Lump Sum Pension – Is It Income Or Property?

Date: 29 May, 2018| Author: Fred Streiman

Recently Justice Trousdale in the case of Hewett v. Rogers had to struggle with how to treat a lump sum tax free payment of $345,000.00 to a veteran of the Canadian Forces.

This money was labelled as a lump sum payment as compensation for all the serious injuries and disabilities Mr. Hewett suffered as a result of his service.

The wife argued that this money should be treated as income spread over a 10 year period and as such would have a significant effect,increasing the quantum of support owed by Mr. Hewett.

Justice Trousdale rejected this and decided to simply spread out the $345,000.00 over the balance of the recipient’s life expectancy. The net effect was a relatively small increase in the quantum of support. While this case is statute driven, it represented an interesting approach as to how to deal with lump sum disability payments. These payments are the subject of numerous cases and judicial interpretation as well as a treatment under the support guidelines.