Severance Pay / Rehab Leave Administrative Directive

1.0 Introduction

Purpose: This administrative directive amplifies CBI 204.40, Canadian Forces Severance Pay (CFSP), and QR&O 16.19, Rehabilitation Leave, is, in those cases where it may be granted, an alternative benefit to CFSP. In case of conflict between the details in this directive and either CBI 204.40 or QR&O 16.19, the terms of CBI 204.40 and QR&O 16.19 will prevail.

Issued: 20 Jun 2012

Supersession: This directive supersedes CFAO 204-10

Enquiries:

CFSP policy: Directorate of Pensions and Social Programs (DPSP)
email (DIN): +Social Programs-Programmes sociaux@CMP DPSP@Ottawa-Hull;
email (external): SocialPrograms-Programmessociaux@forces.gc.ca
DGCB (intranet): cmp-cpm.forces.mil.ca/dgcb/engraph/home_e.asp?sidesection=1
DGCB (internet): www.cmp-cpm.forces.gc.ca/dgcb-dgras/wn-qn/index-eng.asp

  1. CFSP/Rehabilitation Leave Administration: Director Military Careers Administration (DMCA) 4
    email (DIN): +DMCA 4 RELEASE@CMP DMCA@Ottawa-Hull
    email (external): dgmc-release-dgcm-liberation@forces.gc.ca
    DGMC intranet: cmp-cpm.forces.mil.ca/dgmc/engraph/Release_e.asp?)Opensub=61
  2. PiL Administration: DMCA 4 PiL Team (on or after 15 Oct 12):
    Email address to be published in a future CANFORGEN.
  3. Application: This directive applies to Regular Force (Reg F) and Primary Reserve (PRes) Force members.

TOC: This directive contains the following topics

Top of Page

2.0 CFSP

2.0 Authority

Entitlement to CFSP is provided under the authority of CBI 204.40.*

* In case of conflict between this directive and CBI 204.40, the policy provisions of the CBI shall prevail.

2.1 Entitlement

A member is entitled to CFSP, on the day before the member ceases to serve in the Reg F or in the PRes, unless the member:

  • is a military judge;
  • is a person attached or seconded as an officer or non-commissioned member to the CF;
  • has served, beginning on 1 Mar 12, in the Supplementary Reserve (Supp Res); Cadet Organizations Administration and Training Service (COATS), or Canadian Rangers (CR) and is not an exceptional member (CBI 204.40);
  • is a member with an approved release item 1, 2 or 5(f) to the table under QR&O 15.01.

2.2 Eligible Service

The calculation of CFSP is based on years* of eligible service which consists of the total number of years of service after a member's most recent date of enrolment and does not include any of the following:

  1. service in the Supp Res, COATS, and CR that was not Class B or Class C Reserve service;
  2. Exemption from Duty and Training (ED&T), other than years of ED&T for Maternity under QR&O 9.09 and ED&T Parental under QR&O 9.10;
  3. PRes Non-effective Strength (NES), as determined by or under the authority of the CDS;
  4. Leave Without Pay (LWOP) under QR&O 16.25;
  5. Limitation of Payments (LOP) under QR&O 203.20;
  6. Absence – Without Leave or as a deserter – for which a forfeiture has been imposed under QR&O 208.30;
  7. a forfeiture imposed under QR&O 208.31.
  8. years in respect of which any severance benefits were paid or granted to a member under: QR&O 16.19 Rehabilitation Leave; QR&O 204.40 Severance Pay; QR&O 204.54 Reserve Force Retirement Gratuity (RFRG); QR&O 204 Financial Benefits and Pay of Military Judges; CBI 204.40 Severance Pay; CBI 204.54 Reserve Force Retirement Gratuity (RFRG); CBI 204.40 CFSP.

* year includes part of a year, rounded up to two decimal places.

2.3 Accumulation of eligible service

The accumulation of eligible service ends effective:

  • 1 Oct 11 - for General Officers, Colonels, & Legal Officers in the rank of Lieutenant-Colonel and above.
  • Date of promotion - for members promoted to the substantive rank of Colonel and to Legal Officer substantive rank Lieutenant-Colonel after 1 Oct 11 and before 1 Mar 12.
  • 1 Mar 12 - for all other CF Officers and NCMs.

