What is included in Gross Income from Employment? (post-Sept/2010)

Summary: There does not appear to be any significant changes to what should be considered in calculating the Gross Income for a claimant under the New SABS. However, we finally have a definition.

We have previously explained what is included in Gross Income from Employment as it relates to the SABS-1996 (see link at bottom of this post).

So what has been the impact of the changes in these New SABS?

In the New SABS, Gross Employment Income has a definition. It is defined as follows:

“gross employment income” means salary, wages and other remuneration from employment, including fees and other remuneration for holding office, and any benefits received under the Employment Insurance Act (Canada), but excludes any retiring allowance within the meaning of the Income Tax Act (Canada) and severance pay that may be received

While ‘other remuneration from employment’ is not defined, in light of arbitration decisions such as Pafco and Howden (FSCO Appeal P00-00028), it is likely that going forward this will continue to include Employer-paid benefits, such as:

1. Medical,
2. Dental,
3. Disability insurance,
4. Life insurance,
5. Pension / Savings Plan, and
6. Uniform / Travel Allowance.

Change from the Old SABS

A significant change from the Old SABS appears to be that now the CPP premiums paid by the employer may also be included as part of Gross Employment Income.

In Howden, the arbitrator accepted that the employer’s payment of CPP premiums could be viewed as part of the overall employment package, however, he excluded them based exclusively on the provision of the Old SABS relating to determination of Net Income (Section 61). There is no equivalent section in the New SABS as the calculations are performed on a Gross Income basis. Consequently, it would seem that employer CPP contributions should be included as part of the Gross Employment Income in post-September 2010 calculations.

This treatment would appear to remove the previous unequal treatment whereby employer contributions under private plans were included as part of gross income while CPP contributions were excluded.

EI premiums may well continue to be excluded, as Gross Employment Income specifically includes benefits received under the Employment Insurance Act but makes no mention of EI premiums.

We would be pleased to discuss the benefits with you in detail. You may contact us directly at info@adsforensics.com.

To review the Gross Income blog relating to pre-Sept/2010, which discussed the components of Gross Income in more detail, see our post What is included in Gross Income from Employment? (pre-Sept/2010).

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