Pension for Life
Financial security supports overall well-being. Pension for Life for Veterans improves how Veterans can receive key financial benefits.
Pension for Life at a Glance
The Government of Canada is modernizing the financial package that Veterans receive in compensation for their service-related pain and suffering: Pension for Life. These changes are part of an overall well-being package that combines financial recognition of pain and suffering, income replacement, and a host of wellness services and programs to help Veterans successfully transition to life after service. The Pension for Life is separate from the Canadian Armed Forces pension that Veterans receive for their service.
Recognition of Pain and Suffering
Serving members and Veterans who experience service-related injury and/or illness carry that pain and suffering with them throughout their lives. These new benefits are intended to recognize–via monthly payments, for life–this burden that is a direct result of serving our country.
Expected April 1, 2019
Pain and Suffering Compensation
Expected April 1, 2019
Additional Pain and Suffering Compensation
If you have already received a Disability Award
Veterans in rehabilitation–be it physical, vocational or psycho-social–deserve to be able to concentrate on their recovery. That's where the new benefit comes in, delivering 90 percent of your military salary at release. Whether you need it in the short term, or for the rest of your life, the Income Replacement Benefit will be there.
Expected April 1, 2019
Income Replacement Benefit
Well-being is a holistic construct. All seven aspects–employment, finance, health, education, social integration, housing and community–are inter-dependent. Today, VAC offers a variety of services and programs that support well-being with these eight new offerings, announced in Budget 2017.
Effective April 1, 2018
Career Transition Services Program
Effective April 1, 2018
Caregiver Recognition Benefit
Effective April 1, 2018
Centre of Excellence on PTSD and related mental health conditions
Effective April 1, 2018
Veterans' Education and Training Benefit
Effective April 1, 2018
Unlimited Vocational Rehabilitation
Effective April 1, 2018
Expanded Access to Military Family Resource Centres
Effective April 1, 2018
Veteran Emergency Fund
Effective April 1, 2018
Veteran and Family Well-Being Fund
Recognition benefits, income replacement benefits and well-being programs work together to support Veterans and their families in life after service. Read these stories to learn how.
Served In Regular ForcesCanadian Army 25 years old 5 years of service
Health SummaryDisability Assessment: 100% Amputations above elbow and above knee Post-Traumatic Stress Disorder
Key BenefitsPain and Suffering Compensation (non-taxable) Additional Pain and Suffering Compensation (non-taxable) Income Replacement Benefit (taxable)
Served in Regular ForcesCanadian Army 50 years old 25 years of service
Health SummaryDisability Assessment: 100% Amputation of both legs above the knee
Key BenefitsPain and Suffering Compensation (non-taxable) Additional Pain and Suffering Compensation (non-taxable) Income Replacement Benefit (taxable)
Served in Regular ForcesCanadian Army 55 years old 25 years of service
Health SummaryDisability Assessment: 20% Injuries not severe
Key BenefitsPain and Suffering Compensation (non-taxable) Education and Training Benefit (taxable) Career Transition Services
Served in Regular ForcesRoyal Canadian Air Force 25 years old 5 years of service
Health SummaryDisability Assessment: 25% Internal Derangement of the knee: 10% Hearing Loss: 10% Tinnitus: 5%
Key BenefitsPain and Suffering Compensation (non-taxable) Case management services Treatment benefits
Served in Regular ForcesRoyal Canadian Air Force 30 years old 12 years of service
Health SummaryDisability Assessment: 60% Multiple conditions
Key BenefitsPain and Suffering Compensation (non-taxable) Income Replacement Benefit (taxable) Treatment benefits
Served in Regular ForcesRoyal Canadian Navy 30 years old 12 years of service
Health SummaryDisability Assessment: 40% Nerve damage to right leg and loss of use
Key BenefitsPain and Suffering Compensation (non-taxable) Income Replacement Benefit (taxable) Career Transition Services
These Veteran Stories illustrate what a Veteran would receive if the programs started now in 2017. It will change a bit by 2019 (inflation and tax rates will change as they do every year) but the benefits won't change. So the net amount (a.k.a. "take home pay") will be similar to this.
The Evolution of Service
The needs of Canada's Veterans have changed significantly since the Pension Act came into being in 1919. Learn why and how the Government of Canada's services and programs have evolved to meet the needs of Veterans today.
