Canadian Veterans Advocacy > Bill C-55

C-55 and SISIP LTD Calculations - Reservists

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Callaghan:
Follow-up on the "enhancement" to SISIP LTD ... I finally got someone at SISIP who was able to explain exactly how the "enhancement" of $700/m resulted in a net gain of $50/m.

Under the previous calculations, ResF veterans had their LTD calculated as 75% of a "deemed" release-salary of $2000/m, meaning that our pre-deduction/clawback LTD was $1500/m.  The allowed extra-earnings offset amount was calculated by taking the difference between the deemed "gross" salary and the LTD amount and multiplying it by two.  This meant that the first $1000/m earned through employment was offset from the LTD at $0.50 on the dollar; anything over $1000/m is offset dollar-for-dollar.

However, with the C-55 enhancement that finally received Treasury Board approval last week and was retroactively applied to Oct-2011; certain things changed.  For starters, the new "deemed" release-salary for ResF pers is now calculated as 75% of $2700/m, or $2025/m LTD.  Under this calculation, the difference between the two amounts means that the first $1350/m of employment earnings is offset from the LTD at $0.50 on the dollar; and anything over $1350/m is offset dollar-for-dollar.  Or at least, that is how it works for ResF pers who were 3B released on or after 1-Apr-2012.

For those of us who were released prior to 1-Apr-2012, things get a little more complicated.  Our "deemed" salary is remaining at $2000/m, with a top-up to bring us in-line with ResF pers as described above.  However, for the purposes of calculating our potential employment offset, instead of double the difference between $2700 and $2025 being used as the basis, it is the double the difference between $2000 (the old amount of  "deemed" salary) and $2025 (the new 75% LTD), or negative $50/month.

In other words, because of the screwball method of calculating the possible employment offset, ResF pers on SISIP LTD who were released before 1-Apr-2012 now have EVERY SINGLE DOLLAR of employment income offset DOLLAR-FOR-DOLLAR from their LTD.  Thus explaining how/why my LTD went from $630/m to $680/m (I earn $1090/m as a graduate-student at the University of Toronto).

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