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OPINION: Feds betraying commitment to veteran community

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OPINION: Feds betraying commitment to veteran community - By BRIAN N. FORBES - OCT. 25, 2018

The disabled veteran community expected the re-establishment of the Pension for life option would not just attempt to address the concerns of a small minority of disabled veterans, but would include a recognition of all disabled veterans in need of financial security.

In late August, the Supreme Court dismissed the Equitas class-action lawsuit, closing the door on the legal claim initiated against Ottawa on behalf of Canada’s disabled veterans’ community.

Members of the Equitas veterans’ society, led by determined and courageous advocates, were essentially seeking a court order that would compel Veterans Affairs Canada (VAC) to address the financial disparity between disability benefits awarded under the old Pension Act and those benefits granted under the New Veterans Charter, now known as the Veterans Well-being Act.

Notwithstanding the court’s decision, the battle continues and is now being waged in the political arena.

The National Council of Veteran Associations (NCVA) contends that the “lifelong pension” legislation doesn’t live up to the Liberals’ 2015 campaign promise to address the inequities in the new charter.

Amid the backdrop of the Equitas lawsuit, during the 2015 election campaign, the prime minister pledged to Canada’s veterans that, should his party win, the lawsuit would be unnecessary, as his government would re-establish lifelong pensions as an option to the lump-sum disability award.

Many understood that this commitment would specifically address the basic discrimination that exists between the Pension Act and the Veterans Well-being Act’s disability benefits. From the outset, the disparity in benefits has been at the crux of the claim.

Its new legislation continues to ignore the elephant in the room: the government has not ensured that a comparable level of financial security is provided to all disabled veterans and their families over their lifetimes.

In particular, the statutory and regulatory amendments ostensibly reflect the government’s attempt to create a form of “pension for life,” which includes the following three elements:

- A disabled veteran will have the option of receiving the present lump-sum disability award in the form of the new Pain and Suffering Compensation benefit. If eligible, and depending on the severity of the disability, the veteran can receive a monthly payment in the maximum amount of $1,150 per month, for life. For those vets who currently receive a disability award, a retroactive assessment would potentially apply and could mean a reduced monthly payment for life. In effect, VAC has simply converted the amount of the lump sum disability award into a form of a lifetime annuity as an option for those disabled veterans who are eligible.

- A new Additional Pain and Suffering Compensation benefit will essentially replace the Career Impact Allowance (Permanent Impairment Allowance), with similar grade levels and monthly payments, which reflect a non-taxable, non-economic benefit. But it would still be limited in its application to those veterans suffering a “permanent and severe impairment which is creating a barrier to re-establishment in life after service.”

- A new, consolidated Income Replacement Benefit that is taxable would combine four pre-existing benefits: Earnings Loss Benefit, Extended Earnings Loss Benefit, Supplementary Retirement Benefit, and Retirement Income Security Benefit. This benefit would be increased by one per cent every year until the veteran reaches what would have been 20 years of service or age 60. It also stipulates that any veteran who wishes to join the workforce may earn up to $20,000 before any reduction will be made to their benefit payment. It is not without financial significance that the current Career Impact Allowance and Career Impact Allowance Supplement have been eliminated from the Income Replacement Benefit package.

Although the devil remains in the details, when compared to the current charter, it is apparent that only a circumscribed number of seriously disabled veterans and their survivors may benefit from the new legislation. However, the greater majority of disabled veterans will not be materially better off. It is evident that the financial disparity between the Pension Act and the new legislation will be perpetuated for this significant cohort of disabled veterans.

Much more is required to improve the charter to satisfy the pressing concerns of the veterans’ community, if the government is to uphold the “one veteran-one standard” principle.

It is unacceptable that we continue to have veterans’ legislation that provides a significantly higher level of compensation to a veteran who is injured prior to 2006—the date the New Veterans Charter was enacted—when compared to a veteran who is injured post-2006. If applied to the Afghanistan conflict, this discrimination results in veterans of the same war having totally different pension benefits.

In the lead-up to Veteran Affairs Minister Seamus O’Regan’s announcement in 2017 outlining changes to the benefits, and in discussions following Budget 2017’s release, there was considerable concern in the veterans’ community that the government would establish an option wherein the lump-sum payment (disability award) would be apportioned or reworked over the life of the veteran in order to create a lifelong pension. NCVA and other veteran stakeholders, together with the ministerial policy advisory group, strongly criticized this proposition as being inadequate and not providing the lifetime financial security.

