CRA confirms that a DSLP leave period can be interrupted for COVID reasons

Two of the conditions for a qualifying deferred salary leave plan are (i) that the deferral period cannot exceed six years with the leave period beginning immediately afterwards and (ii) that the leave period must be one continuous period of at least six consecutive months (or three months for certain educational leaves). CRA recently issued two technical interpretations confirming that, pending a Finance review of the impact of the COVID-19 pandemic on such plans, CRA will permit the leave period to be deferred.

CRA has now issued a further two technical interpretations confirming that it is also permissible, pending the completion of the Finance review, for the leave period to be interrupted for COVID reasons (e.g., because of being called back to work as an essential health care worker or because of the need to get back to Canada before all flights were cancelled, but with a view to the leave period subsequently being resumed when advisable).

Neal Armstrong. Summaries of 29 May 2020 External T.I. 2020-0849841E5 F and 28 May 2020 External T.I. 2020-0849681E5 under Reg. 6801(a)(i).