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Canadian Forces Income Support Benefit - Employment Earnings Exemption

Issuing Authority: Director General, Policy
Effective Date: April 1, 2017
Document ID: 1245

Care has been taken to ensure these policies accurately reflect the acts and regulations. Should any inconsistencies be found, the acts and regulations will prevail.

Purpose

This policy provides clarification on applying the employment earnings exemption when calculating the amount of the Canadian Forces Income Support (CFIS) benefit payable.

Policy

General

  1. The “employment earnings exemption” establishes an annual base amount of employment income that a CFIS recipient may receive without reducing his/her CFIS benefit.
  2. The maximum annual employment exemption is set out in section 36 of the Veterans Well-being Regulations. This annual exemption limit is divided by 12 to arrive at the maximum monthly limit.
  3. The maximum employment earnings exemption varies according to the applicable category of recipient set out in Schedule 1 of the Veterans Well-being Act.
  4. The Career Impact Allowance (CIA), the CIA supplement, and the Supplementary Retirement Benefit are considered to be employment income under the Income Tax Act. These amounts as well as earnings from employment, self-employment and/or rental income are to be included in arriving at the gross employment income of the applicant.
  5. The employment earnings exemption shall be applied to the CFIS applicant’s/recipient’s net employment income (gross employment income less any allowable deductions permitted under the Old Age Security Act and the Income Tax Act).

Allowable Deductions

  1. Allowable deductions from gross employment income include:
    1. Employment Expense Deduction as stipulated in the definition of income under section 2 the Old Age Security Act;
    2. Canada/Quebec Pension Plan contributions;
    3. Employment Insurance premiums;
    4. Registered Pension Plan contributions;
    5. Legal expenses incurred to collect salary owing from an employer;
    6. Rent or value for clergyman’s residence;
    7. Teacher’s Exchange Fund contributions;
    8. Meal and Lodging expenses of Railway and/or Transport employees;
    9. Salesmen’s expenses;
    10. Travelling expenses;
    11. Union, professional or like dues; and
    12. Salary and/or disability payment reimbursements.
  2. Allowable deductions from gross self-employment income include any business expenses allowed by the Income Tax Act. These deductions apply to income earned as a result of operating a professional, commission, farming or fishing business.
  3. Allowable deductions from gross rental income include:
    1. Property taxes;
    2. Insurance premiums;
    3. Maintenance and repair expenses;
    4. Electricity; heat and water expenses;
    5. Interest;
    6. Advertising; and
    7. Capital cost allowance.
  4. The application of the exemption to net employment income must not result in total assessable income less than $0.

References

Veterans Well-being Act, sections 37 and 41

Old Age Security Act

Income Tax Act

Veterans Well-being Regulations, section 36

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