The accumulation of years of eligible service continues for a member who is released, in the Table to QR&O article 15.01, under Items:

  • 3(a) - Medical grounds - being disabled and unfit to perform duties as a member of the Service.
  • 3(b) - Medical grounds - being disabled and unfit to perform his duties in his present trade or employment, and not otherwise advantageously employable under existing service policy.
  • 5(b) - Reduction in strength.
  • 5(c) - Completed service for which required: where the member has not reached retirement age under QR&O Chapter 15 but has completed the period of obligatory service because of a change in classification or trade specifications or in the establishment requirements of the CF.
  • 5(d) - Not advantageously employable.
  • 5(e) - Irregular enrolment.
  • By reason of death (refer to QR&O article 15.01(2)).

2.4 Calculation of CFSP

The amount of CFSP is calculated by the formula:

  • (MP* ÷ 30) x 7 x Y
    where "Y" is the lesser of:
    • the number of years of eligible services; and
    • the difference of (30 - YPB**)

*MP is the monthly rate of pay, on the day before the member ceases to serve in the Reg F or Pres, for the member's substantive rank, pay increment, and occupation or trade group.

** YPB means years in respect of which any severance benefits were paid or granted to a member under QR&O 16.19, Rehabilitation Leave; QR&O 204.40, Severance Pay; QR&O 204.54, Reserve Force Retirement Gratuity (RFRG); QR&O 204, Financial Benefits and Pay of Military Judges; CBI 204.40, Severance Pay; CBI 204.54 – Reserve Force Retirement Gratuity (RFRG); and CBI 204.40 – Canadian Forces Severance Pay (CFSP).

2.5 Death

When an officer or non-commissioned member dies while serving in the Reg F or PRes, unless at the time of death the member is on Rehabilitation Leave, CFSP is paid to the member's service estate.

2.6 Maximum Benefit

In accordance with CBI 204.40(9), no person is entitled, during their lifetime to be paid or granted severance benefits and payments in lieu of (PiL) of severance benefits in respect of more than 30 years of service in the CF.

2.7 Tax Implications

A severance benefit that is paid upon release from the CF is considered a retiring allowance under the Income Tax Act. As such, the income tax rules for retiring allowances apply when a severance benefit is paid to the member upon release or transfer from the Reg F or the PRes.*

*The determination of income tax rests with the Canada Revenue Agency (CRA) and/or Ministère du Revenu du Quebec (MRQ) and members should contact CRA or MRQ directly to obtain the best possible advice on tax matters. Refer to sections 3.16 and 3.17 for CRA and MRQ contact information.

2.8 Tax at Source

When a member is paid CFSP on release, income tax is deducted at source from any part directly paid to the recipient. For amounts directly contributed to an RRSP, income tax is not deducted at source in accordance with the Income Tax Act.

2.9 RRSP / RPP

All or part of a severance benefit may be transferred to a registered pension plan (RPP) or an RRSP. The transfer must be made during the year of receipt or within 60 days after the end of the year.

DMPAP RPPO is responsible for RRSP transfers on release of a member. In order to have funds directly transferred to an RRSP, specific forms are required for Reg F and PRes members. These forms are completed during the release process with either their release centre or release unit.

DMPAP RPPO cannot transfer CFSP to a RPP. In order to have CFSP transferred to a RPP without tax implications at source, the CFSP must first be transferred to an RRSP by DMPAP RPPO.

To transfer from an RRSP to RPP, the member must complete CRA Form T2033 – Direct Transfer under subsection 146.3(14.1) or paragraph 146(16)(a) or 146.3(2)(e). For assistance in completing the form, members should consult CRA. For CRA contact information refer to section 3.16.

Top of Page

3.0 Payment in Lieu (PiL) of CFSP

3.0 Authority

Under the authority of CBI 204.40, CFSP, all members are provided a one-time opportunity to elect to receive a Payment in Lieu (PiL) for all or part of CFSP prior to their release.

3.1 PiL Team

In order to process files in a timely manner, the DMCA 4 PiL Team, under the supervision of DMCA, is expected to begin operations by 15 Oct 12.  The main tasks of the DMCA 4 PiL Team involve auditing files and responding to PiL related queries.