When the call came to join the fight in the First World War, more than 650,000 Canadians enlisted between 1914 and 1918. More than 66,000 never returned home. To help those who did, the Canadian government established the Pension Act in 1919. The Act was intended to recognize the country's commitment to its returning soldiers and Veterans, and to guide delivery of compensation to those who had been injured serving their country.
Notably–and not surprisingly given the lack of understanding about mental health at the time–the focus of the Pension Act was primarily on the physical elements of injury and illness. It did little to support Veterans' transition into post-service life. Soldiers were expected to come home and resume their lives - many resumed to work in their previous jobs or professions. Today, we know that many of those who came home after the horrors of trench warfare struggled to adjust to post-service life.
Then came the Second World War. This time, more than one million Canadians enlisted between 1939 and 1945. Over 45,000 of them lost their lives. Those returning home would need help to reintegrate into the Canadian workforce.
Learning from the experience of the First World War, the government created the Department of Veterans Affairs in 1944 to administer the many needs of those who would return home. The government also established the Veterans Charter to give Veterans and their families a stable financial foundation on which to live, and to help support their transition back into the workforce. After all, most of those who returned would not remain professional soldiers. Overall, this reintegration was seen as a success for Canada.
Between 1950 and 1953, Canada sent troops to fight in the Korean War. Approximately 26,000 Canadians participated, and 516 lost their lives in service. Those who returned to Canada and released from the military were also served by the Department of Veterans Affairs.
After the Korean War and during the extended period of the Cold War, members of the Canadian military engaged in different missions around the world in support of NATO operations and United Nations peacekeeping objectives. These soldiers, sailors and airmen and airwomen-and those who came after them-became known as Canadian Armed Forces (CAF) members.
The overall trend was that fewer members of the Canadian military were involved in active fighting, resulting in fewer deaths and injuries. From a public perception standpoint, unless civilians were members of military families, most people still thought of Veterans as those who had fought in the world wars or Korea.
In the 1960s, the Department of Veterans Affairs began to evolve its services to meet the demands of an aging Veteran population that had far less need for rehabilitation and reintegration services. Rather, there was a greater need to provide benefits and financial security via pensions for those with disabilities, as well as support for long-term care and aging-in-place. However, this shift in emphasis meant that the needs of younger Veterans from Cold War and peacekeeping operations were not always met.
Beginning in the 1990s, the Department of National Defence (DND) faced two conflicting developments. The military faced deep budget cuts. But Canada was also participating in a greater number of highly complex international operations, such as those in Cyprus, the Persian Gulf, Somalia, Rwanda, the former Yugoslavia, Haiti and eventually the war in Afghanistan. These operations took a significant toll on those involved. Members were asked to do more, in tougher circumstances, and with fewer resources. This challenged the military to attract new members and keep existing ones. Furthermore, research showed there was a direct link between the lack of support for Veterans entering post-service life and the recruitment and retention problems.
In studying the problem, it became clear to the government that the needs of modern-day CAF Veterans and their families were not being well-served by the system of the day.
For instance, unless he or she was overwhelmingly disabled, the monthly payment received by a Veteran who was ill or injured was not enough on which to live. Nor was it intended to be. This is because VAC provided disability compensation–money intended to compensate a Veteran for the injury or illness that they had experienced in the line of duty–as well as benefits and treatments to help with the disability. There was no real distinction between compensation for loss of income and compensation for pain and suffering. Additionally, there were no longer sufficient services in place to help Veterans with their rehabilitation, or to help them successfully adjust to life post-service.
The focus was on disability when it should have focused on overall well-being.
In Budget 2016 and Budget 2017, the Government invested more than $6 billion dollars into the services and benefits administered by VAC, including an increase to the Disability Award up to a maximum of $360,000 (from $314,723). This renewed investment provided an opportunity for the Department to make further improvements to the NVC in an effort to 'right the wrongs' to the greatest extent possible, while further structuring benefits and services to be in line with the new well-being model. Added benefits, such as up to $80,000 for education for all eligible Veterans, i.e., not tied to illness or injury, and more help for caregivers of Veterans who are ill or injured further support this approach.
