Re: DEC “ off set “ by pension question

by derngt Mon 08 Feb 2021, 11:35

Unknown Soldier wrote:
derngt wrote:
Unknown Soldier wrote:
derngt wrote:
Unknown Soldier wrote:
bigrex wrote:Here are all the different sources of "income" that will be deducted from the IRB.

"The following sources are prescribed for the purpose of the determination of B in subsection 19(1) of the Act:

(a) benefits payable under the Canadian Forces Superannuation Act, the Public Service Superannuation Act or the Employment Insurance Act;

(b) benefits payable under the Canada Pension Plan or the Act respecting the Québec Pension Plan, CQLR, c. R-9;

(c) benefits payable under any employer-sponsored long-term disability insurance plan;

(d) compensation payable in respect of economic loss under the Government Employees Compensation Act or any provincial workers’ compensation legislation;

(e) amounts payable in respect of economic loss arising from a legal liability to pay damages;

(f) benefits payable under an employer-sponsored pension plan;

(g) employment income in excess of $20,000 earned in a calendar year;

(h) benefits payable under Part I of the Royal Canadian Mounted Police Superannuation Act; and

(i) benefits payable under the Old Age Security Act."

You are interested in line F, that talks about pensions from other careers. So it depends on whether the other Employer paid into the pension plan on your behalf, or if you made 100% of the payments. If the Employer did not contribute to the plan, then it cannot be deducted from the IRB.
l don’t have all the details, but suppose the employer was paying into it, that would just mean that the amount would in fact be weighed against DEC, but still doesn’t explain what that would look like if the “offset” constituted $100000-15000, in one lump.

His 150K would only be used as an offset for the year when the cash out happened. There may be an overpayment minus the 20k allowable. The following year his IRB would be back to normal....
just to play devil’s advocate, are you speaking from experience,because if a veteran owes the government money , they always want their money back right away or they charge you interest . I cannot see the GOC/VAC have a veteran disabled or not, seem to some how come out ahead in life. I.e. if the veteran was to receive $150,000 in the form of a one time pension, in let’s say Nov., your telling me VAC is only going to “ 0” their DEC entitlement for the month of December,then it’s business as usual in Jan., the new taxation year?

That is something you will have to ask VAC. Send them a message on MYVAC.
oh, sorry, l thought you were originally answering the question because you knew the answer, so you were just guessing?

It was an educated guess based on the legislation. The only 100% correct answer will come from VAC....

by Unknown Soldier Mon 08 Feb 2021, 11:26

derngt wrote:
Unknown Soldier wrote:
derngt wrote:
Unknown Soldier wrote:
bigrex wrote:Here are all the different sources of "income" that will be deducted from the IRB.

"The following sources are prescribed for the purpose of the determination of B in subsection 19(1) of the Act:

(a) benefits payable under the Canadian Forces Superannuation Act, the Public Service Superannuation Act or the Employment Insurance Act;

(b) benefits payable under the Canada Pension Plan or the Act respecting the Québec Pension Plan, CQLR, c. R-9;

(c) benefits payable under any employer-sponsored long-term disability insurance plan;

(d) compensation payable in respect of economic loss under the Government Employees Compensation Act or any provincial workers’ compensation legislation;

(e) amounts payable in respect of economic loss arising from a legal liability to pay damages;

(f) benefits payable under an employer-sponsored pension plan;

(g) employment income in excess of $20,000 earned in a calendar year;

(h) benefits payable under Part I of the Royal Canadian Mounted Police Superannuation Act; and

(i) benefits payable under the Old Age Security Act."

You are interested in line F, that talks about pensions from other careers. So it depends on whether the other Employer paid into the pension plan on your behalf, or if you made 100% of the payments. If the Employer did not contribute to the plan, then it cannot be deducted from the IRB.
l don’t have all the details, but suppose the employer was paying into it, that would just mean that the amount would in fact be weighed against DEC, but still doesn’t explain what that would look like if the “offset” constituted $100000-15000, in one lump.

His 150K would only be used as an offset for the year when the cash out happened. There may be an overpayment minus the 20k allowable. The following year his IRB would be back to normal....
just to play devil’s advocate, are you speaking from experience,because if a veteran owes the government money , they always want their money back right away or they charge you interest . I cannot see the GOC/VAC have a veteran disabled or not, seem to some how come out ahead in life. I.e. if the veteran was to receive $150,000 in the form of a one time pension, in let’s say Nov., your telling me VAC is only going to “ 0” their DEC entitlement for the month of December,then it’s business as usual in Jan., the new taxation year?