3.2 Entitlement

A member is entitled to elect to receive a PiL for all or part of CFSP provided the following conditions are met:

  • the member has not served, from 1 Mar 12 to 13 Mar 13 in the Supp Res, COATS, or CR.
  • the member irrevocably elects to receive a PiL of all or part of CFSP, during the election period.
  • another member witnesses the member's election and attests to the election and the date on which it was made, on the election form in CBI 204.40.
  • the completed election form is received by the member's Base/Unit Orderly Room (OR) no later than 28 Mar 13.
  • during the member's eligible service, the release of the member under Item 1, 2 or 5(f) in the Table to QR&O article 15.01 is not approved before the end of the election period.

3.3 Election Period

Members have 90 days in which to make an election. The election period occurs from 14 Dec 12 to13 Mar 13. *

* CBI 204.40 does not authorize any extension to the election period.

3.4 Calculation

The amount of a PiL of all or part of CFSP is calculated by formula:

  • (MP* ÷ 30) x 7 x Y
    where Y is the lesser of:
    • any number of years of eligible service that were served before:
      • 1 Oct 11 for a senior officer and that are chosen by the senior officer;
      • the date the member became a senior officer if they became a senior officer between 2 Oct 11 and 29 Feb 12 and that are chosen by the senior officer; or
      • 1 Mar 12 in all other cases and that are chosen by the member; and
    • the difference of (30 - YPB**)

* MP is the monthly rate of pay for the member's substantive rank, pay increment, and occupation or trade group that was established:

  • on 1 Oct 11 for a senior officer,
  • for the date on which the member became a senior officer beginning on 2 Oct 11 and ending on 29 Feb 12, and
  • on 1 Mar 12 in any other case.
    Note: Senior officer is defined in CBI 204.40.

** YPB means years in respect of which any severance benefits were paid or granted to a member under QR&O 16.19, Rehabilitation Leave; QR&O 204.40, Severance Pay; QR&O 204.54, Reserve Force Retirement Gratuity (RFRG); QR&O 204, Financial Benefits and Pay of Military Judges; CBI 204.40, Severance Pay; CBI 204.54 – Reserve Force Retirement Gratuity (RFRG); and CBI 204.40 – Canadian Forces Severance Pay (CFSP).

3.5 PiL Process

The PiL administrative process is as follows:

StageDescription
1. Estimate

An estimate package is mailed to eligible members prior to 17 Sep 12 containing:

  • a cover letter informing members of their options and applicable contact information; and
  • an estimate* of their years of eligible service.

* The estimate is based on the information contained in the pay systems for the Reg F (CCPS) and the Res F (RPSR).

2. Pre-Election
  • During the pre-election period, members review their estimates and their options with respect to electing to receive all or part of their CFSP prior to release.
  • Members advise their OR if they have not received an estimate by 17 Sep 12.
  • Members follow the established Standard Operating Procedures (SOPs) for reporting errors or inconsistencies in their estimates.
3. Election
  • Between 14 Dec 12 and 13 Mar 13, members may elect to receive a PiL for all or part of their CFSP by completing the CFSP Election form under CBI 204.40 and submitting it by mail, hand, email, or facsimile to their OR.
  • For members who do not choose to elect to receive a PiL, severance benefits are calculated upon release from the Reg F or PRes.
  • A member's election is witnessed by another member who attests to the election and the date on which it was made.
  • All CFSP Election forms are received by the Base/Unit by 28 Mar 13.
  • Any elections made before 14 Dec 12 or after 13 Mar 13 are considered invalid and will not be processed.
  • If a member intends to contribute $10K or less to an RRSP, the member must complete a Tax Waiver Form (refer to Section 3.12) and include it with their Election form.
  • If a member intends to contribute more than $10K to an RRSP, the member should complete a CRA Form T1213 and MRQ TP–1016–V (Quebec residents). For CRA and MRQ contact information, refer to sections 3.16 and 3.17 of this directive.
4. Initial Verification The member's Base/Unit OR performs the initial verification of the CFSP Election form.
5. PiL Payment
  • Payments are processed on an ongoing basis commencing 1 Apr 2013.
  • The following outlines the general payment process:
    • for:
      • Reg F members with no previous service who elect to receive 50% or less of their severance benefit as a PiL
      • process:
        • Base/Unit OR processes the payment in CCPS.
    • for:
      • Reg F members who:
        • have previous service; or
        • elect more than 50% of their severance benefit as a PiL; and
      • PRes members who elect to receive any amount of their severance benefit as a PiL
      • process:
        • Base/Unit creates TD folder, as established in SOPs, and submits it with the CFSP Election to DMCA 4 PiL Team.
        • DMCA 4 PiL Team* performs final audit.
        • DMCA 4 PiL Team forwards certified documents to:
          • Base/Unit OR for payment processing in CCPS (Reg F); and
          • DMPAP RPPO for payment processing (Res F) **

