23 March 2009 External T.I. 2008-0293131E5 F - Prestations reçues par une succession -- summary under Paragraph 6(1)(f)

An individual who had been receiving long-term disability benefits after an illness had prevented continuation of the individual’s employment, brought an action when the insurance company ceased the benefit payments. The action was settled after the individual’s death by payment to the estate of long-term disability benefits that were unpaid during the individual's lifetime, and a survivor's benefit. After noting that the disability payments received by the individual would have been taxable during the individual’s lifetime under s. 6(1)(f) pursuant to what should be characterized in accordance with IT-428 as a "wage loss replacement plan", CRA went on to find that, in accordance with Tsiaprailis, the amount of the settlement that was referable to such unpaid amounts was taxable.