A settlement agreement signed by the taxpayer in settlement of her grievances launched with the assistance of her union stated that she resigned from her position, that the union and the taxpayer withdrew all the grievances, and that the employer agreed to pay her a lump sum and released the claim for a portion of the excess amount of wage loss insurance that she had received. The Directorate stated:
In the absence of further information demonstrating that the amount paid by the employer was intended to compensate the taxpayer for items such as wages that should have been paid to her during her period of employment and/or damages relating to the harassment complaint made during the period prior to her loss of employment, it is our view that the definition of "retiring allowance" in subsection 248(1) covers both the $XXXXXXXXXX received by the taxpayer and the wage loss replacement insurance receipt of $XXXXXXXXXX which must be included in the taxpayer's income pursuant to subparagraph 56(1)(a)(ii).