* When insufficient documentation is provided, the DMCA 4 PiL Team advises the Base/Unit OR and places the file on hold until the necessary documentation is received.

* When errors are observed, the DMCA 4 PiL Team makes necessary corrections and advises the member accordingly.

** In order to meet processing requirements, status reports cannot be provided to members regarding their files.

3.6 PiL Standard Operating Procedures (SOPs)

To ensure efficient and effective management of the PiL process, SOPs detailing procedures for members and for Base/Unit OR staff have been established. These SOPs will be posted on the DMCA 4 PiL Team website no later than 15 Oct 12.

3.7 Maternity or Parental LWOP

Employees who are on maternity or parental leave without pay should consult Service Canada to determine the impact of receiving the PiL while in receipt of maternity or parental benefits.

Residents of Quebec should consult Emploi et solidarité sociale Quebec concerning the impact to Quebec Parental Insurance Plan (QPIP) benefits.

3.8 Overpayments and Garnishments

Should the member have a recoverable debit balance or extended recovery plan, the PiL of CFSP shall be used to recover the debt.

Should there be a court order garnishment, either a commercial debt or arrears on family support, amounts are deducted from any PiL of CFSP to satisfy any court order the department has received.

3.9 Deductions

Employment Insurance (EI), Canada Pension Plan (CPP) / Quebec Pension Plan (QPP) and Quebec Parental Insurance Plan (QPIP) will be deducted from the PiL of CFSP, if the maximum annual contribution limit has not been reached at the time the payment is made.

3.10 Tax Implications

The PiL of CFSP is considered employment income and is subject to income tax. It will be reported as income on the T4 slip (Relevé 1 in Quebec). *

* The determination of income tax rests with CRA and/or MRQ and members should contact CRA and/or MRQ directly to obtain the best possible advice on tax matters. Refer to sections 3.16 and 3.17 for CRA and MRQ contact information.

3.11 Tax Waiver less than $10K

CRA and MRQ have allowed the employer to reduce the required income tax on the full or partial amount paid to affected CF members in respect of the PiL of CFSP. This approval is conditional on the following:

  • The CF member makes deductible Registered Retirement Savings Plan (RRSP) contributions for the year in which the payment is received.
  • The deductible contributions have to be made to either the CF member's RRSP or their spouse's.
  • The contributions have to be based on the CF member's maximum RRSP deduction limit, even if the contributions are made to the spouse's RRSP.
  • The RRSP contribution has to be equal to the part of the payment on which tax is not withheld.

This approval applies to the least of the following three amounts:

  • The PiL of CFSP on which the member does not want any tax to be withheld;
  • The member's RRSP deduction limit for the year the payment is received; and
  • $10,000.

3.12 Tax Waiver Form

For members residing in the province of Quebec:
Payment in Lieu (PiL) of CFSP – Tax Waiver $10,000 or less (Quebec Residents), page 21.

For members residing in provinces other than Quebec:
Payment in Lieu (PiL) of CFSP – Tax Waiver $10,000 or less (Other than Quebec Residents), page 22.

3.13 Tax Waiver Process - less than $10K

The following general tax waiver process is provided for members intending to contribute $10K or less of PiL of CFSP to an RRSP:

StepDescription
1 The member completes a Tax Waiver Form (refer to Section 3.12).
2 The member includes the Tax Waiver Form with the CFSP Election form.
3 At the time of payment, income tax will be withheld on any remaining amount not indicated on the Tax Waiver Form.

