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Loss of Income

LOI Fundamentals

In this section:

LOI Calculation - An Illustration (top)

The following table illustrates how Annual Loss of Net Income is calculated:

 

Understanding Key Terms (top)

Pre-Claim Gross Income

In all cases, Pre-claim Gross Income is an amount equal to the average of the three highest consecutive years of Earned Income prior to your year of disability. The Pre-claim Gross Income will not exceed $300,000 multiplied by the ratio that the Pension Index for the year bears to the Pension Index for 1999;

UNLESS

You were a student at the time of infection, in which case your pre-claim gross income may be calculated as follows: Pre-claim Gross Income is an amount equal to the then most recently available Average Industrial Wage in Canada if you meet the following criteria:

  1. You were not working prior to your infection with HCV
    AND you were infected either before you attained 18 years of age; OR
  2. You attained 18 years of age, while you were in full-time attendance at an accredited education institution in Canada AND did not yet enter the workforce on a permanent and full-time basis.
      
Ordinary Deductions

Ordinary Deductions means income taxes, Unemployment/ Employment Insurance, and Canada Pension Plan/Quebec Pension Plan deductions applicable in the province or territory where you are/were resident.
  

Post-claim Gross Income

Post-claim Gross Income is the total of:

  • Earned Income
  • Canada Pension Plan/Quebec Pension Plan benefits on account of illness or disability
  • Unemployment Insurance/Employment Insurance benefits
  • Income replacement benefits under a sickness, accident or disability insurance plan
  • EAP benefits
  • MPTAP benefits
  • Nova Scotia Compensation Plan benefits

About Earned Income (top)

Earned Income means taxable income for the purposes of the Income Tax Act from an office or employment or from carrying on an active business.

Earned Income can include: Types of income that CANNOT be claimed as Earned Income
  • Employment income
  • Commission income
  • Income from self-employment (i.e. business, professional, farming, fishing)
  • Rental income
  • Interest/Dividends/Capital gains/RRSP income
  • Pension/Superannuation/Old Age Security
  • Retiring allowance/Severance Pay
  • Rental income ( if considered passive investment income)
  • Scholarship
  • Unemployment/Employment Insurance benefits
  • Canada Pension Plan benefits
  • Social Assistance benefits
  • Workers Compensation benefits

Financial Documents That You Must Submit (top)

  • a complete T1 Income Tax return and notice of assessment
  • business financial statements
  • T2 Corporation Income Tax return and notice of assessment
  • T4/T4A slips
  • T1 Income Tax summary

Calculating Net Income (top)

The following is an illustration of how Net Income is calculated:

Deductions and Tax Credits
For the purposes of all income tax calculations, the only Deductions and Tax Credits that will be used if applicable are the following:

  • alimony and maintenance payments deduction
  • basic personal tax credit
  • married person’s or equivalent to married tax credit
  • disability tax credit
  • unemployment/employment insurance premium tax credit
  • Canada Pension Plan/Quebec Pension Plan contribution tax credit

IMPORTANT NOTE! (top)

Information herein is based on Section 4.02(2) (Sch. A - Transfused HCV Plan), or Section 4.02(2) (Sch. B - Hemophiliac HCV Plan) of the 1986-1990 Hepatitis C Settlement Agreement, and is provided solely to assist you in determining whether or not you should submit a claim for loss of income.

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