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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Whether disability payments are included in earned income for purposes of RRSP.
Position: Yes.
Reasons: Payments are included in income by virtue of 6(1)(f).
XXXXXXXXXX
Attention: XXXXXXXXXX 5-981679
Fouad Daaboul
August 19, 1998
Dear Sir:
Re: Technical interpretation on the calculation of earned
income for the purposes of determining RRSP contributions
This is in reply to your letter of June 25, 1998, wherein you requested written confirmation on whether periodic payments received from a disability insurance plan constitute “earned income” for the purpose of determining allowable RRSP contributions.
Amounts paid to an employee on a periodic basis from a disability insurance plan to which an employer has made a contribution, to the extent they are included in the employee's income by virtue of paragraph 6(1)(f) of the Income Tax Act (the "Act"), represent "salary or wages" as that term is defined under subsection 248(1) of the Act. As a consequence thereof, these benefits are to be included in the computation of "earned income" for the purpose of subsection 146(1) of the Act.
Although the foregoing comments are not binding on the Department, we trust they are of assistance to you.
Yours truly
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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