Leaving the forces - Common Questions

  1. Will I be paid twice a month while on retirement leave?
  2. When will my Record of Employment (ROE) be issued?
  3. Why have I not yet received pay on the last payroll?
  4. When and how should I expect my leave cash-out and/or Special Leave on Retirement (SLOR) to be paid?
  5. Can I transfer my SLOR and leave cashout directly into a Registered Retirement Savings Plan (RRSP) account without withholding income tax at source?
  6. If I have a Letter of Authorization for reduction of income tax deduction from Canada Revenue Agency (CRA) for my cash-out leave, when can I expect to be reimbursed the tax portion?
  7. When will I receive my severance pay?
  8. How is severance pay calculated?
  9. Can I transfer my Severance Pay directly to a Registered Retirement Savings Plan (RRSP) account without withholding income tax at source?
  10. Can I obtain a Division of Severance Pay calculation for the period of my marriage?
  11. Can I transfer my Severance pay to a "spousal RRSP"?
  12. Why is the closing balance on my last pay statement not equal to the final payment on release issued by DPS 6?
  13. Who should I contact if I have not received a T4 for my pay?
  14. Who should I contact if I have not received a T4A for my severance pay or pension?
  15. Is it normal to receive one or more T4's as well as a Relevé 1 Form?
  16. What amounts are included in the amount shown in Box 14 (Employment Income) of the T4 Form?
  17. How do I get reimbursed for any education upgrading/academic training I have received during the past year?
  18. I recently received a DND cheque in the mail but I've been released for some time. What does this cheque represent?
  19. What documentation is required of me upon termination of my Class "C" service, in order to receive any balance that may exist in my pay account?
  20. I had service in the Reserves before I joined the Regular Force, does any of this count towards my RRSP contribution?

Will I be paid twice a month while on retirement leave?

Yes, retirement leave is processed bi-monthly, on the Friday closest to every 15th and 30th of the month. If for example, your release date were the 3rd of the month, you would receive the three days of pay for that month on the next banking date, which would be on the 15th of the same month.

When will my Record of Employment (ROE) be issued?

The ROE is normally issued within 30 days after your final release date.

Why have I not yet received pay on the last payroll?

Banking is processed two weeks in advance. Depending on when we receive your Release Digest from the releasing unit, you may have been missed on the banking date of the 15th or 30th of the month. You may however, request an advance of 30 days pay from your releasing unit if you are going on retirement leave.

When and how should I expect my leave cash-out and/or Special Leave on Retirement (SLOR) to be paid?

SLOR and leave leave cash-out are paid upon receipt of your RTNM Message from Director Military Careers Administration (DMCA) 3-2-2-3, normally about the same time as Severance pay is paid, approximately 3 to 6 weeks. It will be paid to you in accordance with the instructions chosen by you in the "Pay and Allowance" section of your Release Digest, or if this is not indicated, to your home address.

Can I transfer my SLOR and leave cashout directly into a Registered Retirement Savings Plan (RRSP) account without withholding income tax at source?

Normally, SLOR and leave cashout payments cannot be transferred directly to an RRSP account. However, if the member provides a Letter of Authorization from Canada Revenue Agency (CRA) authorizing the release of any or all of these funds without withholding income tax at source, we will make payment, not taxing the authorized amount, directly to the member himself. It would then be the member's responsibility to transfer those funds to his RRSP plan.

If I have a letter of authorization for reduction of income tax deduction from Canada Revenue Agency (CRA) for my cash-out leave, when can I expect to be reimbursed the tax portion?

If the CRA authorization letter is received with your Release Digest the tax will be reimbursed with your cash-out of leave. If however, it is received afterwards, the tax will be reimbursed to you on the next payroll, in the form of a cheque sent to your home address.

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When will I receive my Severance Pay?

Severance pay is normally paid 5 to 7 weeks after your final release date, which is defined as the last day of pay if you are on Retirement Leave.

How is Severance Pay calculated?

Severance pay is payable based on the member's item of release in accordance with CBI 204.40 and shall be calculated using the following formula: Seven days pay, at the rate pay applicable on the date of release, for each full year of continuous full-time paid service, not exceeding 30 years (for a maximum of 210 days severance pay).

Can I transfer my Severance Pay directly to a Registered Retirement Savings Plan (RRSP) account without withholding income tax at source?

Yes, Severance Pay can be transferred directly into an RRSP account upon request by the member. It should be noted that there are limits to how much can be transferred into the RRSP. For an pensioner, he/she may transfer $2,000.00 for each year of service, up to 31 December 1995, only. For members not entitled to an pension upon their release from the Forces, the maximum amount is $3,500.00 for each year of service, up to 31 December 1988, and $2,000.00 for each year thereafter, up to 31 December 1995. Only upon receipt of a Letter of Authorization from CRA, authorizing the release of additional funds without withholding income tax at source, can additional amounts, above and beyond this calculation, be transferred to your RRSP account.

Can I obtain a Division of Severance pay calculation, i.e.: period of marriage.?

No, DND does not do these notional calculations and is under no liability to do so. DND will calculate and pay severance pay if the member becomes entitled to it and only at the time of release. Effectively, as at the date of separation, the member has no entitlement to severance pay. Entitlement only arises on the release of a member of the Regular Force who obtains certain release items, as set out in the CBI 204.40 and QR&O chapter 15.

