A member of the Canadian armed forces who had been injured and in receipt of disability benefits from the Department of Veterans Affairs and the Service Income Security Insurance Plan administered by the Maritime Life Assurance Company ("Maritime Life") was found to have received a lump sum corresponding to the present value of the taxpayer's right to receive future benefits under such plans as non-taxable proceeds of disposition of an interest in an insurance policy under s. 39(1)(a)(iii) rather than as a taxable receipt under s. 6(1)(f), in light of Tsiaprailis.
There also were no tax consequences to forgiveness of the individual’s obligation to repay overpayments of disability benefits that he had received.