Income reported

Hello Friends,
Please help to clarify what income has to be reported to my insurance. I don’t feel comfortable to ask them directly. I am receiving a widow pension and they know about it and its not deductible.
What other types of income needs to be reported?
Inheritance, lottery wins, settlement from other companies (not employers), rental income?
Thank you

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Hi, check your policy booklet that describes the LTD insurance. It will have a list of the things that can be offset. It can be slightly different for every policy but in general:

  1. things that are income from working, or that specifically replace income from working, are deductible and need to be reported. Eg income from a side hustle, CPP disability benefits, car insurance accident payments for lost wages, workers compensation payments, pension from work, etc

  2. things that are not related to your income from working are not deductible and do not have to be disclosed -
    Inheritance, lottery wins, insurance payment to replace your burnt house, gifts from people who weren’t your employer, settlement because the computer you bought never worked, withdrawals from RRSPs or cashing out your stock market account to live on the money, GST/HST credit for low income people

  3. some things can fall under either category depending on the details, and on how much of it you do - for example

  • settlement from other companies (not employers) that includes compensating you for not being able to work like after a car accident in addition to paying for replacing your car
  • rental income from 20 apartments so that you are effectively working as a property manager
  • making a few stock market trades to invest part of your income for retirement savings wouldn’t be deducted, but spending all day doing day trading would turn it into a job that is deductible

In this case it’s better to disclose it to the insurer and say that you believe it’s not deductible. This is to maintain your credibility as an honest person - if the LTD insurer starts thinking that they caught you in a fraud you will be really, really screwed. So I disclosed the rental income from my basement suite even though it’s not deductible. If they claim it is deductible and you think it isn’t then ask them for the specific wording that they think applies.

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