TO Accounting and Collections Division Technical Research and Enquiries Section
FROM Rulings Directorate Financial Industrial Division T.D. Peters 995-0051
ATTENTION W.C. Pembroke A/Chief
RE: Ontario Municipal Employees Retirement System (OMERS)
It is our position, as outlined in our Press Release 85-1 dated January 8, 1985, that where any employee is employed by a self-insured employer, the portion, if any, of the compensation he receives from his employer while injured that is equal to the Workmen's Compensation Board award which would normally be received by the employee in the situation should be included in computing his income pursuant to paragraph 56(1)(v) of the Act and deductible in computing his taxable income pursuant to subparagraph 110(l)(f)(ii) of the Act. The amount of compensation received which is not included in income pursuant to paragraph 56(l)(v) of the Act should be included in computing the employee's income pursuant to subsection 5(1) of the Act.
We understand that XXXX is receiving amounts in respect of disability retirement benefits pursuant to regulation 13. of OMERS. Where no amounts are received by XXXX directly from the Workmen's Compensation Board then the treatment described above should be applied. However, we note that regulation 13(9) of OMERS states that "the amount of pension payable to a member in any month before his normal retirement date, together with any amount of compensation payable to the member with respect to that month under the Workmen's Compensation Act shall not exceed 85 per cent of the monthly rate of contributory earnings of the member on the last day the member received the normal rate of contributory earnings from his employer". This seems to indicate that the amount XXXX is receiving from OMERS is over and above the Workmen's Compensation Board award, therefore it is properly being taxed.
In our view, in order to answer the enquiry of XXXX it is essential to determine the exact nature of the payment, then the appropriate treatment can be ascertained.
Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch