Retiring Allowances
- arise from severance pay, sick leave credits, court awards for wrongful dismissal
- included in earned income, but can transfer tax-free to your RRSP without using up the contribution limits
- provided while working but not part of employer’s RPP or DPSP; max 2.5x former employee’s 5 year average salary (confirm)
- earned for each year of employment up to and including 1995
- none for employment in 1996 or later
- amount varies by year
- before 1996: $2,000, plus
- before 1989: $1,500
| before 1989 | before 1996 | 1996+ |
|---|---|---|
| $1,500 per year of employment for which employer contributions to pension plan have not vested | $2,000 per calendar year of service | $0 |
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