Regarding employees who relinquish, once at the beginning of the year for their health care spending account, part of their salary increase in order to add additional credits, CRA stated:
… IT-529 … states that if an employee forgoes an amount to which the employee is or will become entitled, such as a negotiated salary increase, vacation or bonus, the amount of remuneration forgone is included in income in the year in which the amount is converted to flex credits. On the other hand, when a contract of employment is renegotiated upon the expiry of a former employment contract to incorporate a decrease in the level of salary or wages to be paid to an employee over the term of the new contract and the new contract also provides for additional flex credits, the additional credits will not be required to be included in the employee's income as part of salary and wages. However, if an employment contract is renegotiated during the term of an employment contract to decrease salary and increase the allocation of flex credits, the additional credits so allocated will be included in the employee's income as salary. Also, the benefits acquired by means of the additional credits will be considered to have been provided through employee contributions.