As we approach the end of 2017, there remain two fundamental pieces that need to be addressed. First, finalizing the three pillars of financial support received by Veterans who are living with an injury or illness, and making it as clear and straightforward as possible. And second, addressing in a meaningful and effective way the real challenges to service delivery excellence that have resulted from years of layering complex changes upon complex changes.
Chief Warrant Officer (Retired)
37 Years of Service
I will never be a civilian,
but I'll always be a citizen.
The Seven Domains of Wellbeing Fact Sheet
Employment or other meaningful activity
Where a Veteran is engaged in a new job, finds enjoyment through volunteering, spends time with family and/or is in retirement. This helps a Veteran integrate into life after service with purpose.
New (Expected April 1, 2018):Career Transition Services Program
While money is extremely important, it is one element that contributes to well-being. When a Veteran has what's needed financially, it is possible to focus on all other areas of life, such as family, community and health.
Pension for Life (Expected April 1, 2019):Pain and Suffering Compensation Additional Pain and Suffering Compensation Income Replacement Benefit
Being healthy requires more than just functioning well physically. Good health is holistic and depends upon physical, mental, social and spiritual well-being. When healthy in every aspect, a Veteran can spend time on other areas of well-being, such as work, rehabilitation or community involvement.
New (Expected April 1, 2018):Centre of Excellence on PTSD and related Mental Health conditions
Life Skills and Preparedness
Every Veteran is unique. But what every Veteran shares is the experience that comes from the journey to life after service. It is important that each Veteran has access to support and service that help to adapt expertise and well manage post-service life.
New (Expected April 1, 2018):Veteran's Education and Training Benefit Unlimited Time for Vocational Rehabilitation
When anyone experiences a major life change, such as the journey to life after service, it is critical to maintain or develop mutually supportive and positive relationships. Integration into existing or new support networks is key.
New (Expected April 1, 2018):Expanded Access to the Military Family Resources Centres
Housing and Physical Environment
Where the Veteran has safe, comfortable and affordable accommodation, a place from which to build other elements of well-being. A secure address is important to secure new work, or to focus on health as well as family time.
New (Expected April 1, 2018):Veteran Emergency Fund
Cultural and Social Environment
A Veteran may not ever see himself or herself as a civilian. But a Veteran may always be a citizen. Following the journey to life after service, all Veterans deserve and need to be understood, valued and supported by the community.
New (Expected April 1, 2018):Veteran and Family Well-Being Fund
Questions and Answers
What is the proposed Pension for Life?
The proposed Pension for Life is a combination of benefits that provide recognition, income support and better overall stability to Canadian Armed Forces (CAF) members and Veterans who are living with a disability due to a service-related injury and/or illness.
Pension for Life will provide a holistic package that reintroduces lifelong monthly pain and suffering payments; implement a new recognition benefit, and consolidate six of seven existing income-related financial benefits.
The resulting Pension for Life benefits package includes: The Pain and Suffering Compensation, Additional Pain and Suffering Compensation, and the Income Replacement Benefit.
Pain and Suffering Compensation (PSC)
Recognizing service-related pain and suffering
This monthly, lifelong, tax-free payment recognizes pain and suffering experienced by Veterans and CAF members with a disability due to a service-related illness and/or injury. The choice between monthly and lump sum options give Veterans and members the flexibility to decide what works best for them and their families.
Additional Pain and Suffering Compensation (APSC)
Delivering further recognition for those with severe and permanent impairment
This monthly, tax-free payment is for Veterans experiencing barriers to re-establishing themselves after service because of their severe and permanent illness and/or injury.
Income Replacement Benefit (IRB)
Delivering income support when Veterans need it
The monthly, benefit is designed to provide income support to Veterans who are experiencing barriers to re-establishment primarily resulting from service. The benefit is available to Veterans, survivors and orphans, for life, should they need it.
Pension for Life addresses concerns raised by military and Veteran communities and families. It will empower CAF members and Veterans living with a disability, caused by a service-related illness or injury, to choose the form of compensation that works best for them and their families.
When will members and Veterans be able to apply for the Pension for Life benefits?
All three elements of the Pension for Life, including the Pain and Suffering Compensation, Income Replacement Benefit, and the Additional Pain and Suffering Compensation, are expected on April 1, 2019.
I thought Pension for Life would be available in 2018. Why do we have to wait until 2019?
There are two reasons. First, the Pension for Life changes need to be finalized through government legislation and that takes time.