That is something you will have to ask VAC. Send them a message on MYVAC.

oh, sorry, l thought you were originally answering the question because you knew the answer, so you were just guessing?

by derngt Mon 08 Feb 2021, 04:27

Unknown Soldier wrote:
derngt wrote:
Unknown Soldier wrote:
bigrex wrote:Here are all the different sources of "income" that will be deducted from the IRB.

"The following sources are prescribed for the purpose of the determination of B in subsection 19(1) of the Act:

(a) benefits payable under the Canadian Forces Superannuation Act, the Public Service Superannuation Act or the Employment Insurance Act;

(b) benefits payable under the Canada Pension Plan or the Act respecting the Québec Pension Plan, CQLR, c. R-9;

(c) benefits payable under any employer-sponsored long-term disability insurance plan;

(d) compensation payable in respect of economic loss under the Government Employees Compensation Act or any provincial workers’ compensation legislation;

(e) amounts payable in respect of economic loss arising from a legal liability to pay damages;

(f) benefits payable under an employer-sponsored pension plan;

(g) employment income in excess of $20,000 earned in a calendar year;

(h) benefits payable under Part I of the Royal Canadian Mounted Police Superannuation Act; and

(i) benefits payable under the Old Age Security Act."

You are interested in line F, that talks about pensions from other careers. So it depends on whether the other Employer paid into the pension plan on your behalf, or if you made 100% of the payments. If the Employer did not contribute to the plan, then it cannot be deducted from the IRB.
l don’t have all the details, but suppose the employer was paying into it, that would just mean that the amount would in fact be weighed against DEC, but still doesn’t explain what that would look like if the “offset” constituted $100000-15000, in one lump.

His 150K would only be used as an offset for the year when the cash out happened. There may be an overpayment minus the 20k allowable. The following year his IRB would be back to normal....
just to play devil’s advocate, are you speaking from experience,because if a veteran owes the government money , they always want their money back right away or they charge you interest . I cannot see the GOC/VAC have a veteran disabled or not, seem to some how come out ahead in life. I.e. if the veteran was to receive $150,000 in the form of a one time pension, in let’s say Nov., your telling me VAC is only going to “ 0” their DEC entitlement for the month of December,then it’s business as usual in Jan., the new taxation year?

That is something you will have to ask VAC. Send them a message on MYVAC.

by Unknown Soldier Sun 07 Feb 2021, 20:52

derngt wrote:
Unknown Soldier wrote:
bigrex wrote:Here are all the different sources of "income" that will be deducted from the IRB.

"The following sources are prescribed for the purpose of the determination of B in subsection 19(1) of the Act:

(a) benefits payable under the Canadian Forces Superannuation Act, the Public Service Superannuation Act or the Employment Insurance Act;

(b) benefits payable under the Canada Pension Plan or the Act respecting the Québec Pension Plan, CQLR, c. R-9;

(c) benefits payable under any employer-sponsored long-term disability insurance plan;

(d) compensation payable in respect of economic loss under the Government Employees Compensation Act or any provincial workers’ compensation legislation;

(e) amounts payable in respect of economic loss arising from a legal liability to pay damages;

(f) benefits payable under an employer-sponsored pension plan;

(g) employment income in excess of $20,000 earned in a calendar year;

(h) benefits payable under Part I of the Royal Canadian Mounted Police Superannuation Act; and

(i) benefits payable under the Old Age Security Act."

You are interested in line F, that talks about pensions from other careers. So it depends on whether the other Employer paid into the pension plan on your behalf, or if you made 100% of the payments. If the Employer did not contribute to the plan, then it cannot be deducted from the IRB.
l don’t have all the details, but suppose the employer was paying into it, that would just mean that the amount would in fact be weighed against DEC, but still doesn’t explain what that would look like if the “offset” constituted $100000-15000, in one lump.

