Federal Appeal


Income tax

Lump sum payment from workers’ compensation board constituted income

In 1969, taxpayer was injured while working, which caused continuing pain. Taxpayer made claim to workers’ compensation board in 2011 on basis of new diagnosis of complex regional pain syndrome. Taxpayer received award of $39,123.95, retroactive to 1969, and lump sum of $53,816 in 2012. Taxpayer did not include lump sum amount in his income claiming it was award of damages for pain suffered. Minister of National Revenue determined that taxpayer was to repay Old Age Security Pension in amount of $3,269 that he received in 2012, on basis that his income for 2012 included lump sum payment, making his total income $109,634. Tax Court judge dismissed taxpayer’s appeal and held that lump sum received from board should have been included in taxpayer’s income for purposes of ss. 56(1)(v) and 180.2(1) of Income Tax Act (Can.). Taxpayer appealed. Appeal dismissed. Judge was correct in holding that lump sum payment constituted income. Even if lump payment was made on account of non-economic loss, it would still constitute income within meaning of s. 56(1)(v) of Act. Policies of board did not determine whether non-economic loss compensation payments constituted income for purpose of Act. Section 56(1)(v) of Act was sufficiently broad to encompass non-economic loss payments received by injured workers under provincial workers’ compensation legislation to compensate them for pain and suffering. Lump sum payment received by taxpayer was compensation and was made in respect of compensable injury or disability, within meaning of s. 56(1)(v) of Act.

Butler v. R. (Feb. 26, 2016, F.C.A., Johanne Gauthier J.A., Donald J. Rennie J.A., and Mary J.L. Gleason J.A., A-166-15) Decision at 249 A.C.W.S. (3d) 898 was affirmed. 263 A.C.W.S. (3d) 533.

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