Second, we need to ensure all Veterans Affairs Canada staff, systems and processes are properly in place to efficiently deliver the new Pension for Life benefits to the thousands of Veterans and their families who will feel the benefits of this change. Until the changed benefits come into effect, Veterans will continue to receive the current benefits and services for which they are eligible.
What will happen to the current disability benefits in April 2019?
The current Disability Award will no longer exist under the New Veterans Charter after April 2019. This does not include the Critical Injury Benefit, which will remain in place. If a Veteran already received a Disability Award, you may keep it.
I currently receive disability benefits under the New Veterans Charter. Should I apply for Pension for Life?
No. If a Veteran already receive disability benefits from Veterans Affairs Canada, they do not need to apply for the Pension for Life benefits. They will automatically receive an adjusted amount which will be explained by a VAC representative. The eligibility criteria for Pension for Life benefits (PSC, APSC and IRB) are similar to the current eligibility criteria used for disability benefits.
How will the monthly amount be calculated if I already received a Disability Award?
The monthly amount a Veteran may get if they already received a disability award takes a number of steps to calculate. If a Veteran is in this situation, how we calculate their monthly amount will be explained to them in the decision letter they will receive. The calculation considers:
The amount that you already received from VAC;
1) The amount already received from VAC;
2) The monthly amount that would have received so far (had a monthly payment option been available); and
3) A life annuity calculation, which takes into consideration individual circumstances to calculate any offsets to the monthly payment.
I am happy with my current benefits. Will I have the option of keeping my benefits as is?
For Veterans who have already received a Disability Award, a calculation will be done automatically to determine if any additional money should be paid to you on a monthly basis.
Any future disability benefit applications after March 31, 2019, will be for the PSC because it is replacing the current Disability Award.
Income Replacement Benefit: Veterans will receive comparable benefits and amounts that are no less–before offsets–to those that were eligible to receive before March 31, 2019. However, since we are consolidating and replacing most of the financial benefits as they currently exist, maintaining status quo is not possible. The names of the benefits and the structure of the payment may look different.
It is important to note that if a Veteran receives benefits under the Pension Act. These will not change as a result of this announcement.
What is the rationale and research behind this change?
These changes combine what Veterans have asked for with the most up-to-date research and understanding on Veteran well-being.
Veterans have asked for:
- More choice and lifelong financial recognition for pain and suffering related to a service-related illness or injury;
- One, easy-to-understand monthly benefit that provides short and long-term income support for themselves and their families;
- Financial compensation to account for the impact of having to re-establish in post-military life; and
- Recognition of the exceptional impacts and quality of life issues faced by those living with a service-related illness or injury.
VAC Researchers have conducted studies, and also reviewed extensive research from around the world to come to these conclusions on Veteran well-being.
Why are we not returning to disability pensions under the Pension Act?
Implemented in 1919, the Pension Act was designed to recognize and compensate for overall financial impacts–pain and suffering and income replacement–of a service-related illness or injury. While the pension rates were generous, there were limits depending on disability type.
With the exception of the most seriously disabled, the rates were insufficient to support Veterans who were struggling to re-establish into their post-service life. Additionally, the Pension Act did not offer rehabilitation, education or transitional support. Under that system, Veterans faced challenges successfully transitioning to life after service.
The Pension Act was more generous to Veterans. Why won't the Government return to these benefits?
Every Veteran's circumstance is personal and unique. The Pension Act did not provide needed support, such as well-being and rehabilitation programs, to a majority of Veterans prior to 2006. The Pension Act was designed after the First World War (1919) and did not consider individual circumstances or provide for a full range of rehabilitation and well-being programs that support Veterans and their families.
As a result of strong advocacy work by Veterans and Veterans organizations regarding Pension Act's limitations, the Government recognized the need for change to meet the evolving needs of the new generation of CAF members and Veterans. Consequently, a consensus emerged for real reform.
The comprehensive package of benefits and services–enhanced in Budgets 2016 and 2017– offer Veterans and their families the help they need to transition successfully from the military to life after service by focusing on their long-term well-being and mental health.
Are there additional amounts for survivors and dependent child(ren) after a Veteran dies?
Veterans need to know that the immediate family they leave behind will be financially looked-after in the event of a service-related death.
