Disability awareness and Benefits for disabled
Disability Insurance 101
So you’ve got disability insurance at work right? If you become disabled, you’re going to get a new paycheque while you’re disabled…right?
It may not be quite that simple. Here’s some points you should consider about your existing or prospective disability insurance policies:
· What’s your monthly benefit? You could have 2/3′s of income. Or 50% of income. Or any number – it varies by policy. Insurance companies typically want a maximum coverage of 2/3′s of your gross employment income. But remember that’s 2/3′s of your gross income, not your take home. And since disability benefits are normally not taxable income, you would be taking home 2/3′s of your gross – pretty much the same as your pre-disability take home income.
· Waiting period or elimination. This is the time period you have to wait to get benefits, after you’ve become disabled. A 90 day elimination period means benefits won’t start paying in until you’ve been disabled 90 days. Longer elimination periods mean you’ve got no income for a longer period. Shorter elimination periods are available,but get very expensive fast.
· Duration of benefits. This is something many people miss completely. If you become disabled, how long are you going to receive benefits? Don’t say ‘forever’, because you’ll be wrong. And don’t say ‘until I retire’ because you are quite likely wrong as well. Typical options for duration of benefits are 2 years, 5 years, or to age 65. But 2 or 5 years are often chosen to reduce costs. Group policies (work policies) frequently will have a 2 year benefit period. If you become disabled, you’ll get paid for 2 years – then it’s over.
· Cost of living option. This is a rider available on some policies. It increases your disability payments with roughly the inflation rate. If you’re disabled for a couple of years, this doesn’t matter. If you are disabled for an extended period of time then this rider becomes extremely important in maintaining the value of your benefits.
· Own occupation. Generally after two years of disability the insurance company will tell you to get back to work doing whatever you can – even if it’s not what you were doing before you became disabled. While I’d suggest that from an insurance perspective that if you can work doing anything then you should – but most consumers disagree. Most folks want to know that if they can’t do what they were doing before they became disabled, then they’re still disabled. The solution to this is to get the ‘own occupation rider’ that removes the 2 year restriction on being disabled from your own occupation.
· Partial and residual disability. OK, this is where things can get messy, and policies can vary widely. What if you’re disabled for a few months. Then back to work for a month. Then off for three months. The second three months – is that a new claim subject to a new 90 day waiting period? What if you can work, but only 50% of the time? Do you get paid 50% and get 50% of your benefits? You need to look at your own policy or your work policy to find out what you have. Personally I prefer the Cadillac of plans for these options as I’d like to think that if I can work even a bit, or even off and on, that I want the opportunity to do so without screwing up what benefits I do have.
· What disability insurance isn’t. Disability insurance should properly be called ‘long term disability insurance’. It’s intended to cover you if you become disabled over an extended period of time. Short term disability insurance is common with some employers, but is more of a benefit than insurance (60-90 days without income is a severe hardship, but shouldn’t be a life altering problem. And if it is, you can self insure by building your savings.). And it’s not long term care insurance which is something else entirely. Folks frequently mix up these three things.
Here’s your budget challenge. I challenge you to find out what level of benefits your current disability policy offers and then live on that for the next 60 days. Worst case you’ll have saved some money. But you’ll also find out if your current coverage is actually livable should you become disabled. Have to dip into your savings to stay afloat? That certainly won’t last if you’re permanently disabled.
Other things to note
· In order to save costs, many work policies have a 2 year duration of benefits. If you become disabled, you’ll get paid for 2 years, then you’re on your own. The solution to this is to purchase an individual disability insurance policy with a 2 year waiting period and benefits to age 65 (i.e., no benefits for the first two years of disability, then coverage to age 65. During the initial two years your work coverage would be paying benefits).
· Because options vary so widely, it’s difficult to compare based just on premium. However if you are looking to lower costs, take note of the 6 points above and put them in order of importance. Do you care about own occupation over only having benefits to age 65 instead of 5 years? Can you live with a longer elimination period in order to get a longer benefit period? Are you prepared to reduce your benefits? My personal preferences are monthly benefit, duration of benefits to age 65, and cost of living over all the other things. I set those three first because I buy disability insurance for the worst case scenario – I’m disabled forever.