His 150K would only be used as an offset for the year when the cash out happened. There may be an overpayment minus the 20k allowable. The following year his IRB would be back to normal....

just to play devil’s advocate, are you speaking from experience,because if a veteran owes the government money , they always want their money back right away or they charge you interest . I cannot see the GOC/VAC have a veteran disabled or not, seem to some how come out ahead in life. I.e. if the veteran was to receive $150,000 in the form of a one time pension, in let’s say Nov., your telling me VAC is only going to “ 0” their DEC entitlement for the month of December,then it’s business as usual in Jan., the new taxation year?

by derngt Sun 07 Feb 2021, 20:01

Unknown Soldier wrote:
bigrex wrote:Here are all the different sources of "income" that will be deducted from the IRB.

"The following sources are prescribed for the purpose of the determination of B in subsection 19(1) of the Act:

(a) benefits payable under the Canadian Forces Superannuation Act, the Public Service Superannuation Act or the Employment Insurance Act;

(b) benefits payable under the Canada Pension Plan or the Act respecting the Québec Pension Plan, CQLR, c. R-9;

(c) benefits payable under any employer-sponsored long-term disability insurance plan;

(d) compensation payable in respect of economic loss under the Government Employees Compensation Act or any provincial workers’ compensation legislation;

(e) amounts payable in respect of economic loss arising from a legal liability to pay damages;

(f) benefits payable under an employer-sponsored pension plan;

(g) employment income in excess of $20,000 earned in a calendar year;

(h) benefits payable under Part I of the Royal Canadian Mounted Police Superannuation Act; and

(i) benefits payable under the Old Age Security Act."

You are interested in line F, that talks about pensions from other careers. So it depends on whether the other Employer paid into the pension plan on your behalf, or if you made 100% of the payments. If the Employer did not contribute to the plan, then it cannot be deducted from the IRB.
l don’t have all the details, but suppose the employer was paying into it, that would just mean that the amount would in fact be weighed against DEC, but still doesn’t explain what that would look like if the “offset” constituted $100000-15000, in one lump.

His 150K would only be used as an offset for the year when the cash out happened. There may be an overpayment minus the 20k allowable. The following year his IRB would be back to normal....

by Unknown Soldier Sun 07 Feb 2021, 18:50

bigrex wrote:Here are all the different sources of "income" that will be deducted from the IRB.

"The following sources are prescribed for the purpose of the determination of B in subsection 19(1) of the Act:

(a) benefits payable under the Canadian Forces Superannuation Act, the Public Service Superannuation Act or the Employment Insurance Act;

(b) benefits payable under the Canada Pension Plan or the Act respecting the Québec Pension Plan, CQLR, c. R-9;

(c) benefits payable under any employer-sponsored long-term disability insurance plan;

(d) compensation payable in respect of economic loss under the Government Employees Compensation Act or any provincial workers’ compensation legislation;

(e) amounts payable in respect of economic loss arising from a legal liability to pay damages;

(f) benefits payable under an employer-sponsored pension plan;

(g) employment income in excess of $20,000 earned in a calendar year;

(h) benefits payable under Part I of the Royal Canadian Mounted Police Superannuation Act; and

(i) benefits payable under the Old Age Security Act."

You are interested in line F, that talks about pensions from other careers. So it depends on whether the other Employer paid into the pension plan on your behalf, or if you made 100% of the payments. If the Employer did not contribute to the plan, then it cannot be deducted from the IRB.

l don’t have all the details, but suppose the employer was paying into it, that would just mean that the amount would in fact be weighed against DEC, but still doesn’t explain what that would look like if the “offset” constituted $100000-15000, in one lump.

by Unknown Soldier Sun 07 Feb 2021, 18:45

Teentitan wrote:
Unknown Soldier wrote:
Teentitan wrote:Unknown if a veteran makes $150000 in a year that means the veteran is no longer considered to be in a Diminished Earning Capacity category.

As he is no longer going to be DEC he is reduced to ZERO if his new job continues to pay $150,000 a year. Oh and most likely he will owe VAC money as his income of $150,000 at some point in the year will pass all "regulations/calculations" for deduction (offset) of DEC.

Unless the veteran you are referring to has won a lottery. If a veteran wins a lottery it is not considered income because lottery winnings are tax free and veterans do not need to inform VAC of their winnings.

it’s not $150000 a year, it was a one shot deal of $150000, it was a pension not a yearly income. the veteran could have been out of that civilian job anywhere from1 -25 years already before they ended up on DEC status.

Thanks for the clarification Unknown.

This looks like a situation where you cannot get all the information from VAC tables or their website.

So IMO the veteran should consult a Chartered Accountant who can then contact VAC policy department (on his behalf) to get the rules/administrative info from the department head at VAC, not the person who answers the phone but the department head.

