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Bill C-601

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C-601
Third Session, Fortieth Parliament,
59 Elizabeth II, 2010
HOUSE OF COMMONS OF CANADA
BILL C-601
An Act to amend the Income Tax Act and the Employment Insurance Act (severance pay)
first reading, December 8, 2010
Ms. Mathyssen

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SUMMARY
This enactment amends the Income Tax Act to increase the registered retirement savings plan (RRSP) deduction limit to include a taxpayer’s one-time contribution of any severance pay to an RRSP.
This enactment also amends the Employment Insurance Act to require the Canada Employment Insurance Commission to make regulations to exclude severance pay from the determination of earnings when determining deductions from benefits or the commencement date of the payment of benefits.

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3rd Session, 40th Parliament,
59 Elizabeth II, 2010
house of commons of canada
BILL C-601
An Act to amend the Income Tax Act and the Employment Insurance Act (severance pay)
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
R.S., c. 1 (5th Supp.)
INCOME TAX ACT
1. (1) The portion of the definition “RRSP deduction limit” in subsection 146(1) of the Income Tax Act before the description of A is replaced by the following:
“RRSP deduction limit”
« maximum déductible au titre des REER »
“RRSP deduction limit” of a taxpayer for a taxation year means the amount determined by the formula
A + B + R + S – C
where
(2) The definition “RRSP deduction limit” in subsection 146(1) of the Act is amended by adding the following after the description of R:
S      is the taxpayer's one-time contribution of any severance pay to a registered retirement savings plan;
(3) The definition “RRSP dollar limit” in subsection 146(1) of the Act is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):
(d) notwithstanding paragraph (a), for the years after the year in which this paragraph comes into force, the money purchase limit for the preceding year plus a one-time contribution of any severance pay by the taxpayer in the preceding year;
(4) Subsection 146(1) of the Act is amended by adding the following in alphabetical order:
“severance pay”
« indemnité de départ »
“severance pay” means an amount that is paid to a taxpayer as a lump sum by his or her employer in respect of the taxpayer’s loss of an office or employment, otherwise than by dismissal for just cause.
1996, c. 23
EMPLOYMENT INSURANCE ACT
2. The Act is amended by adding the following after section 54:
Regulations — exclusion
54.1 The Commission shall, with the approval of the Governor in Council, make regulations excluding any amount paid as severance pay from the determination of earnings for the purposes of determining the amount to be deducted from the benefits payable or the commencement date of the payment of benefits.
Published under authority of the Speaker of the House of Commons
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