· Both the application and claims process for disability insurance are disliked by consumers. Applications take a bit of work. And when it comes claim time companies are going to expect solid and ongoing proof that you are completely disabled. Frankly, when it comes time for a disability claim, nobody’s happy – consumers, insurance companies, nor agents. And for every story a consumer has about a friend who got screwed over, the insurance companies have a story of consumers building additions on their house while supposedly being completely bedridden. I don’t have an easy answer for this, other than to make sure you actually read your policy or information from work and make sure you know what you’ve got.
· Individual disability insurance (i.e. Policies you own, rather than work policies) are typically perceived as being expensive. Work policies are frequently perceived as less expensive because in many cases the employer’s paying part of the premium or has tailored the policy to limit benefits (all most people care about is whether they ‘have’ a policy at work. Few ever ask if the benefits and coverage are worthwhile). While the high premiums may seem like a gouge, you may want to consider the reason why premiums are high. It’s not because of the high-flying lifestyles of insurance execs – the disability insurance marketplace is competitive enough to keep a lid on premiums. Premiums are high because insurance companies get a lot of expensive claims. And what that means to consumers is – there’s a pretty high probability of a disability claim before age 65 for many of us. For most of us, we’re the ‘teenaged drivers’ of the disability insurance world. I know that’s slim comfort – but like claim time, there’s little easy solution to high premiums resulting from high claims.
· If the high premiums of an individual policy more than you’re prepared to pay and you’re prepared to give on benefits for some level of coverage, accidental only disability insurance policies are available. These policies are noticeably less expensive, provide coverage from the first day of an accident (no waiting period), require no medical exam and are very straightforward. In exchange for fast, easy and cheap you give up things such as disability coverage for illness and cost of living increases.
Discussing disability insurance is even less fun than discussing life insurance. But it’s important. For most of us our income is our single greatest financial asset, and disability insurance protects the loss of that asset.
If you’ve got a disability insurance policy at work, today might be a good day to print out this article, go grab your benefits brochure, and compare the above points with what you have. There’s no time like the present to make sure you’ve got the coverage that you think you have. And if you’ve got an individual policy, you might consider doing the same point by point comparison.
Disability insurance: Insuring the Money Machine
I hate columns that sound pushy or salesy.
Like the Aesop fable about the wind and the sun, I genuinely believe that appealing to someone’s sense of pride will get you miles farther than shaming them into doing what you want. And yet here I go…
I’m not sure when it started, but somewhere down the line disability insurance got a bad reputation. Whether it was the fault of bad advisors and high pressure sales tactics, or unreliable payouts from bank-issued mortgage insurance, there is active resistance to what is otherwise a clear and meaningful gap in personal protection.
Do you have home insurance?
If you own a home, mortgage or not, chances are you have house insurance. Why? Because your home is an asset that you otherwise can’t afford to replace. And when a house is destroyed by fire, it’s dramatic. Families huddle together and watch as their photos, their memories, and all their worldly possessions go up in smoke. Neighbors feel for the victims, but are comforted knowing that once the fire crews leave, a restoration team will show up, and then the construction crews, then the furniture, and the homeowners. Because while house fires are tragic and scary, they are also a covered event on a home insurance policy.
Disabilities are private
Disability insurance isn’t always as dramatic, and is rarely as public. One of your colleagues stops coming to work. A replacement is hired. You don’t see their personal struggles. You don’t hear their family suffering. And you don’t notice the insurance company making monthly deposits into their bank account, coordinating them with the right doctors and specialists, and paying for their retraining so that they can eventually, get back to a normal life.
Just because it’s not as dramatic, doesn’t mean it’s not as important. You have a 1 in 1200 chance of having a house fire. Do you have a house insurance policy? You have a 1 in 3 chance of being disabled for 90 days or longer before age 65. Do you have a disability insurance policy?
Protecting your lifestyle
Disability insurance isn’t just the replacement of income – it’s the protection of your lifestyle. Have cancer but still want to renovate the kitchen? Get conked on the head but still want your kids to go to post-secondary school? Had a heart attack but still feel like you’d be useful in another industry? If you have a properly structured policy built by a licensed professional, disability insurance will replace your income. It can also provide retraining benefits. It can also increase every year, just like your wage would have. For small business owners it can also be based on loss of duties rather than loss of income (because we all know you’re still going to try to go to work). For health care professionals it can pay if you become infected with HIV (preventing you from working, even though you retain all of your physical capacity).