3.14 Tax waiver process - more than $10K to RRSP

The following process is provided if the portion of the PiL of CFSP to be contributed to an RRSP is more than $10K and the member's RRSP deduction limit is over $10K:

StepDescription
1

The member completes, for the full amount up to their deduction limit:

  • CRA Form T1213 Request to Reduce Tax Deduction at Source for Years; and
  • For members residing in Quebec, MRQ Form TP–1016–V
2

The member indicates, at the top of both forms, the year in which the payment is expected to be received. In the majority of cases, the year in which payment is expected is 2013. *

* Payment is taxable the year it is received and therefore the RRSP deduction must be declared for the year in which the payment was made. If payment is received in a year other than the year indicated on the T1213 and/or TP-1016-V, the member is required to send an amended T1213 and TP-1016-V to CRA/MRQ.

3

The member sends the completed form directly to the appropriate CRA Tax Services Office (TSO) and MRQ Office. **

** Prior to receiving their estimate of years of eligible service, members can send a T1213 and a TP-1016-V (Quebec residents) and provide an estimate of the payment they expect to receive.

4 CRA/MRQ reviews the form to determine whether the eligibility criterion has been met and issues a Letter of Authority directly to the member. This may take four to six weeks.
5

The Letter of Authority accompanies the CFSP Election form to ensure the appropriate amount of income tax is withheld when the payment is made.***

*** If the Letter of Authority is not received prior to the deadline for making an election, a copy of the T1213 should be attached to the CFSP Election form and payment will be held until the Letter of Authority from CRA is received. CFSP Election forms must still be completed and submitted within the election period

3.15 Contributions to RRSP

With respect to the PiL of CFSP:

  • Deposits into RRSP accounts on behalf of members are not made by DMPAP or the Base/Unit OR.
  • Each member is responsible for depositing contributions directly into an RRSP account regardless of whether they are requesting a reduction of income tax withheld on the PiL of a severance benefit for more than $10K or less than $10K.

3.16 Contact Information - CRA

Additional information concerning CRA Form T1213, the Letter of Authority, and RRSP Deductions, may be obtained by contacting CRA:

3.17 Contact Information – MRQ

Additional information concerning MRQ and Form TP-1016-V may be obtained by contacting or visiting:

3.18 Financial Advice

For all financial, investment and taxation matters concerning PiL of CFSP, members are strongly encouraged to seek advice/assistance from their financial planner or advisor and CRA or MRQ.

SISIP FS provides financial programs, products and services exclusively to serving and former CF members and their immediate families. For more information visit their website: www.sisip.com/

Top of Page 

4.0 Rehabilitation Leave

4.0 Authority

Entitlement to rehabilitation leave is governed by QR&O 16.19.*

* In case of conflict between this directive and QR&O 16.19, the policy provisions of the latter shall prevail.

4.1 Entitlement

In general terms, only those members who were serving in the Reg F on 31 Mar 72 may elect to receive rehabilitation leave in lieu of CFSP.

Members enrolled on or after 1 Apr 72 are not eligible for rehabilitation leave

4.2 Continuous service

Rehabilitation Leave is based on continuous service which is:

  1. the current period of uninterrupted full-time paid service in the Reg F up to and including:
    • the date on which the member commences retirement leave, if released or transferred from the Reg F;
    • the date on which the member will have reached release age, under QR&O 15.17 or QR&O 15.31, if released or transferred from the Reg F for having reached release age and if the member commences retirement leave prior to reaching that age;
    • the termination date of the member's fixed period of service or of an extension, if released or transferred from the Reg F for having completed a fixed period of service and if the member commences retirement leave prior to having completed that period of service or the extension.
  2. the uninterrupted full-time paid service, if any, in another of Her Majesty's Forces that immediately preceded the service specified at subpara (a) above, if prior to 1 Feb 69, the member enrolled in or transferred to the Reg F immediately following termination of that service in another of Her Majesty's Forces.

4.3 Not included in continuous service

For the purposes of Rehabilitation Leave, the following periods are deemed to not be an interruption of continuous service but will not be included in the calculation of continuous service:

  • a release from one of Her Majesty's Forces for the purpose of enrolling in another of Her Majesty's Forces, including the release or transfer from one of the former Services of the CF for the purpose of enrolling in another former Service of the CF;
  • a period of leave without pay (LWOP);
  • a period of limitation of payments (LOP); or
  • a period of suspension from duty.