Stakeholders expected that some form of a substantive benefit stream would be established, which would address the financial disparity between benefits received under the Pension Act and the New Veterans Charter.

NCVA has long recommended that the department adopt the conclusions in the advisory group’s 2016 report, as well as the recommendations in the 2017 NCVA legislative program. Both reports proposed that combining the best provisions of the Pension Act and the New Veterans Charter would produce a form of lifetime pension that would secure the financial security for veterans in need.

If the “one veteran-one standard” philosophy that VAC advocates is to have any meaning, the government has to satisfy the financial needs of Canadian veterans and their dependants. But the new legislation misses the opportunity to recognize that the longstanding social covenant between Canadians and the veterans’ community demands nothing less.

Our past analysis, along with the appendices within, address the fundamental deficiencies in the department’s position and outlines a series of proposals.

As a first step to addressing the community’s concerns, the government should consider implementing this recommendation from the advisory group:

[T]he enhancement of the Earnings Loss Benefit/Career Impact Allowance as a single stream of income for life, the addition of Exceptional Incapacity Allowance, Attendance Allowance and a new monthly family benefit for life in accordance with the Pension Act will ensure all veterans receive the care and support they deserve when they need it and through their lifetime.

In specific terms, we would also suggest some steps that would go a long way to satisfying the “one veteran-one standard” approach.

Among our proposals is to liberalize the eligibility criteria for the new Additional Pain and Suffering Compensation (APSC) benefit so that more disabled veterans actually qualify. Only veterans suffering from a severe and permanent impairment will be eligible. That means the greater majority of disabled veterans will not qualify for this new component of the proposed lifelong pension.

These new regulations ostensibly replicate the eligibility prerequisites of the Permanent Impairment Allowance/Career Impact Allowance. Since their inception, these provisions have produced restrictive and arbitrary results. They were further complicated with the formula established by the department in 2017, in relation to the interpretation of the Career Impact Allowance grades, through the employment of the “diminished earnings capacity” test.

A more generous, readily understood approach is needed to cover a more inclusive class of disabled veterans. NCVA has long held that the traditional regulations on these benefits and policy guidelines reflected a “blunt instrument” as opposed to a “precise tool” in evaluating the overall impact that an injury may have on a disabled veteran.

In NCVA’s 2017 legislative program, we argued that the veterans’ disability award—the Pain and Suffering Compensation benefit—initially granted should be a major determinant in evaluating CIA (APSC) qualifications. The “diminished earnings capacity” test that VAC uses, and the new criteria set out for APSC qualification, represent a more restrictive approach to the evaluation for the disability award.

NCVA contends this employment of the disability award (PSC) percentage would produce a more straightforward solution to this issue of CIA (APSC) eligibility. The following would reflect this form of evaluation criteria for CIA (APSC):

Veteran Disability Award (PSC)              CIA (APSC) Grade

78% or over                                                    1

48% – 78%                                                      2

Alternatively, the DA (PSC) percentage could be applied in a more precise manner by using the percentile against the maximum CIA/APSC compensation available. For example, if a veteran is in receipt of a DA (PSC) of 65 per cent, the veteran would receive 65 per cent of the maximum CIA (APSC) allowance. For the purposes of Grade 3 assessment, we recommend that the DA (PSC) percentile could be similarly applied. For example, if a veteran is in receipt of a DA (PSC) of 25 per cent, the veteran would receive 25 per cent of the maximum CIA (APSC) allowance. This quantification of career impact has been used under the Pension Act for almost 100 years in assessing the loss of earning capacity of a disabled veteran for lifetime pension purposes.

Adopting this approach would enhance the Pension for Life by incorporating more disabled veterans and addressing disparities.

In reference to the regulatory amendments, the prerequisite for the APSC benefit with regard to the disability of amputation remains arbitrarily defined—both in terms of eligibility and in the designated grade level. For single-limb amputees, in order to qualify, amputations have to be at or above the knee, or at or above the elbow. Our years of experience with the War Amputations of Canada make clear that the loss of a limb at any level represents a “severe and permanent impairment” for the veteran amputee. The distinction is not justified and should be amended.

The government should also create a new family benefit to parallel the Pension Act provision in relation to spousal and child allowances to recognize the impact of the veteran’s disability on his or her family.