That way all info right or wrong falls on the department head not the poor bastard who picks the phone up or the veteran. Chartered Accountants are always mindful of covering all the bases as their license to be a CA is their career. So they will make sure the client understands any plans the CA presents the veteran.

Definitely a very unique situation. Hope you will continue to follow this Unknown it might have more help for veterans then we think.

yes, l tried to go back to the original post but it’s gone, but by the end of the thread it had become quite convoluted, l just wondered if anyone here ever went through it and l was going to tell them what l found out. I think l remember reading that they had already raised the question to VAC but they didn’t get back to them yet.

by Nishka Sun 07 Feb 2021, 17:32

https://www.veterans.gc.ca/pdf/about-vac/legislation-policies/policies/doc2829-income-replacement-benefit-01042019-01-eng.pdf

by **bigrex** Sun 07 Feb 2021, 16:56

Here are all the different sources of "income" that will be deducted from the IRB.

"The following sources are prescribed for the purpose of the determination of B in subsection 19(1) of the Act:

(a) benefits payable under the Canadian Forces Superannuation Act, the Public Service Superannuation Act or the Employment Insurance Act;

(b) benefits payable under the Canada Pension Plan or the Act respecting the Québec Pension Plan, CQLR, c. R-9;

(c) benefits payable under any employer-sponsored long-term disability insurance plan;

(d) compensation payable in respect of economic loss under the Government Employees Compensation Act or any provincial workers’ compensation legislation;

(e) amounts payable in respect of economic loss arising from a legal liability to pay damages;

(f) benefits payable under an employer-sponsored pension plan;

(g) employment income in excess of $20,000 earned in a calendar year;

(h) benefits payable under Part I of the Royal Canadian Mounted Police Superannuation Act; and

(i) benefits payable under the Old Age Security Act."

You are interested in line F, that talks about pensions from other careers. So it depends on whether the other Employer paid into the pension plan on your behalf, or if you made 100% of the payments. If the Employer did not contribute to the plan, then it cannot be deducted from the IRB.

by **Teentitan** Sun 07 Feb 2021, 16:36

Unknown Soldier wrote:
Teentitan wrote:Unknown if a veteran makes $150000 in a year that means the veteran is no longer considered to be in a Diminished Earning Capacity category.

As he is no longer going to be DEC he is reduced to ZERO if his new job continues to pay $150,000 a year. Oh and most likely he will owe VAC money as his income of $150,000 at some point in the year will pass all "regulations/calculations" for deduction (offset) of DEC.

Unless the veteran you are referring to has won a lottery. If a veteran wins a lottery it is not considered income because lottery winnings are tax free and veterans do not need to inform VAC of their winnings.

it’s not $150000 a year, it was a one shot deal of $150000, it was a pension not a yearly income. the veteran could have been out of that civilian job anywhere from1 -25 years already before they ended up on DEC status.

Thanks for the clarification Unknown.

This looks like a situation where you cannot get all the information from VAC tables or their website.

So IMO the veteran should consult a Chartered Accountant who can then contact VAC policy department (on his behalf) to get the rules/administrative info from the department head at VAC, not the person who answers the phone but the department head.

That way all info right or wrong falls on the department head not the poor bastard who picks the phone up or the veteran. Chartered Accountants are always mindful of covering all the bases as their license to be a CA is their career. So they will make sure the client understands any plans the CA presents the veteran.

Definitely a very unique situation. Hope you will continue to follow this Unknown it might have more help for veterans then we think.

by Unknown Soldier Sun 07 Feb 2021, 15:50

Teentitan wrote:Unknown if a veteran makes $150000 in a year that means the veteran is no longer considered to be in a Diminished Earning Capacity category.

As he is no longer going to be DEC he is reduced to ZERO if his new job continues to pay $150,000 a year. Oh and most likely he will owe VAC money as his income of $150,000 at some point in the year will pass all "regulations/calculations" for deduction (offset) of DEC.

Unless the veteran you are referring to has won a lottery. If a veteran wins a lottery it is not considered income because lottery winnings are tax free and veterans do not need to inform VAC of their winnings.

it’s not $150000 a year, it was a one shot deal of $150000, it was a pension not a yearly income. the veteran could have been out of that civilian job anywhere from1 -25 years already before they ended up on DEC status.

by Unknown Soldier Sun 07 Feb 2021, 15:47

derngt wrote:
Unknown Soldier wrote:Here is an interesting question l saw posted somewhere else but no one seemed to have the answer:
The veteran had a Diminished Earning Capability status and was getting a rate of Income Replacement Benefit til age 65 before it would be reduced.
However prior to ending up with a DEC they once held civilian employment long enough to now be entitled to a pension.
The veteran said they were aware that if they took a monthly pension from that civi job, the amount of new taxable income coming in, would be “ off set” or reduce their DEC entitlement by the same amount. So they never end up with more money than whatever the monthly DEC amount is.
But the veteran said they also have the option to take the pension all at once in a one time lump sum payment that could be anywhere from $100000-200000.
The vet was wondering how VAC would “ off set “ DEC by an amount that great when it might equal 2-3 years of monthly DEC payments.
Anyone ever heard of anything like that before ?.

I think we may be missing some critical information. Most civilian companies that offer pensions have to follow legislation. Meaning when you quit your job they may not have access to all their retirement fund. These funds have to be placed in a LIRI/RRIF. My wife retired from a hospital early and her payout was $140,000. $100,000 of that was locked in, the remainder was paid in cash or we could have topped up her RRSP. VAC does not consider RRSP as income. Not sure how VAC looks at LIRI/RRIF. If he can lock away in a LIRI/RRIF and they do consider that income he can slowly withdraw it so the amount will remain under 20k and not be offset by his IRB...

all the information wasn’t there but from what l read it seemed the veteran was on DEC, and wanted to take every penny out of a civilian pension ( over $100000), that had just come into maturity, and what VAC would do to their Monthly DEC if they did?

by derngt Sun 07 Feb 2021, 15:39

Unknown Soldier wrote:Here is an interesting question l saw posted somewhere else but no one seemed to have the answer:
The veteran had a Diminished Earning Capability status and was getting a rate of Income Replacement Benefit til age 65 before it would be reduced.
However prior to ending up with a DEC they once held civilian employment long enough to now be entitled to a pension.
The veteran said they were aware that if they took a monthly pension from that civi job, the amount of new taxable income coming in, would be “ off set” or reduce their DEC entitlement by the same amount. So they never end up with more money than whatever the monthly DEC amount is.
But the veteran said they also have the option to take the pension all at once in a one time lump sum payment that could be anywhere from $100000-200000.
The vet was wondering how VAC would “ off set “ DEC by an amount that great when it might equal 2-3 years of monthly DEC payments.
Anyone ever heard of anything like that before ?.

I think we may be missing some critical information. Most civilian companies that offer pensions have to follow legislation. Meaning when you quit your job they may not have access to all their retirement fund. These funds have to be placed in a LIRI/RRIF. My wife retired from a hospital early and her payout was $140,000. $100,000 of that was locked in, the remainder was paid in cash or we could have topped up her RRSP. VAC does not consider RRSP as income. Not sure how VAC looks at LIRI/RRIF. If he can lock away in a LIRI/RRIF and they do consider that income he can slowly withdraw it so the amount will remain under 20k and not be offset by his IRB...

by **Teentitan** Sun 07 Feb 2021, 13:56

Unknown if a veteran makes $150000 in a year that means the veteran is no longer considered to be in a Diminished Earning Capacity category.

As he is no longer going to be DEC he is reduced to ZERO if his new job continues to pay $150,000 a year. Oh and most likely he will owe VAC money as his income of $150,000 at some point in the year will pass all "regulations/calculations" for deduction (offset) of DEC.

Unless the veteran you are referring to has won a lottery. If a veteran wins a lottery it is not considered income because lottery winnings are tax free and veterans do not need to inform VAC of their winnings.

by **Kramer** Sun 07 Feb 2021, 12:03

Riddick[/quote]
yes, l read about that, like a veteran could have some kind of home business and earn up to $20000 before they would have to claim it against their DEC, but what if that veteran brought home $80,000 how is that “ off set” ?[/quote]

I can only guess, as I have not crossed that bridge (perhaps someone who has can enlighten us?). However, I am guessing it will be like income/tax....the individuals annual income is calculated only after the persons basic personal exemption is applied. Using this same principle, I am guessing if a person earned 80,000.00 prior to DEC then the 20,000.00 threshold would be subtracted and any offsets would be applied to $60,000.00??? Unless......it is not declared?? JMO

Riddick

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