Can I transfer my Severance pay to a "spousal RRSP"

In ref to the question of Severance pay and the transfer to a "Spousal RRSP'', it is not DPS' position to instruct members on these anticipated decisions in reference to a Retiring Allowance and it's financial displacement. Canada Revenue Agency (CRA) has stated that it is not the Employers position to advise the member on CRA taxation laws as this becomes a conflict of interest in the eyes of CRA. If you wish to look into this option, you should seek the advice of a financial advisor or contact CRA directly and quote law 60j1 (2K/year rule) and paragraph 146 (5.1) of the law on "Spousal or Common Law Partner RRSP".

It is stressed that the determination of spousal RRSP contributions rest solely with CRA, and members should contact their district taxation office to obtain a taxation letter and the best possible advice on RRSP advantages available under current regulations. Appeals against RRSP contribution assessments, which is the right of any taxpayer, can be made to these district offices, the Tax Review Board and to the Exchequer Court of Canada.

A 60(j) Direct transfer of eligible retiring allowance is optional, not required.

Should you elect to utilize the 60(j) provision, you are not required to transfer the full amount identified as the Eligible amount. You may choose to transfer a portion (up to and including all) of the Eligible Amount. Any transfer under the 60(j) provision of the Tax act, must be transferred only to the member's RRSP.

If the amount is sent as an eligible transfer under provision 60(j) to a Spousal RRSP, the financial institution is required to reject the transfer.

Spousal RRSP will reduce the personnel exemption and will be identified as non eligible on the T4A. 60(j) (Direct transfers (2K/year rule does not apply). Spousal RRSP must be clearly annotated on the release digest and TD2 to take advantage of this option and obtain a taxation letter for spousal RRSP contributions.

Why is the closing balance on my last pay statement not equal to the final payment on release issued by DPS 6?

Given that the pay statement is generated 2 weeks in advance, the amount shown as a closing balance may not reflect all pay transactions that occur in processing your release.

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Who should I contact if I have not received a T4 for my pay?

T4's for salary received as a service member are issued by CF Military Pay in the year immediately following the actual year in which the pay was received. If you do not receive your T4 by the end of February, and you are still a serving member (not in the process of release) you should contact your Unit Accounting Officer who will correspond with CF Military Pay directly. If you are on retirement leave or have retired in the last year, you should call our toll-free number 1-800-267-0325 and follow the prompted options.

Who should I contact if I have not received a T4A for Severance Pay or pension?

T4A's for Severance Pay and pension are issued to retired members, by Public Works Government Services Canada (PWGSC). Their toll-free number is 1-800-267-0350.

Is it normal to receive one or more T4's as well as a Relevé 1 Form?

A Relevé1 Form is issued to members employed in the Province of Quebec only, whereas the T4 Form is issued to all other members. Should a member be employed in Quebec for one part of one calendar year and elsewhere for the remainder he/she will be issued both a T4 and Relevé1 Form. It should be noted that when a member commences retirement leave, his/her pay account and administration records are sent to Ottawa for tax purposes. He/she is then deemed to be employed in the province of Ontario for the purpose of deducting tax, and accordingly, a T4 Form would be issued. This may result in the issuance of two T4 Forms. The province of employment can be found in Box 10 of the T4 Form.

What amounts are included in the amount reflected in Box 14 of the T4 Form (Employment Income)?

The amount reflected in Box 14 is the total of pay and taxable allowances from the 1 January to date of release. For example, Box 14 of the T4 for a member released on 15 August 2001 (after all Annual/Accumulated Leave has been taken) would include all of the monthly pay, any retroactive pay increases paid in that year, plus all taxable allowances, (i.e.: sea duty, any reimbursement of academic training paid, air crew or field operation allowances), payable from 1 January to 15 August 2001. If more than one T4 is issued, the total gross income would be the total of all Box 14's of the T4's.

How do I get reimbursed for any education upgrading/academic training I have received during the past year?

You must contact the Base Personnel Service Officer at the unit closest to you whereby an Academic Training Claim will be raised for you. Note that the maximum amount a member can be claim for reimbursement is $5,000.00.

I recently received a DND cheque in the mail but I've been released for quite some time. What does this cheque represent?

Occasionally, Canadian Forces pay is subject to retroactive pay increases or adjustments. These payments, in the form of a cheque, are sent to the member's last known home address. Information concerning any pay increases or adjustments are posted to the Internet Website:http://www.forces.gc.ca

What documentation is required of me upon termination of my Class "C" service, in order to receive any pay account balance?

DCFPS requires a completed Class "C" Release Digest and a Record of Employment which is to be forwarded by your Unit. This documentation will confirm the termination date of your contract, and provide us with the information necessary to pay the pay account balance. A T4 Form will be sent to the home address provided on release.

I had service in the Reserves before I joined the Regular Force, does any of this count towards my RRSP contribution?

Yes, you need to provide the Release Section with a copy of any documentation showing your previous service. This "time" can enable additional Severance Pay funds to be directly transferred into a RRSP.