What is considered a generous remuneration scheme and how should we compensate for the loss of the spouse's income? Our compensation expert answers these and other questions on expat remuneration schemes.

I would like to understand what is the norm, what is considered generous and vice versa.
 
In particular I would like to understand how the issue of the loss of the spouse's income is dealt with in various schemes.
 
For instance would it be reasonable for a family to have a lower income after they have relocated to a country where the wife cannot work?
 
For expats from the UK, is it normal to cover the spouse's pension contributions, national insurance contributions and the child benefit.
 
Is it common to apply the home country housing norm and reduce the housing allowance accordingly, or is it more common to allow the expat to rent out their house as they see fit.
 
Best Regards,
 
Steve Willis, Engineering Manager, Gas and Refineries

John Pfeiffer answers:

Dear Steve,

Thanks for your questions. 

The area of spousal assistance is a tricky one, but one in which a lot of benchmarking information exists. I can give you some general information in this reply, but would caution you that practice varies widely depending upon the HQ location of the company, industry group, and even home countries of the assignee and spouse. 

A generous policy in the realm of spousal allowance generously includes two or more of the following:

• Help with work permits.
• Help with CV preparation.
• An annual allowance (usually of USD 5,000) which can be used either at the spouse's full discretion or against receipts for certain approved expenditures.
• Access to a spousal network.
• Specialist career consulting.

Very generous programs might include:

• An offer of local employment for the spouse.
• A higher allowance or reimbursement of further education.

I am not aware of too many companies outside Scandinavia who make up any of the partner's income or pension benefits. 

The norm, then, is to provide only an allowance of approximately USD 5,000 per annum and leave the support at that. 

In terms of applying a housing norm, again, practice varies between US and European companies. 

US companies usually do withhold a housing norm, while European companies typically deliver "free" housing.  However, US companies also typically compensate for costs associated with, and loss on the sale of home country housing.   European firms tend to adopt a more laissez-faire attitude on this topic. 

I am happy to get more into detail as needed.  We maintain some good benchmarking data and would be happy to have you participate. 

Best regards,

John Pfeiffer
Senior Consultant
Client Programs Development
AIRINC (Associates for International Research, Inc.)

+1 617 250 6608
Email: JPfeiffer@air-inc.com
www.air-inc.com 

16 March 2007      

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