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:
Tax treatment of the $10,000 assistance payments to be made by the Ontario Government, under the Ontario Hepatitis C Assistance Plan (the “Plan”), to individuals who contracted hepatitis C virus (“HCV”) through the blood system in Ontario, or were infected with HCV by a spouse, partner or parent who received blood or blood products in Ontario. This assistance will be provided to individuals infected before January 1, 1986, or from July 1, 1990 to September 28, 1998.
Position TAKEN:
The above payments of $10,000 to be made under the Plan will not be included in the recipients’ income and will not be subject to income tax.
Reasons FOR POSITION TAKEN:
As indicated in paragraph 2 of IT-365R2, amounts received by a taxpayer as special or general damages for personal injury are excluded from income.
XXXXXXXXXX 5-983395
M. Azzi
January 6, 1999
Dear Sir:
Re: Ontario Hepatitis C Assistance Plan
This is in reply to your letter of December 22, 1998, wherein you requested confirmation of the income tax treatment of payments to be made under the Ontario Hepatitis C Assistance Plan (the “Plan”).
We understand that the Plan was established by the Government of Ontario to provide financial assistance to all individuals who contracted hepatitis C virus (“HCV”) through the blood system in Ontario, or were infected with HCV by a spouse, partner or parent who received blood or blood products in Ontario. This assistance will be provided to individuals infected before January 1, 1986, or from July 1, 1990 to September 28, 1998 (you indicate that individuals infected between January 1, 1986 and July 1, 1990 are ineligible for financial assistance under the Plan, as they will be eligible for financial assistance under the federal-provincial assistance plan). The Ontario Ministry of Health will issue a cheque for $10,000 to each eligible individual under the Plan. Eligible individuals will be asked to sign an agreement that acknowledges that they are voluntarily accepting the payment “...for the purpose of making a partial settlement of the claim against Her Majesty [the Queen in Right of Ontario], for injuries, losses and damages...” resulting from having been infected with HCV. The agreement will not be a waiver of an individual’s right to pursue a court action, nor an admission of liability on the part of Her Majesty the Queen in Right of Ontario (“Her Majesty”). However, the agreement will stipulate that, if the individual obtains a judgement or settlement against Her Majesty, the amount to be paid pursuant to any subsequent judgement or settlement by Her Majesty will be reduced by the $10,000.
As indicated in paragraph 2 of IT-365R2, Damages, Settlements and Similar Receipts, amounts received by a taxpayer as special or general damages for personal injury are excluded from income. Accordingly, the above-described payments of $10,000 to be made under the Plan will not be included in the recipients’ income and will not be subject to income tax.
We trust that these comments will be of assistance.
Yours truly,
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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