It should also incorporate the special allowances under the Pension Act, namely, the Exceptional Incapacity Allowance and Attendance Allowance, into the Veterans Well-being Act to help address the disparity between the two statutory regimes.

In my over 40 years of working with the War Amps, we’ve handled hundreds of special-allowance claims and were involved in formulating the Exceptional Incapacity Allowance (EIA)/Attendance Allowance (AA) guidelines and grade profiles. These represent a key part of the compensation available to war amputees and other seriously disabled veterans governed by the Pension Act.

The grade levels for these allowances tend to increase over the life of the veterans as the ravages of age are confronted. Indeed, non-pensioned conditions, such as the onset of a heart, cancer, or diabetic condition, for example, are part and parcel of the EIA/AA adjudication uniquely carried out under the Pension Act policies.

In a related note, it is interesting that Veterans Affairs refers to the new Caregiver Recognition Benefit of $1,000 a month as an indication of the government’s attempt to address the needs of families of disabled veterans.

What continues to mystify the veterans’ community is why the government has chosen to reinvent the wheel. For decades, the Attendance Allowance, which has five grade levels, has been effective at addressing caregiving needs. It provides a substantially higher level of compensation and more generous eligibility criteria.

The spouses or families of seriously disabled veterans often have to give up significant employment opportunities to fulfill the caregiving needs of the disabled veteran, and $1,000 a month is not sufficient recognition of this income loss. Veteran Affairs should return to the Attendance Allowance provision and pay such a benefit to the caregiver directly, if so desired.

We would strongly suggest that VAC pursue the incorporation of the EIA/AA special allowances into the new legislation before it goes into effect in April.


Another step the government can take is to establish a newly structured Career Impact Allowance that would reflect this standard of compensation: “What would the veteran have earned in his or her military career had the veteran not been injured?” This form of progressive income model, which has been recommended by the advisory group and the veterans ombudsman’s office would be unique to the Veterans Well-being Act. It would also bolster the potential lifetime compensation of a disabled veteran as to his or her projected lost-career earnings, as opposed to the nominal one per cent increase provided in the proposed legislation.

The following concerns are material to the evaluation of the calculation surrounding the new Income Replacement Benefit:

      - With reference to the one per cent increase in the IRB, this percentile augmentation ostensibly decreases in financial impact with the higher number of years of military service experienced by the disabled veteran and disappears completely for those veterans who have served for more than 20 years prior to suffering their injury or disability.

Additionally, with the elimination of the Career Impact Allowance supplements—a $12,000 per year allowance—new veteran applicants processed after April 1, 2019, will potentially be at a disadvantage due to the impact of this mathematical calculation, as for many veterans the one per cent increase in the Income Replacement Benefit will not make up for the loss of the Career Impact Allowance supplements.

      - The post-65 benefits of the IRB (current RISB) are substantially impacted by a multitude of financial offsets, which reduce the net amount of this benefit to the disabled veteran. Such financial offsets encompass any other income received by the veteran including CPP, OAS, CFSA benefits. In reviewing the VAC pension model used in the department’s public statements and the examples used in the 2018 budget papers, it appears that VAC has not factored in these offset elements in the overall analysis.
The department should consider the impact of these factors, relative to the new replacement benefit to ensure this one per cent increase, has a meaningful impact for those who require such income replacement for life. Ultimately, it should adopt the progressive income model for a newly structured form of Career Impact Allowance, in accordance with the approach used by the Canadian courts for “future loss of income.”

The disabled veterans’ community expected the re-establishment of a “pension for life” option would not just attempt to address the concerns of a small minority of disabled veterans, but would include a recognition of all disabled veterans in need of financial security.

The minister talks of the importance the government attaches to wellness, rehabilitation, and education programs under the new legislation. While we have commended the department for its efforts, financial security remains a fundamental necessity to the successful implementation of any wellness or rehabilitation strategy. This is not a choice between wellness and financial compensation, but a combined requirement to any optimal re-establishment approach to medically released veterans.

Ideally, we would like to believe that Veterans Affairs Canada, working with relevant ministerial advisory groups and other veteran stakeholders, could think outside the box by striving to create a comprehensive program that would treat all veterans with parallel disabilities in the same manner, thereby resulting in the elimination of artificial cut-off dates that arbitrarily distinguish veterans based on whether they were injured before or after 2006.

Adopting this objective would signal to the veterans’ community that VAC is prepared to take progressive steps to tackle legislative reform beyond what has been proposed.

