Free Consultation

How do I calculate my surplus income?

Is the only deduction allowed to calculate any surplus income the income tax deductions that comes off my earning? Are the amounts for C.P.P. and E.I. also taken off when considering any surplus income? Also, I have medical insurance (started as Blue Cross many years ago) that is automatically withdrawn from my account….would that premium also be deducted when calculating surplus income??

Posted from: Ontario

One Response to “How do I calculate my surplus income?”

Jillian Taylor-Mancusi, Trustee | B.A. | C.I.R.P said...

Section 68(2) of the Bankruptcy and Insolvency Act defines surplus income as “the portion of a bankrupt individual’s total income that exceeds that which is necessary to enable the bankrupt individual to maintain a reasonable standard of living, having regard to the applicable standards…”

These “applicable standards” are defined by Directive 11R2-2013.

The answers to your questions can be found further in Directive 11R, paragraph 5(2) which reads “the family units total monthly income is determined by subtracting from the total of all its members’ monthly incomes the following amounts as applicable:
in the case of a salaried employed, minimum statutory remittances (income tax, pension and employment insurance deductions) and other mandatory deductions paid.
A Blue Cross insurance premium that is not a mandatory deduction from your pay cheque does not constitute a deduction when calculating surplus income.