Installation allowance - pre-departure expenses

Introductory note. In a resolution dated 13 February 1946, UN General Assembly authorized the Secretary-General to establish a scheme for installation allowances in respect of the installation of officials at New York. The Secretary-General subsequently approved a scheme whereby staff would receive subsistence allowance for a certain period after their arrival in a new duty station. The allowance was reviewed by the Salary Review Committee in 1956 (A/3209): some variations in the period resulted, but until 1991 the allowance remained a payment of subsistence allowance for a specified number of days. The installation allowance and the entitlement to reimbursement of pre-departure expenses were abolished with effect from 1 July 1991 and replaced by the assignment grant (see sections 2.12, 10.1 and 10.2).

CCAQ discussions have covered the following points:

(1)     Guiding principles were adopted at the 13th session (September 1952: CO-ORDINATION/R.132, para. 41).

(2)     At the 15th session (April 1954: CO-ORDINATION/R.162, paras. 25-27) CCAQ agreed that the purpose of the allowance was to cover extra costs in the initial period after arrival at duty station, but was unable to agree whether "extra costs" meant merely hotel costs or also the costs involved in moving into rented premises.

(3)     At the special session in March 1957 on salary matters (CO-ORDINATION/R.244, para. 39) CCAQ agreed that Rome should be an exception to the normal period for the allowance. All such exceptions would be reviewed annually.

(4)     At the 19th session (March 1958: CO-ORDINATION/R.264) UNESCO stated that an exception was needed at Paris, but at the 20th session (April 1959: CO-ORDINATION/R.295, para. 69) CCAQ decided on the basis of UNESCO's report that no exception there was necessary.

At the same session CCAQ revised certain per diem rates and, to avoid a consequential increase in installation allowances for General Service staff, drew up a separate schedule of installation amounts for such staff at the main offices (see Annex IV, CO-ORDINATION/R.264). This was abandoned at the 21st session (first part) (April 1960: CO-ORDINATION/R.325), after which General Service staff were on the same footing as other staff.

(5)     At the first part of its 21st session (April 1960: CO-ORDINATION/R.325, paras. 90-94) CCAQ stated that "in dealing with special situations requiring review of the standard rates of installation grant consideration is given to the added costs of food and lodging and to other major installation costs of an abnormal or unusual nature". Responsibility for analysing data and making recommendations regarding exceptions, which should be avoided wherever possible, should rest with UN Office of the Controller in the case of all areas other than headquarters location. For the latter the organizations concerned were responsible, subject to prior CCAQ agreement.

Exceptions then in force were as follows:

     Geneva:     45 days for staff with dependants (maximum $ 2,000), 20 days for others;

     Rome:        minimum amount of $ 250; otherwise, normal conditions;

     Ghana:       as for Geneva, except in the case of technical assistance experts (these had more favourable housing arrangements)

The practice of paying lower amounts to General Service staff (see para. (4) above) was abandoned.

(6)     At the first part of the 22nd session (January and March 1961: CO-ORDINATION/R.351, para. 42) the exception for Rome was discontinued. Those for Geneva and Ghana were continued, but FAO was asked to circulate up-to-date information on the Ghana position.

The Committee noted that in Lagos ILO paid installation allowance without limitation of period - i.e. until the staff found housing. TAB undertook to get up-to-date information regarding the housing position there. Later in 1961, at a special session on salary matters, it was agreed that in certain special areas (in particular, West Africa) "designated officials" (normally Resident Representatives) should be authorized to extend the installation period for experts - see para. 81 of CO-ORDINATION/R.391 (23rd session: March 1962); the arrangement should, however, be reviewed and a report on experience was to be circulated before the end of 1962 (CO-ORDINATION/R.391, para. 82).

(7)     At the second part of the 22nd session (July 1961: CO-ORDINATION/R.373, paras. 25-26) CCAQ agreed that until certain other measures relating to housing (see section 14.4, para. (2)(a)) and review of post adjustments (see section 2.4, para. (10)) could become effective, interim arrangements should be made in West Africa wherever the Resident Representative (or other designated local official) certified them to be indispensable. They should take the form of a "supplementary installation grant" for "an appropriate period up to a maximum of 45 days beyond the normal limit of 30 days for staff with dependants and 15 days for staff without dependants, and even beyond the period during which the official had to live in a hotel".

UN Controller, in consultation with TAB secretariat, would as soon as possible establish "interim standards and criteria which can guide the designated local certifying officers" in dealing with individual cases.