The Money Machine
Imagine you’ve got this machine that sits in the basement. Once a month, it makes a couple beeping noises and prints out a cheque. There’s a countdown on the case of the machine. Last month was 258. This moth is 257. Next month will be 256. It’s a countdown until the machine runs out of paper. And once it’s out of paper, no more cheques. You’re free to do what you’d like with each of the cheques you receive. You can pay down your mortgage, you can buy yourself a nice new car, and you can put some away into savings, knowing one day your machine will run out of paper.
If you had this machine in your basement, you would also spend a bit of each cheque – say, 5% for example – to insure the machine. Because money machines are sensitive and finicky. If there was a paper jam or a misfeed, it could take years to fix. If the jam was bad enough, the machine might need to be replaced altogether.
But this machine doesn’t just live in your basement. You take it with you everywhere you go. Every time you order nachos instead of salad. Every time you try to join highway 16 from the Kitscoty intersection. Every time you walk out your front door with a green tea in one hand and your cell phone in the other, trusting your feet to find the stairs.
You are that money-making machine, and you are always with you. If you can’t afford to live without the cheques you make, then you need to insure them.
Is disability insurance expensive?
So how much does one of these disability policies cost? The answer is lots. And if it’s not a lot, then it’s probably not much good.
The reason disability costs so much is not just the high rates of claim, it’s the amount that the insurance company is on the hook for.
House and land, we could probably sell our place for $300K. $310K if we’re lucky. Replacement cost on the building itself would be closer to $250K. We’ve got a wood burning fireplace and a garage, so our house insurance is going to cost a bit more than perhaps the average would, but our policy right now costs around $1,300 per year. That’s about $5.2 per thousand dollars of home value.
If you’re a 45 year old female (FYI – females cost more) with an indoor sit-down job and you earn $90,000 per year, a decent $4,500/month disability insurance policy would cost around $271 per month. At stake is 20 years of income, or approximately $1.54 million (based on 3% COLA). That’s about $2.1 per thousand dollars of income.
If you’re a 45 year old male who does light-duty oilfield work and earns $165,000 per year, a $7,000 per month decent disability insurance policy would cost around $394 per month. Twenty years of your income is worth approximately $2.4 million (based on 3% COLA), which is about $1.96 per thousand dollars of income.
So, yes, disability insurance is expensive. But only because your money machine is worth so much to you. Compared to house insurance, something you’re much less likely to claim on, disability insurance units cost less than half.
If you are actively choosing to forego disability insurance, you’re saving 5% of your income. But what you’re risking is of all of your future income for the rest of your working career. Having disability insurance doesn’t affect your chances of becoming disabled. It only affects your chances of being able to recover.
How much do you know about disability insurance?
Most Canadians don’t protect themselves against the loss of their earning power. This year one in eight working Canadians will become disabled for more than three months, and half of these individuals will be disabled for more than three years.
When people are asked “what is your most valuable asset?” the usual responses are their homes, cars or investment portfolios. Usually, most people don’t think of what allows them to buy and maintain these material things and pay for food, utilities, the mortgage and other living expenses.
The answer is simple; it is our ability to earn an income. Our personal income allows us to repay debts, accumulate wealth and develop a lifestyle for our families and ourselves. Unless we are independently wealthy and we do not need to work, disability insurance is an essential part of risk management while implementing a comprehensive financial plan for ourselves.
Consider a 35-year-old lawyer earning $120,000 today, who plans to work to age 65. Using the historical average rate of inflation of four per cent for the 20th century, this lawyer will earn $5.7 million over the next 30 years.
A disability insurance policy is a contract between the insured (you) and an insurance company. The monthly income benefits that you buy will only be paid to you based upon the definitions and wording in your contract.
The most important definition in the disability contract is the definition of “disability.” This definition is the heart of your plan. If, as a reasonable person, you cannot easily understand the definition of disability and how/when your disability income will be paid out, then you should not purchase that plan or deal with your current insurance agent. If the definition appears unclear, be aware that an insurance company at the time of claim has the power to define what constitutes a disability through its own interpretation.
“Own occupation” is the most clearly defined coverage and the most expensive to buy. It is usually sold as a rider to the regular coverage of a disability policy. Owning a policy with the ownoccupation definition pays you an income when you are disabled and not able to perform the duties of your chosen occupation. You would be eligible to collect full disability benefits, for example, when you are no longer able to work as a lawyer, even if you decided to work in another occupation, such as a cashier at a fast food restaurant, earning less, the same or more money than you did when you were a practising lawyer.
