Bill C-254, Income Tax & EI changes for Severance Pay
June 23rd, 2011 - 4:55pm
Irene Mathyssen London—Fanshawe, ON moved for leave to introduce Bill C-254, An Act to amend the Income Tax Act and the Employment Insurance Act (severance pay).
Mr. Speaker, the purpose of the bill is to assist people who lose their jobs and enable them to better manage their money.
First, to help people save for retirement, the bill would change the Income Tax Act to allow a taxpayer to apply for a one-time contribution of any severance pay to his or her RRSP.
The bill also calls for changes to the Employment Insurance Act to exclude severance pay from the determination of earnings when determining deductions from benefits or the commencement date of the payment of benefits. This would ensure that those who were laid off would receive their benefits sooner. It would enable them to manage to continue with their mortgage payments and to pay for their kids' education instead of waiting and waiting for the employment insurance benefits they deserve. It would also allow older workers to invest their severance in RRSPs without penalty.