F. Francis (613) 957-3498
October 15, 1987
Dear Sirs:
This is in reply to your letter of September 10, 1987, wherein you requested a technical interpretation with respect to the definition of "earned income" for the purpose of paragraph 146(1)(c) of the Income Tax Act (the "Act").
We concur with your position that disability benefits paid from a disability insurance plan will be taxable in the hands of an employee, pursuant to paragraph 6(1)(f) of the Act, if the employer has made a contribution to the plan.
It is our view that employment insurance benefits, to the extent they are included in income from office or employment by virtue of paragraph 6(1)(f) of the Act, represent "salary or wages" as that term is defined under subsection 248(1) of the Act. As a consequence thereof, these benefits will be included in the computation of "earned income" for the purpose of paragraph 146(1)(c) of the Act.
The above comments are an expression of opinion only and are not binding on the Department. They are, however, our best interpretation of the relevant legislation as it applies generally and we trust that they are of assistance to you.
Yours truly, for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch