Wage Loss Replacement Plans

Do you want to attract the best employees to your business? Do you want to increase profitability? Do you want to achieve this a more efficient cost? Then a Wage Loss Replacement Plan is right for you.

A Wage Loss Replacement Plan is a program that benefits employees, including stock-holding employees, with wages amid a period of disability.

Wage Loss Replacement Plans can entail benefits or insurance coverage for:

• Sickness and injury;
• Weekly indemnity;
• Short-term disability;
• Long-term disability

Wage Loss Benefits can be tailored to suit every class of staff within a business. Coverage details will be outlined in writing and provided to employers and employees through their plan trustee. Coverage can be designed so that it is allotted under a group benefits plan or as a stand-alone benefits addition

Premiums and/or contributions provided by the employer toward disability benefits through a Health and Welfare Trust agreement are considered a tax-deductible expense under the current Income Tax Act.

However, contributions made toward wage loss replacement plans, outside of insurance premiums, cannot be carried forward as a tax-free benefit or contingency fund if unused. Therefore, any contribution amount not utilized should be reported as income each year.

When the plan is administration through the Health and Welfare Trust arrangement, the disability benefits are available at no cost to the employee, though the benefits, once received, will be subject to income tax.

For more information on providing wage loss replacement benefits through a custom-created Health and Welfare Trust agreement, contact Rorac today.