An injured worker was entitled to receive monthly payments from the Ontario Workplace Safety and Insurance Board ("WSIB") until 65, with a lump sum paid to the worker at 65 as compensation for the loss of the monthly payments – or to the worker’s survivors if he did not attain that age. What is the treatment of such sum paid to the worker’s estate where the worker (the correspondent’s father) did not attain 65? CRA responded:
Such compensation would first be added to the net income of the person who received it under paragraph 56(1)(v). However, in a situation like yours where the recipient is not the employer or former employer of your father, that person would be entitled to an equivalent deduction in computing that person’s taxable income under subparagraph 110(1)(f)(ii). Consequently, that amount should be reflected in the tax return of the person who received it in two places.