Former justice minister Roger Allen represents Inuvik Twin Lakes, but he will have to pay back living allowances collected since April after failing to prove he lives in Inuvik, as earlier claimed in his declaration of residence.
The MLA was previously eligible for up to $30,150 a year in accommodation allowances given to MLAs from outside Yellowknife to live in the capital.
The legislative assembly's board of management, announced on Monday that Allen will have to pay back accommodation claims dating back to April 1, including extra expense and Northern living allowances entitled to MLAs who must travel to Yellowknife to work.
Speaker of the legislative assembly Paul Delorey, said the board of management is demanding the money back because other than a lease title for a property listed as 107 B East Campbell Lake, Allen didn't submit any other evidence that he actually lived there.
"You need more than just an address to prove that you have a residence," said Delorey.
"We were left with no other alternative than to assume that his residence is still in Yellowknife. Until he proves to the board differently, we have decided to cut off his living allowance."
Delorey wasn't certain exactly how much Allen was claiming for his accommodation allowance, but it was in the neighbourhood of $2,000 to $2,500 a month.
He said Allen will also see his MLA's Northern living allowance dropped to $2,302 per year from $8,552, and his expense allowance of $9,882 cut down to $6,393.
Allen will have to make up the difference on those two accounts for any money claimed since April 1, Delorey said.
Allen was entitled to the allowances while serving as a cabinet minister up until the end of March, Delorey said, but after he was passed over for a ministerial post following the territorial election in November, he has since lost that entitlement.
Allen's claim is the only one out of the 19 territorial MLAs that has raised eyebrows so far, Delorey said.
As far as Delorey knows, Allen is still living in Yellowknife.
"When he was a minister and living here, I know his wife had a teaching job here, he also had some kids going to school here I think," said Delorey.
But according to the deputy clerk of the assembly, however, no one is really sure if Allen is still living in Yellowknife.
Deputy clerk Doug Schauerte said the lease arrangement at his last known address in Yellowknife expired at the end of June.
Allen insists he is following the rules, but told Delory he didn't intend to appeal the board's decision, the Speaker said.
According to the Inuvik town office, Campbell Lake is a mostly undeveloped location, about 20km southeast of the community and accessible in some areas only by boat.
Allen did not return phone calls to his office at the legislative assembly.
-- with files from Jason Unrau