Appendix A:

An apples-to-apples comparison suggests that a significant disparity will continue to exist in compensating seriously disabled veterans under the Pension Act and the Veterans Well-being Act when the new legislation takes effect in April 2019. The maximum amounts of compensation under each statutory regime will be as follows:


Pain and Suffering Compensation (per month or lump sum)          $1,150.00

Additional Pain and Suffering Compensation                                  $1,500.00 (limited to veterans suffering permanent and severe impairment)

Caregiver Allowance (per month)                                                  $1,000.00

Total (maximum per month)                                                        $3,650.00


- Veteran plus two children

Disability Pension (maximum per month)                                            $4,118.00

Note: Pension Compensation for family/dependants is not available under the New Veterans Charter

Exceptional Incapacity Allowance (maximum per month)                      $1,478.00

Attendance Allowance (maximum per month)                                      $1,848.00

Total  (maximum per month)                                                            $7,444.00

- Veteran plus spouse
Disability Pension (maximum per month)                                            $3,491.00

Note: Pension Compensation for family/dependants is not available under the New Veterans Charter

Exceptional Incapacity Allowance (maximum per month)                      $1,478.00

Attendance Allowance (maximum per month)                                      $1,848.00

Total  (maximum per month)                                                            $6,817.00

- Single veteran

Disability Pension (maximum per month)                              $2,792.00

Exceptional Incapacity Allowance (maximum per month)        $1,478.00

Attendance Allowance (maximum per month)                        $1,848.00

Total  (maximum per month)                                              $6,118.00

We commend Veterans Affairs for its efforts to improve the department’s wellness and educational policies. However, it should be noted, that a number of programs dealing with parallel income replacement and rehabilitation policies already exist under the Pension Act through the government’s SISIP long-term disability insurance policy and Vocational Rehabilitation (VOC-REHAB) programs.

Although, at the time of the enactment of the New Veterans Charter in 2006, Veterans Affairs committed to eliminating SISIP LTD and VOC-REHAB programs and creating a new gold standard in regard to these wellness programs, the reality is that the SISIP LTD and VOC-REHAB insurance policy has been and continues today to be the first responder for the greater majority of disabled veterans who have been medically released.

We would like to think that the minister could be convinced that, rather than choosing one statutory regime over another, the best parts of the Pension Act and the Veterans Well-being Act would provide a better compensation and wellness model for all disabled Canadian veterans.

Appendix B:

It is of even greater significance to recognize the effect of the Pension for Life policy, in accordance with the Veterans Well-being Act in effect on April 1, 2019, on those disabled veterans who might be considered moderately disabled as the disparity in financial compensation is even more dramatic.

Here is an illustration of a veteran with a 35 per cent disability assessment:

- Assume the veteran has a mental or physical injury deemed not to be a “severe and permanent impairment”—the expected eligibility reality for the greater majority of disabled veterans;
- The veteran enters the rehabilitation program with SISIP LTD as a first-responder or VAC;
-Ultimately, the veteran finds employment in the public or private sector and earns an income of at least 66-2/3 per cent of his or her former military wage.

Once such a veteran earns 66-2/3 per cent of his or her pre-release military income, the veteran is no longer eligible for the Income Replacement Benefit and, because the veteran’s disability does not equate to a “severe and permanent impairment,” the veteran does not qualify for the new Additional Pain and Suffering Compensation benefit.

In accordance with the minister’s announcement in Dec. 2017 on the government’s Pension for Life program, the veteran will receive the following Pain and Suffering Compensation benefit:

35 per cent of $1,150.00 ($402.50 monthly/$4,830 annually)

On the other hand, the Pension Act veteran at 35 per cent will receive as a disability pension:

35 per cent of $2,792, if single ($977.20 monthly/$11,726.40 annually)
35 per cent of $3,491, with spouse ($1221.85 monthly/$14,662.20 annually)
35 per cent of $4,118, with spouse and two children ($1,441.30 monthly/$17,295.60 annually)

This analysis demonstrates the significant financial disparity that results for this type of moderately disabled veteran. We expect that, as of April 1, 2019, more than 80 per cent of disabled veterans under the New Veterans Charter will fall into this category of compensation. Unfortunately, the perpetuation of these two distinct classes of veteran pensioner appears evident and remains unacceptable to the overall veterans’ community.

Brian N. Forbes is the chair of the National Council of Veteran Associations and the executive chair of the War Amps.

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