Regular occupation is the most common coverage found in privately purchased disability policies today in Canada. You will be paid a benefit when you can no longer work in your chosen profession because of disability or sickness and do not have employment at all. If you choose to work in another profession, the definition of your occupation then changes to that of your new work situation. So if you were a lawyer and can no longer do this type of work but choose to be employed as a cashier at a fast food restaurant, the definition of your regular occupation changes to that of cashier and the insurance policy will no longer pay you a disability income.
This definition is found in most group and employer-sponsored disability policies and is the most misunderstood. This definition gives the insurance company the most leeway to interpret what constitutes a disability and to determine what the insured can or cannot do to earn a living. With the any occupation definition you will only receive a disability income from an insurance company provided you could not work at all in a job that you are “reasonably suited to do by your education, training or experience.”
So if you were a lawyer and can no longer perform this type of work, the insurance company will have the power to make the determination if you are qualified to be a cashier at a fast food restaurant.
Even if you choose not to be a cashier, just because it determines that you are qualified to do so, the insurance company can legally deny you your disability income.
Many people have a difficult time deciding how long a benefit period they should buy. The average length of disability is about three years and your options for a disability policy benefit period range from two years to five years, or to age 65.
If you are a young professional and do not have considerable financial assets, a benefit period to age 65 is highly recommended.
Consumer Price Indexing
It is very important to consider purchasing a Consumer Price Indexing rider/coverage when buying a disability policy. An inflation rate of four per cent per year means that $1 today will have the buying power of $0.50 within 18 years. A cost-ofliving adjustment rider is designed to help you keep pace with inflation after your disability has lasted for more than a year.
This optional rider is designed to protect your future income. This rider is a must for young professionals. It offers the ability to increase your disability coverage, regardless of your health, as your income rises. With the earlier example of our 35-yearold lawyer earning $120,000 today, if his income only increased with inflation, he would have an annual income of $177,000 ten years from now.
By purchasing this option with his original disability policy this lawyer would be able to buy additional coverage without any additional medical underwriting requirements. In essence, if he was diagnosed with a heart condition, as long as he had future insurability on his policy he could buy more coverage and have no fear of being declined by the insurance company.
Review Disability Tax Credit Forms with Doctors
The Disability Tax Credit is lucrative—be sure to take the time to review the Disability Tax Credit Certificate (Form T2201) with your doctor.
This tax credit should be claimed if you or your spouse have:
· a disability that is severe and prolonged, which is expected to last for a continuous period of at least 12 months, starting in the tax year.
· markedly restricted basic activities of living. Marked restrictions include the following conditions:
− Permanent blindness (a CNIB number is usually available)
– Severe cardio-respiratory failure
− Inability to feed or dress oneself
− Inability to perceive, remember or think
− Inability to walk
− Inability to speak
− Inability to hear
− Inability to contain bowel or bladder functions
Taxpayers who must receive therapy like kidney dialysis may claim this credit if a doctor certifies that at least 14 hours per week are taken for such therapy.
The Disability Tax Credit Certificate (Form T2201) must be completed and signed by a medical doctor, optometrist, psychologist, occupational therapist, audiologist or speech-language pathologist and so on. Generally, the CRA requires that the form be
filed in the first year that the credit is claimed.
The Disability Amount may be claimed if there is a claim for Attendant Care Expenses elsewhere on the return. However, the Disability Amount may not be claimed if the costs of a full-time attendant or care in a nursing home or institution are also claimed as a medical expense unless the amount claimed is less than $10,000.
Government Grants for Disability Saving Plans Can be Very Lucrative
The Canada Disability Savings Grant can add significantly to the pensions set up for disabled individuals through the Registered Disability Savings Plan (RDSP).
If family net income is less than $87,123 for 2013, the grants can be up to triple the contributions made. For higher-income families, the grants can be as high as the contributions themselves.
For disabled dependants under age 19, “family income” means their parent’s income. For those over 18, “family income” means the income of the individual and their spouse.
The maximum grant is $3,500 per year ($1,000 for higher-income families) and is earned if the contribution is at least $1,000. In addition, the Canada Disability Savings Bond of up to $1,000 is available if family income is less than $43,561 (for 2013).