(8)     At the 23rd session (March 1962: CO-ORDINATION/R.391, paras. 50-53) the Geneva exception was continued, then being the only exception outside the "special areas" (see para. (6) above). ICAO requested an exception for Paris, but this was not agreed. Arising out of a discussion on installation expenses in Pakistan, CCAQ stated that "while ... it was not practical to develop really precise criteria to be applied, it was agreed that ... the matter should be pursued further with a view to developing a practical and realistic basis for applying any exceptions to the normal installation grant arrangements on a common and uniform basis".

(9)     At its 24th session (March 1963: CO-ORDINATION/R.430, paras. 34, 35 and 54, 55) CCAQ noted that in March 1963 the only exceptions to the standard provisions for installation grant outside the "special areas" were for Geneva (forty-five days for staff with dependants and twenty days for other staff) and for Pakistan (forty-five days for staff with dependants when assigned to Dhaka and Lahore). It was agreed that the exception for Geneva would be maintained and that Pakistan should be transferred to the list of special areas. (The Geneva exception was ended, by agreement of the organizations at Geneva, on 30 June 1963).

(10)     At the same session, the Committee agreed that extension of the installation period was still necessary in field stations where serious housing shortages existed. For 1963 and thereafter, the list of such areas would be established by CCAQ and would be subject to periodic review by the central services of UN Controller's Office. Designation of field certifying officials would continue to be made by TAB secretariat after consultation with the organizations. The period for extension of installation grant was limited to a maximum of 75 days for a staff member with dependants and 60 days for staff without recognized dependants. It was agreed that the daily subsistence allowance rates established for the "first sixty days" in an area should be used throughout the installation allowance period, even when extended. It was further agreed that with effect from 1 April 1963 the list of exceptional areas should be as follows:

Burundi Mali
Cameroon Mauritania
Central African Republic Niger
Chad Nigeria
Congo (Brazzaville) Pakistan (at that time including the present Bangladesh)
Dahomey (later renamed Benin) Rwanda
Gambia Saudi Arabia
Ghana Senegal
Guinea Sierra Leone
Indonesia Sudan
Ivory Coast Tanganyika (see para. 12)
Laos Togo
Liberia Upper Volta (later renamed Burkina Faso)

(11)     At its 25th session (April 1964: CO-ORDINATION/R.451, paras. 47-53) CCAQ added to the above list, with effect from 1 May 1964.

Congo (Leopoldville) - later renamed Zaïre

According to the list in para. 48, CO-ORDINATION/R.451, Viet-Nam had also been added but Dahomey eliminated. It was agreed that Indonesia included West Irian for purposes of the list. Exceptions in these areas were to be granted on an individual case basis.

(12)     At its 26th session (March 1965: CO-ORDINATION/R.488, paras. 28-30) the list as stated in paras. (10) and (11) was confirmed (substituting Tanzania for Tanganyika). Subsequently UN notified organizations that Gabon, Kenya and Uganda should be added.

(13)     At the 27th session of CCAQ (March 1966: CO-ORDINATION/R.532, para. 44) no changes were reported in the list of exceptional areas. It was decided that future changes would be agreed by correspondence, so that the matter would appear on the CCAQ agenda only if questions of policy or general terms of application were involved. Henceforth, the Handbook should not be relied upon for an up-to-date list of exceptional areas; organizations should maintain their own list of the basis of notifications from the UN Office of the Controller.

(14)     At its 29th session (March 1968: CO-ORDINATION/R.669, para. 60) CCAQ agreed that:

     (a)     with effect not earlier than 1 January 1969 a lump-sum element should be added to installation allowance (per diem) provisions for field staff. It should not be payable to staff appointed or transferred to headquarters locations. It should in principle not be payable in North America or Europe, but CCAQ, by agreement, may designate specific locations in these continents where the lump sum would be payable in the case of assignments to project locations. Any organization may exclude the payment of the lump sum in the case of staff appointed or transferred to large permanent offices located in other continents, when the conditions of life for staff at the offices concerned did not warrant the payment. Project locations in North America and Europe where the lump sum was payable would be determined by agreement of the organizations concerned through the UN Office of the Controller;

     (b)     the amount of the lump sum should be $ 300 for staff without dependants and $ 600 for those with dependants who accompanied them to the duty station.

(15)     Also at the 29th session (March 1968: CO-ORDINATION/R.669, paras. 62-63) CCAQ re-examined the system whereby the installation allowance period could be extended in individual cases where a staff member, because of shortage of housing, was obliged to remain in a hotel beyond the normal period. CCAQ agreed that this system would be continued with two modifications, which should be effective from the date of introduction of the lump-sum payments:

     (a)     the existing provision whereby an extra 15 days' per diem (beyond the period actually spent in a hotel) was payable to cover exceptional costs should be cancelled in view of the introduction of the lump sums;

     (b)     the rate of per diem entitlements during any extended installation period should be 75 per cent of the normal entitlement per head in the initial period, since it was reasonable to take account of savings on normal costs of food and accommodation.

