DATE: April 13, 2006
TO: Compensation Managers
SUBJECT: Injury on Duty Leave Amendment of T4 and Relevé 1
The purpose of this bulletin is to advise departments of the
process to obtain an amended T4 or Relevé 1 for employees on leave
with pay for injury in the workplace. This process does not apply
to employees who receive benefits directly from provincial Workers'
Compensation Board(s) (WCB) while on leave without pay for injury in
the workplace.
Since January 2003, departmental Corporate Compensation Managers
are responsible for authorizing Public Works and Government Services Canada
(PWGSC) to produce an employee's amended T4 and Relevé 1 as a result of leave
with pay for injury in the workplace.
The following information will
assist Corporate Compensation Managers in dealing with the provincial WCB and PWGSC.
Background
Under some
provincial WCB legislation, an employee on leave with pay, as a result of
an injury on duty, is entitled to receive a tax credit equal to the amount
the employee would have received had the provincial WCB paid the claimant
directly.
Each
provincial WCB is responsible for the issuance of a T5007 or a Relevé 5 (from
the "Commission de la santé et sécurité au travail" (CSST)) to the employee
for income tax purposes. The provincial WCB and the CSST also provide to the employer the value of the benefit (deemed
value of lost wages) paid during the year for reporting purposes on the
employee's T4 and Relevé 1.
PWGSC will report the amount in box 77
of the T4. For the Relevé 1, PWGSC
will deduct the amount from box A, for the year in which the benefits are
applicable. PWGSC will also print the following note in the centre of the
Relevé 1 "Indemnity reimbursed by the CSST, not included in box A" followed
by the amount reimbursed.
Federal tax regulations require the employer to report income in the
year it was paid. In the case of an employee on leave with pay because
of an injury on duty, the award (deemed value of lost wages) is to be treated
for income tax purposes as if the payment was made in the year approved by
the provincial WCB.
In the case of the CSST awards (deemed value
of lost wages), the Revenue
Québec regulation requires the employer to report the amount of the award as
if the payment was made in the year in which the benefits are applicable,
regardless of when the CSST decision is rendered.
Each year the employer receives
provincial WCB data files. These files contain information on:
-
Employees on leave with pay
who received benefits (deemed value of lost wages) during the previous
calendar year, and
- Employees whose claims were filed in
a previous year and decisions were only rendered by WCB in the current
tax-filing year.
The amount
reported for the latter case will include the deemed value of lost wages up
to the date of the decision in the current tax-filing year and any other amount paid during the
current tax-filing year. For
example, the provincial WCB may render a decision in 2004 on a claim for an
accident that occurred sometime prior to 2004. The value of the award
covering the total period of absence will be reported on the 2004 T4.
The data file
for employees covered by the CSST contains information on employees on leave with pay who received benefits (deemed
value of lost wages) during the previous calendar years and reflects the
calendar year in which the benefits are applicable.
Initial Process
The provinces listed below allow for the
crediting of the amount (deemed value of lost wages) received for injury on
duty. At the beginning of each calendar year, TBS obtains data files for the
following provincial WCB:
Nova Scotia, Quebec, Ontario,
Manitoba, Saskatchewan, Alberta and British Columbia.
On receipt of
the data files, TBS reviews the formatting and forwards the data files to
PWGSC for processing. The records on the data file are matched with the PWGSC
pay master file to identify in which pay office and pay list the employee
belongs.
When the
process is completed, a report is produced for all the matched records and
contains the employee's Personal Record Identifier, Pay Office, Paylist and
the amount to be reported in box 77 of the T4 and where applicable, the
amount to be deducted from box A of the Relevé 1 for each year the benefits
are applicable. These reports are then sent to the appropriate pay offices
for input prior to the production of the T4 and Relevé 1. If PWGSC receives
the data files after the annual production of the T4 and Relevé 1, the same
process described above takes place except that PWGSC pay offices are
instructed to produce amended T4's and Relevé 1's.
Requesting Amended
T4 and Relevé 1
There are two situations where a department will have to investigate and take action. The first situation is where the amount of the provincial WCB benefits reported on the original or
amended T4 and Relevé 1 is
different from the amount of
benefits the
employee claims should have been reported. The second situationis where no amount was submitted to PWGSC for processing. For both situations, the Corporate Compensation
Manager should contact the appropriate provincial WCB to obtain the correct
amount to report on the T4 and Relevé
1.
Attached
you will find a list of provincial WCB contacts who should be able to answer
your enquiries.
It is preferable to forward your enquiries through e-mail. The phone
numbers of the provincial WCB / CSST contacts are provided so that you can
follow-up on your enquiries.
Due to privacy concerns, you should not include the Social Insurance
Number in your e-mail request. You
should always use the provincial WCB / CSST claim number. This number appears
on the T5007 or Relevé 5 issued by the provincial WCB / CSST. If you do not have a copy of the employee's T5007
or Relevé 5, you should obtain one from the employee. You should not use the amount reported on
the employee's T5007 or Relevé 5 because it may be different from the amount
reported by the provincial WCB /
CSST as lost wages while on leave with pay. The amount reported on the
T5007 or Relevé 5 may include benefits paid directly from the provincial WCB
or CSST to the employee.
The basic information in your e-mail should contain the name of the
employee, the claim number, the year of the claim and the amount, if available.
You should also provide your phone number in case the provincial WCB / CSST
requires additional information. The provincial WCB / CSST will provide you
with the amount of the deemed value of lost wages while on leave with pay and the
calendar year in which the amount was approved (deemed to have been paid).
As previously stated, the CSST will provide you with the amount(s) and
calendar year(s) the benefits apply to and the calendar year(s) the benefits
were deemed to have been paid.
Once you have obtained the confirmation in writing from the provincial
WCB or CSST, you should prepare a letter authorizing the pay office to amend
the T4 and/or Relevé 1. In order to assist you, you will find attached sample
letters that cover situations where the full amount was credited in the calendar
year and situations where the amount or partial amount was credited in the
following calendar year.
Departmental compensation managers should direct any questions that
they may have to their appropriate corporate officials who, if need be, can
contact Sylvie Joseph, Manager,
Corporate Pay Administration & Community Renewal at
946-4679 or by e-mail: Joseph.Sylvie@tbs-sct.gc.ca.
Original signed by
Barry Fennessy
Director
Project Management, Internal Service Transformation & Pay Administration
Labour Relations and Compensation Operations
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