27 August 1991 External T.I. 9118995 F - Meaning of Salary and Wages

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.

5-911899

Dear Sirs:     24(1)

Re:       19(1)

24(1)

This Plan (a copy of which was enclosed with your letter) provides that participants may receive "no other income... from the  24(l) during the approved leave of absence (paragraph 4 of lntroduction  to Plan.  This provision essentially accords with subparagraph 6801(a)(iii) of the Regulations which requires that the deferral arrangement provide that an employee does not receive "any salary or wages" during the leave period from the employer or any other person with whom the employer does not deal at arm's length. Regulation 6801 permits the employer to pay the usual fringe benefits.

We are unable to determine from the information provided by you (which              24(1)

We enclose copies of Interpretation Bulletins IT-75R2 ("Scholarships, Fellowships, Bursaries, Prizes, and Research Grants") and IT-340R ("Scholarships, Fellowships, Bursaries and Research Grants.   Forgivable Loans, Repayable Awards and Repayable Employment Income") and the Special Releases thereto.  If the amounts received by   19(1)   are not repayable, you may ignore IT-340R and the associated Special Release.

You will note from paragraph 5 through 12 of IT-75R2 that a bursary and amounts received for a student assistantship may be classified as either employment income or other income depending on the circumstances. If the monies  are found to be other income includable under section 56 of the Act, 19(1)      will not be in contravention of Regulation 6801 of the Act.  If, however, all or part of the monies are employment income under section 5 of the Act 24(1) A copy of this letter will be sent to the District Office for their information.

If you are unable to make a determination concerning the nature of the income received by

24(1)

Copies of any documents concerning the application and approval processes for the bursary and the student assistantship, including those relating to  19(1)  personally and those available for general  19(1)  distribution, should be submitted to the District Office for their consideration.  These documents and a written analysis supporting the conclusion that the monies are employment income should also be submitted with respect to any request for administrative relief.

We trust this information is helpful.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate