Questions and Answers
on the Treasury Board of Canada Secretariat
Policy on Leave with Income Averaging

1.	When did this policy take effect and how long will it last?

This policy took effect on February 1, 1999, and, as an employer policy, has no specified end date.

2.	Who is eligible to apply for this type of leave?

This policy applies to all employees represented by all unions, as well as unrepresented and excluded employees.

3.	Do I have to make a formal application for this leave arrangement?

To apply, you need to complete the form called Application for Leave with Income Averaging.

4.	May I take other types of leave without pay during my leave arrangement? 

Yes, but this could significantly affect your take-home pay. If the total period of consecutive leave without pay exceeds three months, you may have to pay both the employer and employee’s shares of contribution to the Public Service pension and group benefit plans. We advise you to consult your compensation specialist for more information.

5.	May I take leave with pay during my leave arrangement?

Yes, provided that it does not occur during the leave portion of your arrangement.

6.	Does the 12-month averaging period have to be a calendar year?

No. It can be any 12-month period agreed to by the employee and manager.

7.	Must the leave be taken all at once or can it be split up?

You can split up your leave, but only into two periods. Each period must be at least five weeks long, and the sum of the two periods must not exceed 12 weeks. Where the leave is split up, the averaged income will take both periods of leave into account.

8.	Why must the leave be from five weeks to three months?

Individual leave arrangements with leave periods of less than five weeks are too costly to administer in comparison to the potential benefits for the employer. The three-month maximum is in line with the maximums stated in many of our collective agreements and other leave without pay arrangements.

9.	If I wish to combine two consecutive leave arrangements, can I take the leave portions back to back?

Yes, but only if the total consecutive leave does not exceed three months. The three-month maximum mentioned in the previous question applies to any consecutive period of leave without pay. In the case of leave with income averaging, it not only applies to periods of leave within the same leave arrangement, but also to back-to-back periods of leave in two consecutive leave arrangements.

10.	Generally speaking, how will this leave arrangement affect my pay?

Your basic pay rate will be reduced to reflect the length of leave and the reduced time at work. We will then average the reduced pay over a 12-month period. Public Service pension and benefits coverage and contributions for this arrangement will stay at pre-arrangement levels. Consult your compensation specialist for details.

11.	Will my pension change?

No. As with other periods of leave without pay of up to three months, you will be credited with full pensionable service.

12.	How will this leave arrangement affect my coverage under group benefit plans such as health care, dental, and long-term disability?

Even though your pay will be reduced, your coverage and your premiums or contributions will remain as they were before your leave arrangement. The employer will continue contributing its normal share.

13.	How will the accumulation of annual leave and sick leave credits be affected?

As with other types of leave without pay, you will accumulate credits for each month in which you earn 10 days’ pay. Even though you will be receiving pay during the LWOP portion of the arrangement, you will not be earning pay.

14.	While participating in this leave arrangement, am I entitled to paid leave such as annual or sick leave?

For your at-work days, you may take paid leave as long as it is in accordance with the collective agreement or compensation plan that applies to you. However, during the leave portion of your arrangement, as with other types of leave without pay, you will not be eligible for paid leave.

15.	May I collect employment insurance during the leave?

No.

16.	What is my status on the days I don’t work?

You will be on leave without pay.

17.	May I combine leave with income averaging and pre-retirement transition leave?

No. Permitting you to take both types of leave simultaneously would be too complex and expensive to administer.