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I posted this on my facebook page which started a nice little debate/info session. Seems not a lot of people new about this. So I think I'll post it here too for FYI and to stir a bigger pot ;D
Yep, the Federal Gov't actually seems to make a profit.
I would just like to take this opportunity to thank the government of Canada for purchasing a LTD insurance plan for the CF, and for making us pay into it. Thus insuring that when medically released we will have 75% of our Salary for 2 years while we re-adjust to civilian life and get back on track. I would also like to thank that same government for counting that payment as income, and having the Insurance Company remit 20% of it back to Canada Revenue. That's right folks. For those not keeping track.
75% - 20% = 55%
Myself and everyone else who gets medically released and collects disability from our LTD insurance plan only sees 55% of the money. The Crown over 2 years for a Cpl IPC3 will recoup a tad over $17K in taxes. And since the remainder of what you get is just over the income line you'll make too much to get much of that back come tax time.
woohoo, thanks for looking out for us. So much for taking time off to recover. Back to work I guess, so I can buy bread and pay my Mortgage.
Yep, the Federal Gov't actually seems to make a profit.