Mike W. Bryant
Northern News Services

Yellowknife (July 17/02) - Apparently, it's better to take money in smaller rather than larger lumps.

As a consequence, the recently announced pay equity settlement by the territorial government will be a whole lot smaller once the federal government takes its share.

Last month, Finance Minister Joe Handley announced that $27 million -- on top of the $23 million already paid out three years ago -- will go to female government employees past and present who received lower wages than men with similar skill and qualifications. At the time, Handley said the settlement will be good for Northern taxpayers, but because the payout is considered income, it is all taxable, mostly for federal income tax.

"On average, (taxes for) lump sum payments are about 30 per cent," said the GNWT's director of labour relations and compensation, Sylvia Haener. "A very small part of it goes to (NWT)payroll tax, the rest goes to the feds."

The average amount taken off a person's paycheque for taxes is around 22 per cent for federal income tax and one per cent for NWT payroll tax. But the settlement will be issued in lump sum payments so the number will climb to a combined 30 per cent.

"Unfortunately that's the way the tax rolls work," said Haener. "But we're putting together information sheets for the individuals who will get payments outlining what they can do by way of RRSP contributions to minimize the tax impact."

The Union of Northern Workers public relations officer Barbara Wyness said most of the workers affected, including court reporters, clerical workers and interpreters, for example, will remain in a lower tax bracket despite the payments.

"They never made a heck of a big wage so the amount they're going to get is not going to be that big," said Wyness. "The other thing too, there's a disproportionate number of people in these jobs who happen to be single parents. So that would put a lot of them at an income where they're not going to be pushed into enormous income tax classifications."