Post by IAMCAPER on Jan 20, 2006 9:14:47 GMT -4
SYDNEY - The windfall pensioners received from the $40 million Devco pension surplus before Christmas may come back and bite them at tax time.
Cape Breton Centre NDP MLA Frank Corbett said Wednesday he has written Health Minister Angus MacIsaac and Finance Minister Peter Christie to see if they will intervene to protect the pensioners from hardship when Revenue Canada calculates the pension surplus payments as taxable income.
The potential of their surplus entitlement to put a family’s income into another tax bracket should come as no surprise to pensioners, said pension plan committee member Sam Boutilier.
The pensioners got it in writing when notified of their entitlement under the plan and signed off on it before they received their cheques, Boutilier said.
Corbett said it’s a unique situation and should be treated as such by both levels of government.
“The last thing that should happen now is that these modest pension payments are used as a basis for removing eligibility for the federal Guaranteed Income Supplement or the provincial Pharmacare program.”
Corbett noted in a release there is no fairness in using these pensions as a justification for disqualifying them from programs for which they will soon qualify again.
Under Revenue Canada policy pension income, even one-time only payments, are considered taxable income.
The Cape Breton MLA asked Christie to work with his federal counterpart to remove the pension surplus from income calculations and MacIsaac to wave its inclusion when calculating the Pharmacare eligibility.
Otherwise it will cause undue hardship on these pensioners for one year, Corbett added.
District 26 United Mine Workers administrator Bob Burchell said they broached the issue with Revenue Canada and Human Resources Canada about relief for plan members.
“We told (Revenue Canada) it was a one-time deal but we had no success.”
He explained the surplus money is taxable and is payable on a pensioners income tax.
“We issued a T-4 slip and we took taxes off the cheques,” said Burchell.
For some pensioners it bumped their income by $3,000 to $4,000 last year, he pointed out.
Burchell said he doesn’t know of any past precedent that would support the surplus recipients request for relief.
Cape Breton Centre NDP MLA Frank Corbett said Wednesday he has written Health Minister Angus MacIsaac and Finance Minister Peter Christie to see if they will intervene to protect the pensioners from hardship when Revenue Canada calculates the pension surplus payments as taxable income.
The potential of their surplus entitlement to put a family’s income into another tax bracket should come as no surprise to pensioners, said pension plan committee member Sam Boutilier.
The pensioners got it in writing when notified of their entitlement under the plan and signed off on it before they received their cheques, Boutilier said.
Corbett said it’s a unique situation and should be treated as such by both levels of government.
“The last thing that should happen now is that these modest pension payments are used as a basis for removing eligibility for the federal Guaranteed Income Supplement or the provincial Pharmacare program.”
Corbett noted in a release there is no fairness in using these pensions as a justification for disqualifying them from programs for which they will soon qualify again.
Under Revenue Canada policy pension income, even one-time only payments, are considered taxable income.
The Cape Breton MLA asked Christie to work with his federal counterpart to remove the pension surplus from income calculations and MacIsaac to wave its inclusion when calculating the Pharmacare eligibility.
Otherwise it will cause undue hardship on these pensioners for one year, Corbett added.
District 26 United Mine Workers administrator Bob Burchell said they broached the issue with Revenue Canada and Human Resources Canada about relief for plan members.
“We told (Revenue Canada) it was a one-time deal but we had no success.”
He explained the surplus money is taxable and is payable on a pensioners income tax.
“We issued a T-4 slip and we took taxes off the cheques,” said Burchell.
For some pensioners it bumped their income by $3,000 to $4,000 last year, he pointed out.
Burchell said he doesn’t know of any past precedent that would support the surplus recipients request for relief.