Following her leave under a deferred salary leave plan, the employee began an unpaid leave of absence in order to take another job. Is she entitled to a s. 8(1)(n) deduction for the repayment of the amount owing, assuming that she does not intend to return to her first job at the end of the unpaid leave of absence. The Directorate responded:
[I]t appears that the employee received, throughout the period of her leave, an amount equal to the amount of deferred pay during the deferred salary period preceding her leave, as well as an amount of salary paid in advance. Therefore …the employee was required to include in her employment income … under subsections 6(3) and 5(1), all amounts [so] received … .
…[I]f the employee reimburses in 2010 the balance owing … in respect of the deferred salary leave plan, she could take the deduction under paragraph 8(1)(n) in computing her income for 2010.
… [S]uch a deduction would be limited to the amount advanced and paid during the period of deferred salary leave, which had already been included in her income.