4.4 Calculation

The calculation for Rehabilitation Leave is:

  • 30 calendar days for each five year period of continuous service;
  • 7 calendar days for each year of continuous service beyond the last five year period*;
  • 1 calendar day for each 60 day period of continuous service beyond the last year*.

* these periods combined cannot exceed a total of 30 days.

4.5 Maximum entitlement

Rehabilitation leave entitlement continues to the date of release or transfer or the date terminal leave commences.

4.6 Rehabilitation Leave on release

A member who, on release, elects to take Rehabilitation Leave must commence their retirement leave so that it ends on their retirement age date.

If the member was one of the former Services and has elected to be governed by the retirement policy of their former Service, the member may apply to commence or to end their retirement leave on their retirement age date or may apply to commence their retirement leave prior to and terminate subsequent to their retirement age date.

4.7 Worksheet

Release clerks complete the Rehabilitation Leave Worksheet at Annex A to this directive and forward it to DMCA 4.

4.8 Election

A member who was serving on 31 Mar 72 and who has served continuously since that date shall, when officially notified of release or transfer, elect to receive Rehabilitation Leave by completing the form at Annex B to this directive.


Top of Page

Annex A: Rehabilitation Leave Worksheet

Instructions

This form, to be reproduced locally on one sheet only and initiated by unit administrative authority, is sent to DMCA 4.

A. Identification

  • Service Number:
  • Rank:     
  • Surname and Initials:
  • Records Support Unit:
  • Release/Transfer Notifications Msg:
  • Release Item:
  • Date of Birth:       
  • Commencement data of continuous service:
  • Termination date for calculation period:   

B. Rehabilitation Leave Entitlement

Continuous Service (QR&O 16.19): (insert the number of years), (insert the number of days)
less LWOP (QR&O 16.25): (insert the number of years), (insert the number of days)
less LOP (QR&O 203.20): (insert the number of years), (insert the number of days)
less Suspension from Duty (QR&O 19.75): (insert the number of years), (insert the number of days)
Total eligible continuous service: (insert the number of years), (insert the number of days)

5 year period at 30 days: (insert the number of years), (insert the number of days)
1 year period at 7 days:(insert the number of years), (insert the number of days)
60 day period at 1 day: (insert the number of years), (insert the number of days)
Total: (insert the number of days)
less Rehabilitation Leave taken previously (insert the number of days)
Entitlement (insert the number of days)

C. Certification

Certified that the above information has been verified from the Pers File.

(The signature of the URS Authority is required here and the date on which the document was signed)

Rehabilitation Leave entitlement certified correct:

(The signature of DCMA 4 is required here and the date on which the document was signed)


Top of Page

Annex B: Election for Rehabilitation Leave Form

Instructions

When the compulsory retirement age letter, notifying of an impending release or transfer:

  • has been received, the release clerk competes Block A and Block B (if applicable) and forwards this form to DMCA 4, within 60 days of receipt of the letter. A copy is maintained on the member's personnel file.
  • has not been received, the release clerk completes Block C and includes this form with the member's release or transfer documents.

This form shall be reproduced locally.

Identification

  • Service Number:
  • Rank:
  • Surnmane and Initials:
  • Military Occupation:
  • Unit:
  • Retirement Age Date:

Block A

Applicable to members who, on approaching the end of their service, have received their compulsory retirement age letter.

1. I, the undersigned, have been notified of my impending release or transfer in ompulsory retirement age letter reference, and I elect to receive (check one box):

[] Rehabilitation Leave [] Canadian Forces Servance Pay (CFSP)

Block B

Applicable to members who were serving on 31 Jan 68 and who elected former Service retirement provisions.

2. I, the undersigned, have been notified of my forthcoming release or transfer and have requested to receive Rehabilitation Leave.

3. I request to take terminal leave to (check one box):

[] terminate on compulsory retirement age date [] commence prior to or on compulsory retirement age date

Enter compulsory retirement age date:

Block C

Applicable to all releases or transfers where a compulsory retirement age letter has not been sent.

