1. Vacation pay and benefits related to a termination of employment
Vacation pay related to a termination of employment must be treated in the same way as any employment income that ceases. It is deemed to be DUE IN THE MONTH OF CESSATION, even if it is received later. The same goes for the payment of sick days unused by the employee.
- New application:
Vacation pay or unused sick days are included in income if it is RECEIVED OR TO BE RECEIVED during the month of application.
For the following month, it is excluded as income that ceases.
When it is RECEIVED DURING A MONTH AFTER THE MONTH OF APPLICATION, it is not included in income for the following month because it is not due in the month in which it is received. It will be included in liquid assets.
- Vacation pay during the assistance period
Where beneficiaries who receive assistance as a supplement to their work income lose their jobs and are entitled to their 4% (vacation pay) or unused sick days , this amount is added to the work income DUE FOR THE MONTH of the termination, regardless of when it is actually received.
It is this aggregate amount (salary due plus benefits) that is considered for the purposes.
2. Vacation pay or unused sick days unrelated to a termination of employment:
Where beneficiaries who receive assistance as a supplement to their work income are entitled to their 4% (vacation pay) or unused sick days, this amount is added to the work income due for the month in which it is received.
3. Vacation pay of construction workers.
New application:
Where a construction worker makes a NEW APPLICATION IN A MONTH OTHER than that in which his or her vacation is paid (November and June), this amount received as vacation pay is not included, as it is not due for that month. Nor is it included for the following month, as it is not due then. When it is received in November or June the amount will constitute liquid assets.
If the NEW APPLICATION is made in November or June, the vacation pay is included: it is received or to be received during the month of application and is excluded for the following month as income that ceases.
- During the assistance period:
In the case of beneficiaries who receive assistance as a supplement to their work income, the amount deducted by an employer as vacation pay for a construction worker was already included in income when the deduction was made. It is NOT INCLUDED in income again when it is received by the beneficiary but is included in liquid assets.
4. Severance benefits:
Severance benefits (separation or termination) are paid by employers to terminate employment contracts binding them to employees. Their inclusion depends on the nature of the payment made by the employer.
When severance benefits consist in a continued PERIODIC payment to employees of their REGULAR SALARIES over a given period of time (e.g. weekly, biweekly or monthly salary), they are considered employment income and the provisions related to this type of income (excluded work income and other related exemptions) apply.
When severance benefits take the form of a LUMP SUM or aggregate amount (e.g. a lump sum payment of $3,000 or an aggregate amount representing six weeks' salary), it is treated as a liquid asset to which the provisions related to this type of resource apply.