The maximum periods should remain at 75 days and 60 days for staff with and without dependants respectively.

(16)     At its 30th session (March 1969: CO-ORDINATION/R.733, paras. 61-63) CCAQ agreed that:

     (a)     the lump sums should be payable from 1 July 1969 at project locations in Albania, Bulgaria, Czechoslovakia, Hungary, Poland, Romania, and Turkey;

     (b)     as a general rule, no lump sum should be paid to staff to whom completely furnished housing was made available by a government or by an organization within the installation (daily rate) period. WHO reported that the housing arrangements for its staff in Brazzaville precluded payment of the lump sums. UNDP Resident Representatives would assist organizations in determining when housing could be considered to be completely furnished.

     (c)     a lump sum could not be excluded because an official was eligible for a rental subsidy;

     (d)     $ 300 was the appropriate rate for an official whose dependants do not accompany him to the duty station, but an additional $ 300 may be paid if some of the dependants join him later.

(17)     At the same session CCAQ agreed that the normal installation period should not be extended when the official was receiving temporary lodging without charge or at nominal cost while awaiting more permanent accommodation.

(18)     At its 31st session (March 1970: CO-ORDINATION/R.798, paras. 58-61) CCAQ confirmed the provisional agreement recorded in para. (16) above. It agreed that Cyprus was one of the countries in which the lump sums could be paid. Any organization which wished to propose changes in the list should present the evidence supporting a change to the UN Controller.

A question was raised as to whether, in a case where an official was transferred from one duty station to another within the same country (this being a country in which the lump sums were payable) a second lump sum should be paid. CCAQ agreed that if in the opinion of the executive head concerned the transfer involved such a change of conditions that payment of a second lump sum would be justified, then it might be paid.

With respect to a question whether normal installation allowance would be payable to an official whose status had changed after a period of service during which he had been paid subsistence allowance while in short-term status, CCAQ agreed that depending on the circumstances of the change of status the installation allowance might be withheld or reduced.

(See also annex G of CO-ORDINATION/R.798 on travel entitlements, which has certain implications in respect of payment of installation grant).

See section 18.1 with respect to the question of currency of payment of the lump sums.

(19)     At its 33rd session (March 1971: CO-ORDINATION/R.863, para. 38) CCAQ agreed that extensions of the period for which installation allowance might be paid could be made at headquarters duty stations provided that the existence of exceptional housing difficulties was supported by evidence that over 50 per cent of the new arrivals during the preceding six months had been obliged to remain in hotel accommodation beyond the normal installation period. The decision to extend would be taken jointly by all organizations having headquarters at the duty station, and would be subject to periodic review at six-monthly intervals. Payment of the allowance might, according to the duty station, be extended to a maximum of 60 days for all staff members accompanied by dependants, and 30 days for those not so accompanied. During the extension period the allowance would be paid at 75 per cent of the normal rate.

(20)     At a special session in June 1971 (CO-ORDINATION/R.885, para. 18) CCAQ agreed, with ILO reserving its position, that the maximum periods for which installation allowance should be paid in individual cases in field duty stations where the resident representative certified that the offical and his family had been obliged to remain in a hotel while seeking more permanent living quarters should be increased to 75 and 90 days (for staff respectively without and with dependants at the duty station). It did not agreed to a UNDP proposal for a 25 per cent increase of the lump sum payments.

(21)     At its 35th session (March 1972: CO-ORDINATION/R.931, paras. 32-33) CCAQ agreed, with ICAO reserving its position, that the agreement recorded in para. (20) above could be implemented as of 1 January 1972. The extended installation allowance should be paid only at duty stations where the lump-sum element of installation allowance was payable. UNDP Resident Representatives might recommend to the Headquarters of a particular staff member that it should authorize an extension of the allowance for periods beyond the approved maxima where failure to do so would result in real financial hardship. The fact that the official was obliged to continue living in a hotel would not in itself constitute evidence of such hardship. The amount per day of any installation allowance extended beyond the initial period (30 days for staff accompanied by dependants and 15 days for staff not so accompanied) should be 60% of the daily subsistence allowance ("first 60 days" rate) for the duty station concerned for the staff member and 30% of the DSA for each eligible dependant accompanying him. This agreement does not affect the decision of CCAQ on extended installation allowance at headquarters duty stations as set out in (19) above.

(22)     In its second annual report (1976: UN document A/31/30, paras. 77, 294-300), and on the basis of its review of the UN salary system, ICSC recommended no change in the installation allowance for staff in the Professional and higher categories.

