Veterans Disability Allowance
I am in receipt of a Veterans Disability Allowance that was awarded to me for injuries sustained while in service. I fall under the old veterans charter so I receive this on a monthly basis as opposed to a lump sum. It is non taxable and I do not receive a tax slip so it is not even considered in the calculation of tax credits like the GST. I also receive a taxable earnings loss each month. My question is: Do I need to claim the Disability Award as income in bankruptcy. It gives me a large surplus that needs to be paid for 36 months. Had I received a lump sum disability award 5 years ago the bankruptcy wouldn’t have touched it.
Posted from: Ontario
I am sorry, but income is income no matter the source. You should discuss this with your trustee BEFORE you file, but your disability allowance will be subject to the surplusn income rules.
I understand your comment that if you’d received the lumpsum 5 years ago the money couldn’t be seized now (presumably because it would be all gone), but the counter argument is that you may not have incurred as much debt if you’d received the lumpsum and therefore some of the money should go towards paying down your debt now.