From google:
All income you receive is taxable unless it is expressly exempted. Such exemptions include worker’s compensation payments and certain compensatory damages awarded through litigation. However, short-term disability payments received under an insurance policy are not exempt, though you may not be liable for additional taxes on such payments if you have already borne the cost of taxation through the structure of the plan.
Q.1 Why you are asking this question now, you should have resolve it before the EOI
Q.2 Did you talk to your tax accountant? If not, talk with someone