(23)     In its fourth annual report (1978: UN document A/33/30, paras. 276-279) the Commission decided to standardize the installation grant at 30 days of the relevant per diem regardless of dependency status, and to modify the provisions governing lump sum installation grant to provide for payment of a lump sum corresponding to $ 300 for the staff member and for each dependant up to a total of four persons, including the staff member. This decision was based on a recommendation by CCAQ (see CO-ORDINATION/R.1294, para. 31(b)).

(24)     At its 55th session (July 1981: ACC/1981/31, paras. 117-119) CCAQ considered whether installation grant ought to be reduced when fully furnished accommodation (not hotel) was provided to staff immediately upon their arrival at the duty station. Some organizations considered that a reduction was called for while others doubted that there was any legal basis for such a reduction.

(25)     In the context of a review of selected entitlements of field staff, ICSC agreed at its 16th session to increase the lump sum of the installation grant to $ 600 for staff members and dependants, subject to a maximum payment of $ 2 400 per family, with effect from 1 January 1983 (eighth annual report, A/37/30, paras. 233-242).

(26)     At its 18th session (July 1983; A/38/30, para. 124) the Commission agreed to the reimbursement of pre-departure expenses for staff departing from non-headquarters duty station subject to the following conditions:

     (a)     Reimbursement should be affected against proven use of hotel accommodation;

     (b)     It should be limited to a maximum of 60 percent of the daily subsistence allowance rate for the duty station concerned. Up to one-half of that rate may be paid in respect of dependants;

     (c)     No payments should be made in respect of initial appointment of the staff member.

(27)     At its 61st session (June-July 1984: ACC/1984/16, paras. 91-94), CCAQ considered a package of proposals concerning the installation grant presented by UNDP. It agreed that it would not be appropriate to limit the payment of the so-called daily subsistence allowance element of the grant (i.e. not lump sum) to the period actually spent in a hotel by the staff member, or to propose an increase in the level of the lump-sum element. The extension of the lump-sum element to Europe and North America, under certain conditions, would require further study.

(28)     During deliberations on the eligibility conditions for reimbursement of pre-departure expenses which lasted over several sessions, it was noted that some organizations had implemented the decision in para. (26) above in such a way as to include staff departing from non-headquarters duty stations on separation. At the same time, the Committee believed that the exclusion of headquarters duty stations from eligibility for reimbursement of pre-departure expenses ran counter to the original intent of the measure (which was to enhance mobility) since, if anything, it was more difficult to induce staff to accept reassignment from headquarters to the field than vice versa, or between field duty stations. It therefore agreed, at its 63rd session (June-July 1985; ACC/1985/6, paras. 121-125) to recommend to the Commission that it amend its decision on pre-departure expenses to include reimbursement thereof to staff departing from any duty station on reassignment (implicit in this proposal was the understanding that organizations which had been reimbursing such expenses in cases of separation would discontinue this practice).

(28)     At its 22nd session (July 1985; A/40/30, para. 199), the Commission drew the attention of organizations to the fact that pre-departure expenses were not to be reimbursed upon separation of a staff member from service. Neither could it agree, in the context of conditions of service in the field, to review extension of the current scheme to cover locations other than in the field. The Commission's secretariat was, however, requested to study the need for pre-departure expenses to be reimbursed at other duty stations and to report thereon to the Commission.

(30)     Also at its 63rd session, CCAQ concluded that organizations' practices regarding extensions of the installation grant beyond 30 days but not exceeding 90 days were generally uniform. It was,

nonetheless, agreed that a more uniform approach should be encouraged in cases of extension beyond the 90th day; this would be facilitated if a joint recommendation, based on consultations at the field level, was brought to the attention of organizations (ACC/1985/14, para. 103).

(31)     At the 64th session (March 1986), CCAQ agreed that the question of the extension of reimbursement of pre-departure expenses should be placed on the Committee's work programme and taken up at an appropriate point in the future (ACC/1986/3, paras. 46-47).

(32)     Also at the 64th session, the Committee informed ICSC that a special arrangement for the payment of extended installation grant in Hanoi, promulgated by the ICSC Chairman, was in the process of being implemented by the organizations (ACC/1986/3, para. 116).

(33)     In accordance with the new mobility and hardship package for Professional and higher-level staff recommended by ICSC in 1989 (A/44/30, vol. II, paras. 330-333) and approved by the General Assembly (resolution 44/198) the installation grant, including its pre-departure allowance component, ceased to exist as from 1 July 1991. For field duty stations both the DSA and the lump-sum components were incorporated into the new assignment grant; for headquarters duty stations the DSA component (along with the furniture element of the previous assignment allowance) became the new headquarters assignment grant (see section 2.12). Details of the new arrangements are set out in paragraphs 306 and 323-327 of the Commission's 1989 report (A/44/30, vol. II.).

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