Here is Matt's post:
2010 Gov response to ACVA report
Note $1000 PIA Supplement for life to STACK with other VAC benefits
Why is Earning Loss Benefit taxed? In fact, why are any VAC benefits taxed?
I believe Canada ought to repeal Income Tax Act s. 6(1)(f.1) where they specifically stated ELB is to be taxed.
Though similar to SISIP, ELB is WORKERS' COMPENSATION for soldiers.
SISIP is taxed solely because Canada paid a part of the premium.
ELB does not have any premium.
Therefore it is ARBITRARILY taxed.
I think it is taxed as it is based on SISIP.
But it is based on WCB principles, namely:
1. Employer pays all of the premium.
2. Soldier loses right to sue.
3. Payment is guaranteed & speedy (IKR)
4. Exclusive jurisdiction.
5. No tax, capital loss & capital replacement.
In fact, taxation of ELB is a dangerous precedent.
As ELB is akin to WCB, is WCB tax next on the hit list?