The federal government has reduced the amount it pays to disabled veterans by about $18-billion by 2023 as a result of abandoning the old regime of lifetime pensions, says a new report by the Parliamentary Budget Officer.
And although the benefits will increase slightly for most disabled vets under a new Pensions For Life program that starts in April, some of the most severely wounded ex-military members will lose hundreds of thousands of dollars over their lifetimes as a result of the planned changes, the analysis says.
Veterans have been saying for years that those who applied for benefits after the New Veterans Charter, which is now called the Veterans Well-being Act, became law in 2006 were receiving less than those who applied before then when the old Pension Act was in place.
And the report released Thursday by the Parliamentary Budget Officer (PBO) agrees.
Had the Pension Act remained in place, the PBO says the government would have spent $50-billion for the total lifetime costs for veterans between 2016 and 2023. That’s about 74 per cent more than what it would have spent had the Veterans Well-being Act remained in place, and 56 per cent more than what it will spend with the introduction of the new Pensions For Life.
The PBO says the Pensions For Life is “slightly more generous” than the Veterans Well-being Act and most veterans will be financially better off when the changes announced in late 2017 by the Liberal government take effect.
That is especially true for vets who leave the military at a young age because the lifetime pensions will pay more, over the veteran’s lifetime, than they would have obtained with the lump-sum payments offered under the Veterans Well-being Act.
The average veteran, who retires with a moderate disability at the age of 54, will make about $2,000 more if they live another 28 years under the lifetime pensions than they would have if they had taken a lump-sum payment.
But, in about 5 per cent of cases, veterans will be worse off under the Pensions For Life, says the PBO. And in 3 per cent of cases, severely disabled vets will lose hundreds of thousands of dollars over their lifetimes as a result of the new regime.
Six severely disabled Afghanistan veterans, who were compensated under the Veterans Well-being Act, took the government to court arguing that they were disadvantaged financially compared with vets who applied for benefits under the Pension Act.