23 October 1989 External T.I. 74185 F - Definition of "Superannuation Benefit" Overrides Definition of "Death Benefit"

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Subject: 19(1)

We are replying to your memorandum of July 27, 1989, and our earlier correspondence.

As stated in our previous correspondence, it is our understanding that in Ontario, a payment under the Worker's Compensation Act (the "Ontario Act") is only payable to the spouse of an injured worker of, among other things, the cause of the injured Worker's death relates to the injury or to a complication resulting from the treatment thereof.  Accordingly, we are unable to give you a definitive opinion which will cover all the spouses in the same category as 19(1).  To the extent that a particular spouse would have been entitled to receive an amount under the Ontario Act had the worker been covered by that Act, (i.e. where the cause of death relates to the injury or to a complication resulting from the treatment thereof), the payment would be included in the spouse's income under paragraph 56(1)(v) of the Income Tax Act (the "Act") and an offsetting deduction would be permitted under subparagraph 110(1)(f)(ii) of the Act.

Assuming that this will not be the case, we reviewed the documentation submitted to determine the nature of the payment to be received by 19(1).  It would appear that the spousal pension that 19(1) would receive would be paid from the 19(1).  As stated in paragraph 6 of IT-301, a payment out of a superannuation or pension fund is not considered a death benefit.  Since the definition of superannuation or pension in subsection 248(1) of the Act refers to any amount received out of or under a superannuation or pension fund or plan, it is our view that the definition of superannuation benefit overrides the definition of a death benefit.

Accordingly, if the spousal pension is not received in the circumstances described above (i.e. where the cause of death relates to the injury or to a complication resulting from the treatment thereof) or if the pension is in excess of the amount that would have been required by the Ontario Act, it is our view that that excess would be included in 19(1) income under subparagraph 56(1)(a)(i) of the Act as a superannuation or pension benefit.

We are returning the file of 19(1) including the 1985, 1986, 1987 returns and permanent documents.

We trust this information will assist you in replying to 19(1).

Yours truly,

for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch