whats the worst case scenario?

That $700 a month from cppd that you payed back to sisip for five years would become part of your sisip income therefor you will get interest on the total $800 because it is what sisip, has in file as payment, even tho it was recouped.
Hope I got that right.

Very good question Redfisher ~ I hope we can get an answer from either sisip or legal.

How about those on CPPD? They will have to pay back SISIP for every months retro they recieved CPPD.

Now will SISIP deduct the CPPD from the Class action payment before they add the interest topups? This would mean that the money owed would be lowered giving less interest overall.

For instance if a Vet were recieving CPPD for the last 5 years at $800 a month.

SISIP owes the VET $700 a month for the last 5 years. So SISIP takes $700 from the $800 and ends up owing $100 dollars a month for 5 years.

5 years x 12 months x $100 dollars = $6000 owed to the Vet.

Originally the VET would have recieved
5 years x 12 months x $800 = $48 000

This means that SISIP will save $42 000 dollars plus interest from this VET.

So the question of the day is this. Will the VET have to pay lawyers fees on the original $48 000 owed or just the $6000?

If it is the $48 000 then the VET has to pay, 48 000 x 17.83% = $8558
in legal fees. So he actually owes SISIP $2558 after everything is deducted.

SISIP would also pocket the $42 000 from the settlement. The lawyers would definately profit and the VET owes money.

in my example, the two deductions, one from source the other from legal, would come to either $37830, or $34,274 depending on how legal deducts our fee's,

without doing any further calculations, this is 37.8% or 34.3%

my understanding using the above example of $100K,

is we would be taxed first by SISIP withholding 20% of the $100K ($20K),

then the law firm takes their fee's, presently on the whole of $100K ($17830.oo) or on the remaining $80K($14,274.oo),

at years end, the tax (%) owed to the government would be on the $100K minus the withholding amount (20%), minus the legal fee amount, but you would have to add in any pensions, or taxable sources to this as well.

the remaining balance for your tax bracket would be what is owed.

In Ontario, the tax bracket % for $100K is ~40% minus personal amount and deductions.

best case for thoes effected the moast by the clawback???some will have to pay an EXTRA 20% in tax.seems to me the GOC is getting more for steeling than the lawyers will get for providing leagal services.

propat

question for us---
from what my accountent neighbour tells me the qualifying lump sum does have interest applied when it is calculated going back but if this all adds up to us having to pay more taxes this way then CRA will then have to accept us taking the lump sum all at once in 2013

so isnt the worst case that we pay taxes all in 2013 &we dont have to worry about penalties going back?

for instance in manitoba the provincial rate is like17% for amounts over $67 grand and the federal rate is 29% for a total of 46%

so lets say i get $100,000. the greedy lawyers worst case is they take $17,830 leaving me with $82,170. then CRA takes 46% of the $82 grand (they will take less cause some of the $82 grand will be taxed lower when less than certain limits) leaving me with $44,371after paying $37,798 in taxes

yeah i know it isnt fair but at least we can prepare for the worst case which will never be worse than paying all the taxes in 2013?
here are the fed &prov tax rates
http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

remember---
heroes dont attack the vulnerable
heroes dont favour greedy lawyers over their comrades
heroes dont blame others for their weaknesses
heroes know their own limits &stop before they hurt others
heroes dont forget that they serve &represent those who count on them
most of all--- heroes make sure no one is left behind.


PBaumerModerator

Number of posts: 37
Location: Manitoba
Registration date: 2012-07-16