Canada's most severely disabled recent veterans will gain financial stability for life under a proposed federal plan. However, many injured vets will see only modest gains, if any, and those hoping for parity with the amounts offered under the old Pension Act will likely be disappointed.
The "pensions for life" that were unveiled by the Liberal government on Wednesday include a tax-free monthly pension payment, and a top-up, for pain and suffering.
The government is also amalgamating six pre-existing benefits for veterans whose service-related health problems make it difficult for them to find work into one taxable income-replacement benefit.
The combination of the pain and suffering benefits and the income replacement means the veteran who is 100-per-cent disabled – someone described as having multiple amputations plus post-traumatic stress disorder – will receive more than he or she would have under the old Pension Act.
And they will get much more than what was offered under the New Veterans Charter, which replaced the Pension Act in 2006.
But Veterans Affairs officials say 80 per cent of veterans accessing benefits are assessed as being 30-per-cent disabled or less.
Veterans Affairs Minister Seamus O'Regan said no one will lose money under the new plan.
But those whose service-related injuries are not considered severe will make less than they would have under the Pension Act. A lawsuit launched by six disabled Afghanistan veterans in 2012 demands parity with the veterans who retired when the act was in effect.
Aaron Bedard, one of the vets who is part of that suit, said of the new plan: "This announcement lacks so much detail that it has created chaos amongst veterans on social media."
Mr. O'Regan conceded his government "will not make everybody happy with this" but it is a good and fair option for veterans. "We wanted to make the most of this program," he said, "and we pushed this as far as we could."
Under the New Veterans Charter, disabled veterans could receive a lump-sum payment of up to $360,000 – an amount that is rarely awarded – depending upon the severity of their injury, plus a myriad of other benefits that target specific issues.
Under the new plan, those who retire with a service-related injury will qualify for a life-time tax-free pension for pain and suffering of as much as $1,150 per month. In addition, if they are having difficulty re-establishing their lives because of a severe and permanent injury, they may receive an additional $500, $1,000, or $1,500 a month, depending on the extent of their impairment.
Both of those benefits can be taken as a lump-sum award to a maximum of $360,000. But, if a veteran is severely disabled at a young age and lives into their 80s, the accumulated monthly payments will far outstrip the lump sum.
"We very much want people to take up the monthly option," Mr. O'Regan said. "We wanted to make it lucrative enough that they would want to."
Those veterans who have already received a lump-sum award still qualify for the life-time pension, but the money they have been given will be deducted when the government calculates their monthly payment.
In addition to the pension, four existing benefits – the Earnings Loss Benefit, the Extended Earnings Loss Benefit, the Supplementary Retirement Benefit and the Retirement Income Security Benefit – will be replaced with an Income Replacement Benefit that pays 90 per cent of the prerelease salary of a veteran who is so disabled they cannot work.
And two other benefits – the career Impact Allowance and the career Impact Allowance Supplement – will be replaced by an annual increase of one per cent of the Income Replacement Benefit for those veterans whose career progression has been cut short.
The government will allow vets to make as much as $20,000 before the Income Replacement Benefit is clawed back dollar for dollar.
All of the changes would take effect on April 1, 2019 because they must be approved in legislation and it will take time to put them in place.
"I don't think it is fair to make veterans wait any more time than they have to, to be honest with you," said Mr. O'Regan when asked about the delay. "All I can do is look them in the eye and say we are doing our level best."
A veteran who is 100-per-cent disabled at the age of 25, with a prerelease salary of $60,168 would stand to make $3.758-million over the course of an average lifetime under the new life-time pension and the Income Replacement Benefit.
But veterans who are moderately disabled will receive only a prorated portion of the maximum lifetime pension of $1,150 per month. Under the Pension Act, their pension would have been calculated as a percentage of as much as $2773.47 per month.
"So the vast majority of veterans lose in this case" compared with what the Pension Act offered, said veterans advocate Sean Bruyea. And despite the government's efforts to streamline the benefit, Mr. Bruyea said the complicated new system "is going to create a nightmare of anxiety for veterans, for family members."