RDSPs were first available for 2008. For those who missed earning the grants and bonds in 2008 to 2012, they can be claimed by making a contribution this year. The maximum “catch-up” for grants is $10,500 per year (requires a contribution of $4,500). For bonds the maximum “catch-up” is $5,000 for contributions made in
Family Chats – Medical Expenses Can Be Claimed for Disabled Adult
To everything there is a season. . .and, unfortunately within a circle of life, illness may arise. This event may in fact require an inter-advisory team of financial professionals to help your loved one transition from capacity to incapacity.
Powers of Attorney, health care directives, and wills should be put in place, if there is time. The tax system can help, too. But often, guidance will be required on what documentation needs to be kept.
Did you know, for example, that caregivers can claim the medical expenses of adults they are supporting, if those incapacitated dependants do not need the amounts to reduce their taxes payable?
The medical expenses in this case are not based on family net income or the net income of the individual who is claiming the expenses. Rather, it is based on the net income of the disabled person, and that generally means a more significant tax reduction will result on your return.
Here’s an example: Pierre and Yvette care for and support Pierre’s mother, Sophia who lives with them. Sophia’s net income is only $5,000 for 2013. Her unreimbursed medical expenses total $9,000. Pierre can claim these medical expenses, reduced by 3% of Sophia’s net income to a maximum limitation of $2,152. This is calculated as follows: $9,000 – ($5,000 x 3%) to equal a claim of $8,850.
It’s Your Money. Your Life. Be sure to involve a legal advisor for the completion of the will, the Power of Attorney, and a health care directive. A financial advisor can assist with the planning of investment withdrawals and insurance. A tax specialist is instrumental in helping with complex and often-missed tax provisions–especially in a year of change–and in ensuring that investment withdrawals don’t create financial hardship down the road. Those tax savings can help fund professional fees and set a family up financially for the honor and responsibility of giving care.
Caregiving? Real Wealth Managers Can Help Minimize the Financial Impact
Planning for caregivers of the sick and the disabled is an important role for Real Wealth Managers™ who are well connected to their clients. Often the biggest concern for caregivers is the maintenance of income sources while they give care to their sick loved ones.
This can cause stress and burnout and financial pressure, particularly in a palliative care situation. The tax return may also be more complicated, but that can be a good thing because a bigger tax refund may result. Consider providing information services and advocacy for caregivers when illness strikes in the family:
Employer-paid leaves. Many employers are accommodating when their employees have to take time off to give care. Speaking to the HR department at work can uncover a host of assistance, including the opportunity to use up banked time or vacation time. However, if you must take a leave without pay, consider the following:
EI Compassionate Care Coverage.Employment Insurance will provide benefits for a maximum of six weeks of compassionate care benefits if the family member is at risk of dying in next 26 weeks. This can be used for psychological or emotional support; arranging for care by a third party or directly providing or participating in the actual care.
To qualify, there must be a 40% or more decrease in income, the caregiver must have accumulated 600 insured hours in the last 52 weeks and there is a two-week waiting period. The maximum assistance for 2013 is $501 per week.
Investment Accounts. The family may have to withdraw money to fund the non-working gap period. This is an important time for council from the investment advisor. Taking a tax-free return of capital from one of the family’s non-registered accounts can make sense. The same is true of a TFSA. A less attractive option from a tax viewpoint is to withdraw from a registered account as the amounts will be taxable in the year withdrawn. Use of the Knowledge Bureau’s Income Tax Estimator can help with “what if” scenarios to judge resulting tax liabilities.
Self-Employment. The business owner will suffer economic loss as well; possibly having to hire extra staff to cover workloads. If that results in a loss, other personal income of the year can be offset by the loss if the business is unincorporated. A tax professional will help to project income and losses and may be able to adjust quarterly instalment payment requirements as well.
Do you know of someone dealing with the devastation of critical illness?
There is much we can do from a tax efficiency point of view to help and guide families.
For example, did you know premiums paid for private disability or critical illness insurance are not tax deductible, but benefits received are not taxable, either?
This coverage can provide welcome financial relief and respite to emotionally exhausted families caring for critically ill loved ones.
They are often paid within a month after the critical illness diagnosis and the money can generally be used for any purpose.
In addition, if your life insurance provides for it,
a lump sum payment may be available as an advance on the death benefit if you are diagnosed with less than one (or sometimes two) years to live.
This is also a good way to receive a tax-free benefit to help pay for the costs of end-of-life care.
