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This situation brings its own share of financial stress and anxiety, especially if it’s not voluntary. However, in this situation, you may be eligible for an extended disability benefit up to the age of 65.
You may also be eligible for an allowance for loss of income. This would be modulated according to any wages earned from work, which would be deducted from this allowance. This taxable allowance will also produce annual slips. It is important not to confuse it with pensions, which are usually tax-free.
Finally, the premiums you paid for long-term disability insurance can be deducted from your total income. To do this, it’s important to keep the confirmation letter so you can use it when you file your annual tax declaration.
In medical transition, you’ll receive several taxable incomes. Consequently, you’ll need to adjust your tax deductions at source to avoid unpleasant surprises after your April tax declaration such as owing a larger amount of tax than expected. (On this particular point, see the column: “Career transition and finance: adjusting tax deductions at source“).
Every transition path is different and may be more complex than you thought. Your financial advisor would be in the best position to support you at every stage of a medical transition.
Patrice Bergeron, General Manager of the Caisse Desjardins des militaires.
