The group outlined an alternative treatment for housing under the existing remuneration system, including modifications to the rental subsidy scheme and to the measurement of housing costs in the post adjustment system (ICSC/32/R.7; see also the report of ACPAQ, ICSC/32/R.5, paras. 28-42). This proposal, particularly the revised rental subsidy scheme, was generally well received in CCAQ (73rd session, July 1990: ACC/1990/10, paras. 6-10), and its essential elements were recommended by ICSC to the General Assembly. They separated duty stations into Group A (where housing could be maintained within the post adjustment system) and Group B (where it could not) and detailed the arrangements proposed - some of them on an experimental basis - for each category (for details, see the Commission's report (A/45/30), paras. 95-96). The General Assembly took note of the Commission's recommendations and asked it to establish a pilot project to simulate the operation of its proposals for Group B duty stations. It further asked the Commission to review its proposals for a revised rental subsidy scheme in the light of experience with the scheme currently existing at headquarters duty stations; to continue its examination of the overall remuneration structure; and to continue to improve the measurement of the housing component. Finally, the Assembly decided to introduce (effective 1 January 1991), as a provisional arrangement, a revision to the current rental subsidy scheme at headquarters locations, providing for reimbursement at the rate of 80 per cent for the first four years and 60 per cent, 40 per cent and 20 per cent respectively for the three following years (resolution 45/241).

(33)     Earlier, at its 72nd session (February-March 1990: ACC/1990/4, para. 60), reviewing the implementation of the new mobility and hardship package, CCAQ had agreed that pending a review in the context of a revised rental subsidy scheme, the modified arrangements agreed upon at its 62nd (spring 1985) session (see para. (27) above) should for the time being remain in effect. See also section 10.2.

(34)     Housing was also an issue in discussions in CCAQ and ICSC in 1990 on the conditions of service of staff at the ASG and USG and equivalent levels, in the context of the comprehensive review of Professional conditions of service carried out the previous year (ACC/1990/10, paras. 17-20: see also section 2.2). The Commission finally recommended that executive heads be authorized to exercise discretion to approve the granting of housing subsidies to those officials in cases where they needed to rent suitably sized and located accommodation; eligible officials would receive a maximum rental subsidy of 75 per cent of their threshold rent (for full text of this decision and the background in ICSC, see A/45/30, paras. 110-124 and annex XI). The General Assembly did not accept the recommendation.

(35)     Following discussions in CCAQ and ICSC in 1991, the Commission again recommended revised housing subsidy arrangements for USGs and ASGs and equivalent levels. These are set out in paragraph 173 (c) of the Commission's report (A/46/30, vol. I). For the discussion in CCAQ, see ACC/1991/17, paras. 58-61. The General Assembly deferred consideration of the ICSC recommendations.

(36)     At its 75th session (July-August 1991: ACC/1991/17, paras. 91-96; see also ACC/1991/5, paras. 64, 65) CCAQ agreed that, pending review by ICSC of the rental subsidy scheme, the period of eligibility of staff members at duty stations in Europe and North America affected by force majeure and otherwise eligible for rental subsidy should, from 1 January 1991, be extended from three to five years, the rate of reimbursement declining progressively from 80 to 20 per cent. (In its 1990 decision modifying the rental subsidy scheme the General Assembly (resolution 45/241) had made no mention of force majeure cases.) Details of the arrangements agreed by CCAQ were set out in ACC/1991/PER/CM/17 of 16 October 1991.

(37)     For 1991 discussions in CCAQ on the payment of a revised rental subsidy scheme for internationally-recruited General Service staff, see section 10.1.

(38)     At its 76th session (March 1992: ACC/1992/6, paras. 97-100) the Committee reviewed a number of suggested modifications, intended to improve the functioning of the rental subsidy scheme for headquarters duty stations. The Committee supported a proposal to replace the current regressive formula by a uniform 80 per cent, as at field duty stations, but thought the current seven-year limitation period was a useful additional control and should be retained. The Committee suggested other modifications could be considered such as the justification for the "40 per cent of rent" limit and the criteria for determining what were "reasonable" rents.

(39)     At its 77th session (July 1992, ACC/1992/23, paras. 22-24) the Committee considered further suggestions for the revision of the conditions governing eligibility for rental subsidy. ICSC reported positively on the scheme to the General Assembly but maintained the seven-year limitation period and the related regressive reimbursement formula as necessary controls and decided that the existing eligibility conditions should remain unchanged (A/47/30, para.130). The Assembly concurred (resolution 47/216 II D).

(40)     At its 78th session (March 1993, ACC/1993/6, paras.148-149) the Committee considered the application of the field rental subsidy scheme in Eastern European countries, instead of the extended rental subsidy scheme, on the grounds that these Eastern European countries were not classified as hardship duty stations and were included in the list of Group II duty stations for post adjustment purposes. CCAQ decided to confirm this position.

(41)    At its 92nd session (March 2000: ACC/2000/5, para. 14) CCAQ decided to inform ICSC of its willingness to cooperate with the ICSC secretariat in any review of the rental subsidy scheme and to report to ICSC that it had identified a number of concerns and anomalies which required attention by the organizations and would be reviewed urgently. The Committee underlined: (a) the need for simplification in this as in other areas and (b) the importance of the scheme, both in terms of attracting newcomers at all grade levels to the organizations as well as for the rotation and mobility of staff in those organizations where this was a requirement.

The Committee confirmed that a more fundamental reappraisal of the scheme would be necessitated by, and should be incorporated in, the review of the pay and benefits system. ICSC decided to note that CCAQ secretariat would work with the organizations to resolve some of the problems raised regarding the determination and application of maximum reasonable rents at headquarters duty stations and requested the CCAQ and ICSC secretariats to gather additional data on practices outside the common system and to provide additional information regarding the usage and cost of the current scheme (ICSC/51/R.13, para. 51).

(42)     ICSC, at its 52nd session (July-August 2000: ICSC/52/R.16, paras. 65-75), reviewed the rental subsidy scheme in response to a number of problem areas in its operation. The Chairman of CCAQ expressed gratitude for the information provided by ICSC secretariat on other international organizations, Member States and the private sector and noted that steps had already been taken to update and bring more consistency to some of the parameters used by the organizations administering the scheme. The Commission decided: (a) to take note of the information provided, (b) to note that CCAQ would continue to work with the organizations to resolve pending problems and (c) to request its secretariat, in cooperation with CCAQ secretariat, to complete the collection and consolidation on the application and cost of the scheme as soon as possible.


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