From time to time the Board of Governors will issue guidance letters on matters which may be of concern to the members of the Fund 

Guidance Letter #2016-01

Issued March 01, 2016; amended and reissued December 05, 2024

Subject:  Reporting of ministers’ post-retirement stipend to the Canada Revenue Agency

To:  Members of the Retirement Assistance Fund of the Canadian Reformed Churches

We have been requested by one of the Fund’s members to provide some general guidance to the members of the Fund concerning how they classify the remuneration paid to emeritus ministers and, more particularly, how this remuneration ought to be reported to the Canada Revenue Agency (“CRA”) on an annual basis.

In general, when a minister retires from his office as an active minister the church that he last served provides him with a stipend.  While a retired minister may still occasionally deliver sermons or perhaps teach catechism classes, he is usually paid separately for those services and form T4A would typically be used to report that income.

Based on recent interactions with a CRA representative, it is concluded that the retirement stipend, including any housing allowance being paid, would be considered a 'retiring allowance'.

The retiring allowance would be reported to CRA on form T4.  At the bottom of the T4 form are a series of empty boxes which are labelled "Other information".  In the 'Box' square you would enter the number 66 and the amount of the allowance would be entered in the 'Amount' box next to it.  The income tax deducted from the retiree's remuneration would be entered in box 22 near the top of the form.  No CPP or EI is applicable to a retiring allowance.

If the retired minister provides significant services to his church that he is not separately remunerated for then there may be a case for classifying the post-retirement income as earned income, which can be reported on form T4, but you are cautioned that you must have strong reasons for making this classification and you should be able to justify your position to CRA.  In no case should you adopt this classification without seeking competent professional advice.  You should also be aware that such earned income is subject to Canada Pension Plan and employment insurance premiums, depending on the age of the minister.

Prepared by:  S.P.C. Vander Molen, CPA, CA

Contact:  vandermolen79@telus.net

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Guidance letters are issued in order to bring attention to matters that may be of general interest to the members of the Fund.  They deal with a potentially complex issue in a concise manner.  It is recommended that appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in these letters, no individual or organization involved in either the preparation or distribution of these letters accepts any liability for their contents or for any consequences arising from their use.