Paragraph 35(7)(c) of the Employment Insurance Regulations provides that relief grants in cash or in kind do not constitute earnings. The phrase "relief grant" suggests financial assistance that is given to alleviate hardship. Hardship includes, but is not limited to, circumstances of personal destitution, emergency or disaster. Hardship may also comprise the broader circumstances of financial or other adversity, not necessarily amounting to destitution, emergency or disaster.
Paragraph 35(7)(c) Employment Insurance Regulations
Canada (A.G.) v. Vernon [1995], F.C.J. No. 1394 (F.C.A.) A-597-94
There are three closely related aspects which are helpful in determining whether a payment constitutes a relief grant: the circumstances giving rise to the loss, the type of loss for which the compensation is being paid, and the nature of the compensatory scheme.
Canada (A.G.) v. King, April 10, 1996, F.C.J. No. 483 (F.C.A.) A-486-95
With respect to the first factor, the circumstances giving rise to the loss, the payment need not be motivated by an emergency situation. However, a payment is more likely to be a relief grant if the circumstances giving rise to it are unusual or anomalous, such as where the type of loss being compensated for is unique to a certain type of employment and is not ordinarily experienced by the general workforce.
Canada (A.G.) v. King, April 10, 1996, F.C.J. No. 483 (F.C.A.) A-486-95
With respect to the second factor, the type of loss suffered and for which compensation has been paid, if the payment is directly related to a critical aspect of the employment relationship, for example, is paid as wages or benefits earned but not paid, the amount will not be considered a relief grant.
Canada (A.G.) v. King, April 10, 1996, F.C.J. No. 483 (F.C.A.) A-486-95
With respect to the third factor, the nature of the compensatory scheme under which the payments are made, the possibility of the payor recovering the monies paid militates against the payments being characterized as a relief grant.
Canada (A.G.) v. King, April 10, 1996, F.C.J. No. 483 (F.C.A.) A-486-95
No one of these three factors is individually determinative. Rather it is their cumulative effect which leads to the conclusion of whether the payments in question constitute a relief grant.
Canada (A.G.) v. King, April 10, 1996, F.C.J. No. 483 (F.C.A.) A-486-95
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2009-04-28