Is insurance settlement money taxable?
A friend of mine who lives in Ontario was in a serious car accident 1.5 years ago (hit by one car from behind and then another oncoming car)
Not sure about all the details of the settlement, but part of it has been finalized and he got a settlement payment from the insurance company. It is close to $30K. The second case is still pending. He is wondering about the following:
1-Is this $30K taxable? will he have to pay taxes when he files his taxes next year? on the CRA website, it is not very clear, it only talks about death benefits (most amounts received from a life insurance policy following someone's death http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... d-eng.html
2-At the time of the accident and ever since, he has been on welfare: does he need to let them know and whether they (ODSP) will deduct money from him?
I found the following and not sure if this confirms that they won't deduct money from him as a result of this settlement?
[QUOTE]Proceeds from a court judgement or legal settlement or an award from a statutory tribunal, such as Compensation for Victims of Crime, received as damages or compensation for pain and suffering, due to injury to or the death of a member of the benefit unit, up to a maximum of $100,000 for each member of the benefit unit. See Directive 4.6 Compensation Awards;[/QUOTE] - according to the 'Ontario Disability Support Program - Income Support. Directives. 5.1'
thanks,
Not sure about all the details of the settlement, but part of it has been finalized and he got a settlement payment from the insurance company. It is close to $30K. The second case is still pending. He is wondering about the following:
1-Is this $30K taxable? will he have to pay taxes when he files his taxes next year? on the CRA website, it is not very clear, it only talks about death benefits (most amounts received from a life insurance policy following someone's death http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... d-eng.html
2-At the time of the accident and ever since, he has been on welfare: does he need to let them know and whether they (ODSP) will deduct money from him?
I found the following and not sure if this confirms that they won't deduct money from him as a result of this settlement?
[QUOTE]Proceeds from a court judgement or legal settlement or an award from a statutory tribunal, such as Compensation for Victims of Crime, received as damages or compensation for pain and suffering, due to injury to or the death of a member of the benefit unit, up to a maximum of $100,000 for each member of the benefit unit. See Directive 4.6 Compensation Awards;[/QUOTE] - according to the 'Ontario Disability Support Program - Income Support. Directives. 5.1'
thanks,
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