Question about ELB (earning loss benefits) - offset

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Question about ELB (earning loss benefits) - offset

Post by cosmo12 on Wed 23 Oct 2013, 12:37

Good day guys, quick one for you I just released from the CF and my CM told I will be eligible for ELB, Do my severance pay when I receive it will be offsetting my ELB - Do they calculte it as income. Thanks

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Re: Question about ELB (earning loss benefits) - offset

Post by teentitan on Wed 23 Oct 2013, 13:53

No. Severance is a one off payment so it is not factored into your "yearly" income. ELB is 75% of your annual salary upon release.
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Re: Question about ELB (earning loss benefits) - offset

Post by cosmo12 on Wed 23 Oct 2013, 14:30

so to be sure, my CM will call me this week and my severance pay (I did cash out) will be in my bank account when she calculate my montly ELB it is not consider montly income to be offset. Thanks

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Re: Question about ELB (earning loss benefits) - offset

Post by teentitan on Wed 23 Oct 2013, 14:41

Correct.
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Re: Question about ELB (earning loss benefits) - offset

Post by Guest on Wed 23 Oct 2013, 15:19

Teen, you sure you can deduct for tax purposes those premiums , I called Sunlife, they said no, I called Vac , they said no, I call the cf pension office, they said no

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Re: Question about ELB (earning loss benefits) - offset

Post by teentitan on Wed 23 Oct 2013, 15:34

If you are talking about SISIP monthly premiums you payed while in uniform then upon release the medically released member should get a letter from Manulife with the amount of monthly premiums he/she paid over their military career.

These premiums are tax deductible. It was a small perk written for CF members who were injured and medically released. I don't know if it is still in play but I got it back in 2000 and I put the amount under "other deductions".

As for severance it sounds like cosmo cashed out. So he has to pay taxes on it as income for 2013. VAC will not look at as annual income because it is a one time payment and it's in the regs that ELB is 75% of release salary.

To tax deduct severance you have to give the release section a RRSP number for direct deposit from CF. Once a check is cut for the person being released it's taxed at the source and counted towards your income for the year.
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Re: Question about ELB (earning loss benefits) - offset

Post by Guest on Wed 23 Oct 2013, 16:26

Ok

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Re: Question about ELB (earning loss benefits) - offset

Post by cosmo12 on Wed 23 Oct 2013, 18:25

Well my english is not so good. My question was lets say my ELB is approved and I have been on it for a couple of months and lets say I receive my serance pay (4000.00 gross) from the reserve on the 25 oct. Do I have to declare it as income ?

The policy says

Employment Earnings
8.Employment earnings are income amounts a Veteran earns as salary, wages, commissions, bonuses, tips, gratuities and honoraria in the employment of another person or business. Employment earnings will always include the income reported in box 14 of the Veteran’s T4 slips.

Thanks for helping

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Re: Question about ELB (earning loss benefits) - offset

Post by teentitan on Thu 24 Oct 2013, 11:08

Yes you have to declare your severance on your yearly taxes. The amount paid will be shown on your T4 slip you get this year.

Can VAC reduce your ELB because of your severance the answer is no.

Why can't VAC use my severance to reduce my ELB? Because severance pay is a one-time payment and does not make up your earnings when you were in the military.
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Re: Question about ELB (earning loss benefits) - offset

Post by cosmo12 on Thu 24 Oct 2013, 12:53

Thanks kindly for your help

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WELL WELL - JUST GOT OFF THE PHONE WITH VAC - SEVERANCE PAY IS OFFSETTING ELB

Post by cosmo12 on Fri 25 Oct 2013, 14:49

Well they calculate that as income so when i receive it - lets say it is 7 weeks of severance pay then I will have to declare it that month and this will cut off my ELB -

How can you survive they create one benefit and it is taking off from the other hand.

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Re: Question about ELB (earning loss benefits) - offset

Post by Cardinal on Fri 25 Oct 2013, 15:24

They do the same with Employment Insurance. It's because the severance is based on your total time employed and paid by weeks of employment. Ie ... 1 year equals 1 week of severance paid!

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Re: Question about ELB (earning loss benefits) - offset

Post by cosmo12 on Fri 25 Oct 2013, 16:42

Well I know but that sucks a bit. Thank you all.
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Re: Question about ELB (earning loss benefits) - offset

Post by teentitan on Mon 28 Oct 2013, 13:11

Cosmo I have given you the wrong answer.  Yes your severance is deductible from your ELB.  I asked my "go to" guy in the OVO.
Here is the link to the policy...

http://laws-lois.justice.gc.ca/eng/regulations/SOR-2006-50/page-7.html#docCont

In para 22 (b) it states the deduction.

The OVO is now looking how they are going to factor your severance into a monthly conversion and how they are going to explain it to you.  He is going to need a few days as he can't find the policy so he is likely going to VAC admin, just down the street from the OVO, for the answer.

So again Cosmo sorry for the wrong answer.  My severance was not deducted from my Pension Act payments so I assumed but I only made an ass of myself.
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Re: Question about ELB (earning loss benefits) - offset

Post by cosmo12 on Mon 28 Oct 2013, 18:45

no problem Teetilan,
just to let you know my serance was only for 2 years and 200 day so about 2 weeks and 4 days pay. I would imagine that it will be taking off from my ELB I had worked almost 3 weeks during the month. Keep me posted. Thanks a lot and I follow you guys on new things happening.
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