Certified Relocation Professional (CRP) Practice Exam

Which of the following is a common feature of a lump sum relocation package?

1. Funds must be documented for tax purposes

2. Fixed amount irrespective of relocation costs

3. Offered exclusively to new hires

4. Includes assistance with home sale

The correct answer is: Fixed amount irrespective of relocation costs

A common feature of a lump sum relocation package is that it is a fixed amount given to the relocating employee, regardless of their actual relocation costs. This structure provides the employee with the freedom to spend the funds as they see fit, whether that's for moving expenses, temporary housing, or other personal costs associated with the relocation. This approach simplifies the process for both the employer and the employee. For the employer, it eliminates the need for detailed tracking and reimbursement of actual relocation expenses, as the lump sum is predetermined. For the employee, it offers flexibility and encourages responsible budgeting as they handle their own moving costs without undue oversight from the employer. Other options present certain features that may arise in relocation packages but do not specifically define the unique characteristic of a lump sum arrangement. While some packages may have stipulations regarding funds and taxation or might be extended to new hires, these are not defining attributes of lump sum packages. The inclusion of assistance with home sales is more commonly found in comprehensive relocation packages rather than those strictly utilizing a lump sum approach.