4. I, the undersigned whose release or transfer has been authorized, elect to (check one box):

[] Rehabilitation Leave [] Canadian Forces Severance pay (CFSP)

Signature

The applicant's signature is required here:

The date on which the document was signed is required here:


Top of Page

Payment in Lieu of CFSP - Tax Waiver $10,000 or less (Quebec Residents)

Reduction to Tax withholding on the Payment in Lieu of CFSP

The Canada Revenue Agency and the Ministère du Revenu du Québec have allowed the employer to reduce the required income tax on the full or partial amount paid to affected CF members in respect of the liquidation of accrued severance for retirement and resignation. This approval is conditional on the CF member making deductible registered retirement savings plan (RRSP) contributions for the year in which the payment is received. The deductible contributions have to be made to either the CF member's RRSP or their spouse's. The contributions have to be based on the CF member's maximum RRSP deduction limit even if the contributions are made to the spouse's RRSP. The RRSP contribution also has to be equal to the part of the payment on which tax is not withheld pursuant to this approval. This approval is conditional on the CF member deducting the RRSP contributions on the tax return for the year in which payment is received.

This approval applies to the least of the following three amounts:

  • the part of the amount to be paid in respect to the termination of severance on which the CF member does not want any tax to be withheld;
  • the CF member's RRSP deduction limit for the year the payment is received; and
  • $10,000.

Instructions:

Complete the information below, including the portion of the payment on which no income tax should be withheld. The form must be included with the completed election form and provided to the appropriate Base Orderly Room.

If this form does not accompany your election form, tax will be withheld from all of the payment in lieu of a severance benefit.

Portion of Payment in Lieu of a CFSP benefit to not withhold any income tax (maximum $10,000):

  • Service Number:
  • Rank:
  • Surname:
  • Initials:
  • Date:
  • Signature:
  • Date of Birth:

Note:

A CF member's Maximum RRSP deduction limit may be found by consulting one of the following:

  • Most recent Notice of Assessment or most recent Notice of Reassessment
  • My Account for Individuals
  • Quick Access
  • Tax Information Phone Service (TIPS) at 1-800-267-6999. To use TIPS, the CF member's social insurance number, month and year of date of birth, and the total income reported on line 150 of the member's previous tax return will be required.
  • The income tax enquiries line for individuals at 1-800-959-8281.

Top of Page

Payment in Lieu of CFSP - Tax Waiver $10,000 or less (Other than Quebec Residents)

Reduction to Tax withholding on the Payment in Lieu of CFSP

The Canada Revenue Agency has allowed the employer to reduce the required income tax on the full or partial amount paid to affected CF members in respect of the liquidation of accrued severance for retirement and resignation.

This approval is conditional on the CF member making deductible registered retirement savings plan (RRSP) contributions for the year in which the payment is received. The deductible contributions have to be made to either the CF member's RRSP or their spouse's. The contributions have to be based on the CF member's maximum RRSP deduction limit even if the contributions are made to the spouse's RRSP. The RRSP contribution also has to be equal to the part of the payment on which tax is not withheld pursuant to this approval. This approval is conditional on the CF member deducting the RRSP contributions on the tax return for the year in which payment is received.

This approval applies to the least of the following three amounts:

  • the part of the amount to be paid in respect to the termination of severance on which the CF member does not want any tax to be withheld;
  • the CF member's RRSP deduction limit for the year the payment is received; and
  • $10,000.

Instructions:

Complete the information below, including the portion of the payment on which no income tax should be withheld. The form must be included with the completed election form and provided to the appropriate Base Orderly Room.

If this form does not accompany your election form, tax will be withheld from all of the payment in lieu of a severance benefit.

Portion of Payment in Lieu of a CFSP benefit to not withhold any income tax (maximum $10,000):

  • Service Number:
  • Rank:
  • Surname:
  • Initials:
  • Date:
  • Signature:
  • Date of Birth:   

Note:

A CF member's Maximum RRSP deduction limit may be found by consulting one of the following:

  • Most recent Notice of Assessment or most recent Notice of Reassessment
  • My Account for Individuals
  • Quick Access
  • Tax Information Phone Service (TIPS) at 1-800-267-6999. To use TIPS, the CF member's social insurance number, month and year of date of birth, and the total income reported on line 150 of the member's previous tax return will be required.
  • The income tax enquiries line for individuals at 1-800-959-8281.