Supplemental unemployment benefit plan (SUB plan)

A seller laying off staff, temporarily or indefinitely, may run a SUB plan to top up what employees receive from Employment Insurance. A buyer meets one as a plan that may need to continue, change or end. See can I lay off staff right after closing and temporary layoff.

What the sources say

The Employment Insurance Regulations, s.37, say payments under a SUB plan are not earnings for the listed purposes of the Act, subject to the other provisions of s.37. That section also lists what a qualifying plan must contain, including that it be submitted to the Commission before its effective date. The CRA says a plan may be registered with Service Canada if it meets s.37, or with the CRA if it meets the registration conditions in s.145 of the Income Tax Act.

• Top-ups from a plan that does not qualify under the Income Tax Act are employment income, reported in Box 14 of the T4.
• Top-ups from a plan that qualifies are reported under Code 152 on the T4A, except maternity and parental top-ups, which the CRA says go on the T4.

Ask whether any plan exists, where it is registered and what it covers.