6009

Wage-Loss Replacement Plan (WLRP)

A Wage Loss Replacement plan is an arrangement between an employer and employee or a group or association of employees, where benefits are payable on a periodic basis if the employee suffers a loss of employment income due to an illness, maternity or accident. 

When part of the premiums are paid by the employee, a deduction from the wage loss income may be taken for the premiums paid by the employee. 

If the plan is fully funded by the employer, all income received from the wage loss replacement plan is taxable in the hand of the employee.

If the plan premium was paid in full by the employee, no part of the wage loss replacement income is taxable.