Principal Issues: Will the Recovery Benefits received by a First Nation Individual be exempt from tax under section 87 of the Indian Act?
Position: The Recovery Benefits you receive will be treated in the same way as the total income that entitled you to these benefits
Reasons: The Recovery Benefits are available to workers who earned a minimum total income of $5,000 (before taxes) from one or more of the following sources; employment income, self-employment income and/or provincial or federal benefits related to maternity or paternity leave. This total income includes income exempt under section 87 of the Indian Act. We feel that the taxability of the income that entitled the recipient to the benefits is a strong connecting factor when determining whether the benefits received are sufficiently connected to a reserve for the purposes of section 87 of the Indian Act.