The Employment Insurance Act (EI) provides for the establishment of boards of referees to provide the first level of appeal for claimants, from a decision of the Human Resources and Skills Development Canada (HRSDC). Payment of remuneration and other allowances has been established by the Treasury Board (TB).
The chairperson and members of the board of referees are not employees of Human Resources and Skills Development Canada (HRSDC).
For the purposes of the Canada Pension Plan (CPP), Quebec Pension Plan (QPP) and Employment Insurance (EI), chairpersons and members of the board of referees are considered "in tenure of an office". This is distinct from being employees of HRSDC.
Under section 5 of the Income Tax Act, remuneration received by chairpersons and members of the board of referees is considered income from an office or from employment.
In addition, remuneration paid to the chairpersons and members of Boards of Referees qualifies as income from an office or employment, within the meaning of sections 32 ff. of the Quebec Taxation Act (R.S.Q., Chapter I-3).
The board chairperson and board members will be remunerated at the per diem rate determined for the session for which they were called, regardless of the length of this session.
Travel, subsistence and other allowances, including compensation for loss of remunerative time, shall be paid to the chairperson and members and to any other person required to attend before the board.
The chairperson and members of a board of referees will also be reimbursed for justifiable travelling expense in accordance with the travel directive and subsistence allowances in connection with the operations of the board of referees and approved by the Treasury Board.
2.3 Taxation Issues – Source Deductions
Under both the Income Tax Act and the Taxation Act (Quebec), remuneration received by chairpersons and members of the board of referees (excluding reimbursement of expenses) is considered income from an office or from employment. Therefore, income tax must be deducted from this income.
HRSDC must use a T4 to declare the earnings paid (excluding reimbursement of expenses) to these individuals to the Canada Customs and Revenue Agency - CCRA (formerly known as Revenue Canada), and a Releve 1 - Employment and other Income, for Revenue Quebec.
In terms of filing income tax returns, any decisions or rulings on the status of a chairperson or panel member of a board of referees must be made by the Canada Customs and Revenue Agency or Revenue Quebec.
Board members may also claim certain expenses for tax purposes. If board members are interested in claiming expenses for federal income tax purposes, a CCRA form T2200, Declaration of Conditions of Employment should be completed. This form describes the payees' conditions of employment and only the relevant sections should be completed.
It is not the responsibility of HRSDC to assess the relevance of the claim. Responsibility Centre (RC) managers of HRSDC must, however, complete the appropriate portion of the form upon request by the individual.
HRSDC has set out specific conditions of employment for all board members. These conditions are outlined in the Frequently Asked Questions section of the policy. A commonly misinterpreted expense item involves maintaining a home office. It should be noted that board of referees' chairpersons, or members, are not required to maintain an office at home as space is available for them at the Human Resource Centres of Canada(HRCC).
2.3.2 Canada Pension Plan (CPP) & Quebec Pension Plan (QPP)
Pursuant to subsection 2(1) of the Canada Pension Plan, chairpersons and members of the board of referees are deemed to be in receipt of pensionable income. Also, the chairpersons and members of Boards of Referees are considered to be employees within the meaning of paragraph (g) of section 1 of the Quebec Pension Plan Act because they hold an office. Therefore, CPP/QPP must be deducted. As HRSDC is responsible for the employer's portion, the remittance to CCRA should include both the employee's and employer's portion.
2.3.3 Employment Insurance(EI)
For the purposes of the Employment Insurance Regulations, remuneration received is not considered insurable earnings. Therefore, no deductions for EI should be made.
Manager's role:
The Human Resource Centres of Canada (HRCC) Director, with the assistance of the Regional Financial Services Director/Manager and the Board of Referees Assistant, is responsible for payment requisitioning, and for certification of performance, under section 34 of the Financial Administration Act (FAA).
The Regional Financial Services Director/Manager is responsible for certifying the payment requisitions under Section 33 of the FAA, to pay board members.
4.References:
Training Program for Employment Insurance Board of Referees
Employment Insurance Regulations
Employment Insurance Act
Income Tax Act
Quebec Taxation Act
Canada Pension Plan
Financial Administration Act
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