Speak to a Distinguished Financial Advisor – Tax Services Specialist and a Master Financial Advisor –
Investment and Retirement Income Specialist to plan strategically for this eventuality.
Disability Awareness: Other Income Sources
Workers’ CompensationIf you receive Workers’ Compensation benefits, they are taxable and you will receive a T5007 slip at tax time. When you enter the slip, your software will include the amount on an income line – Line 144 of your return. That’s important because this is the line that triggers an offsetting deduction which your software will automatically enter at Line 250. The result of including this amount in income and then deducting it at Line 250 is that the payments are included in your net income but not your taxable income. Therefore the payments may then reduce your refundable tax credits and may also reduce any non-refundable tax credits that may be claimed for you.
Wage Loss Replacement Benefits.If you were eligible to participate in a WLRP and you paid all of the premiums, then benefits you receive from the plan are not taxable. However, if your employer paid some or all of the premiums, the benefits you will receive will be taxable. You can deduct the premiums you paid from that income before you report the net amount on Line 104. All of the premiums you have paid to date can be deducted.For example, Connor was injured at work and received benefits from a wage loss replacement plan that was jointly funded by employee and employer premiums. Because Connor’s employer paid a portion of the premiums, the benefits are taxable, but Connor can claim a deduction for all of the premiums he paid into the plan that he has not deducted previously. In this case, Connor has paid $100 a year for the last 10 years since he started his employment. The deduction, therefore is $1000.
SeveranceIf you’re leaving your employment due to a disability, you may receive a severance package or job termination payment. RRSP planning is important to reduce taxes on receipt of severance.
Professional tax assistance is highly recommended. Your tax and wealth advisory pros can help you maximize your RRSP contribution room, plan a tax-efficient withdrawal schedule to maximize refundable tax credits and minimize tax, and also take any redundant amounts (cash you are not needing immediately) and invest them in a TFSA for yourself or other adults in the family.
If you have a Registered Disability Saving Plan and are receiving disability assistance payments from the plan, a portion of these payments will be shown in Box 131 of a T4A slip.
That amount must be reported and is taxable. When you enter these benefits in your tax software, they will be posted to Line 125 of your return. The portion of your disability assistance payments that represents contributions to the RDSP will not be taxable
|Disability Awareness: EI Benefits for Disabled People
Advisors should be aware of and discussing income replacement opportunities with their client families if disability has entered into the picture.
These income sources can pay medical bills and assistance; however, they may be instrumental in ensuring that other investments stay intact. Here are some basic components of EI Disability supports:
You may be entitled to receive benefits from Employment Insurance as a result of your inability to work for up to 15 weeks. These benefits are taxable. They can amount to up to 55% of your average insurable earnings to a dollar maximum. Lower income families can receive up to 80% of the average insurable earnings. However, applying for them involves a qualification process with Service Canada, including health information with a doctor’s certificate, as well as detailed employment records. If you are eligible the payments will start in 28 days, after a two-week waiting period.
Complications arise when EI is received in conjunction with other income. For example, any money you receive during the two-week waiting period will be deducted from the benefits you are entitled to receive for the first three weeks, dollar for dollar.
Likewise if you work while receiving EI sickness benefits, or receive commissions, compensation under a work accident plan, group health or group wage loss replacement plan, payments under an accident insurance plan, or retirement income under a public or private plan, the amount you earn will be deducted dollar for dollar.
The good news is that the following types of income noted on the EI benefits website have no impact on EI:
· retroactive salary increases.
· disability benefits;
· survivor or dependent benefits;
· workers’ compensation benefits paid under specific regulations;
additional insurance benefits paid under a private plan that is approved by Service Canada (for example, payments for pain and suffering or medical expenses that you receive from an insurance company after you have been injured in a car accident);
· additional sickness benefits paid by your employer from a supplemental unemployment benefit plan (as long as the income, benefits, and additional amounts combined do not exceed 100% of your weekly earnings);
· sickness or disability payments received under a private wage loss replacement plan.
Repayments of EI and CPP. Because there is often a multi-year process to sort out repayments of those various income sources that overlap in the onerous qualification process and waiting periods. If a repayment is necessary, it is claimed as a deduction on Line 232 Other Deductions, in the year the repayment took place.
Legal Fees. Paid to object to or appeal a decision under the Income Tax Act, the Unemployment Insurance Act, the Employment Insurance Act, the Canada Pension Plan Act or the Quebec Pension Plan Act are deducted here, too.