In the event of a Veteran's service-related death before age 65, the survivor and dependent children would receive the same Income Replacement Benefit amount as the Veteran would have until he or she reached age 65. Then the survivors and dependent children would receive 70% of the benefit to which the Veteran would have been entitled after age 65 (increased from 50% in Budget 2016). This would continue for life.
If a Veteran is receiving the PSC monthly benefit at the time of their death, and any residual amount is left over, it will be cashed out to survivors and dependent children.
Survivors and dependent children may also apply for a PSC that the Veteran could have applied for prior to their death, and they may receive a lump sum amount if approved.
Are there additional amounts for Veteran Dependants such a spouse or dependent child in the case of the death of a Veteran?
If a Veteran dies of a service-related death before age 65, the survivor and orphan would receive the same Income Replacement Benefit amount as the Veteran until the Veteran would have been 65 and then 70% of the benefit to which the Veteran would have been entitled to after age 65 for life.
If a Veteran dies of a non-service related death before age 65, the survivor and orphan would receive a lump-sum payment equal to 24 times the amount the Veteran received in the month he died with no offsets.
If the Veteran dies of a non-service-related death after age 65, the survivor and orphan would receive the Income Replacement benefit at the same rate as survivors and orphans of Veterans who die of a service related death.
How is Pension for Life different from what was previously available to Veterans living with an illness or injury?
Pension for Life is a holistic package that provides monthly recognition, monthly income support and overall stability to members and Veterans living with a disability caused by a service-related illness and/or injury. The benefits give Veterans a choice to meet their needs and circumstances in the short and long term, and is overall easier to understand.
The Income Replacement Benefit also address loss of career progression potential. They also offer additional recognition of severe and permanent impairments that create additional barriers to entering life after service.
The New Veterans Charter contains seven economic benefits, each with its own complex eligibility and application processes. The new Income Replacement Benefit replaces six of the seven benefits, making it easier for members and Veterans to apply for income support or go through the challenge of understanding the eligibility criteria.
Why would you make changes to ELB and CIA in Budget 2016 only to change everything a year later?
It was essential to address the most pressing issue, which was to raise the overall level of income for the most vulnerable Veterans. Budget 2016 increased the amount of financial benefits available to Veterans and made it easier for certain Veterans to access an increase to their CIA benefit.
Now we are reducing the complexity of having six different financial benefits, all with varying criteria and payment schemes by consolidating them into one. As well, we are creating payment flexibility in the Pension for Life benefits (PSC, APSC and IRB), and further recognizing that some Veterans experience additional barriers to re-establishment because of severe and permanent impairments.
Who did you consult?
Over the past two years, VAC has engaged Veterans and their families, Canadians, stakeholders, and experts in developing Pension for Life. These key audiences provided input and feedback during the VAC Stakeholder Summits in December 2015, May 2016, and October 2016, and at the Ministerial Advisory Group meetings.
Through these outreach efforts, we have learned that Veterans are focused on three key elements for a Pension for Life: ensuring that no Veteran under the NVC would receive less than a Veteran under the Pension Act for the same disability or incapacity; reducing the complexity of financial benefits; and needing choice for Veterans.
What is the Pain and Suffering Compensation?
The Pain and Suffering Compensation is designed to recognize and compensate CAF members and Veterans for the pain and suffering they experience due to a disability caused by a service-related illness and/or injury. It is not intended to replace income, which is why the PSC is not taxable.
Based on the member or Veteran's assessed extent of disability, the PSC benefit potentially entitles Veterans up to a maximum of $1,150 a month for life. Veterans and members can also opt to cash out their payments at any time. The intent is to provide the choice of how to receive this benefit, while encouraging recipients to continue the monthly payment.
How many people will benefit from the Pain and Suffering Compensation benefit?
On April 1, 2019, an estimated 74,300 Veterans previously in receipt of the lump sum Disability Award will transition to the additional monthly amount; approximately 60% of these Veterans are expected to receive an additional monthly amount based on the new PSC monthly benefit rates. As of March 31, 2023, an estimated 97,300 Veterans will have received lump sum or monthly compensation from Veterans Affairs.
What will the eligibility criteria be for the Pain and Suffering Compensation?
The Pain and Suffering Compensation is available to members and Veterans of the Canadian Armed Forces (CAF) who have a disability caused by a service-related illness and/or injury. The actual amount of the PSC will be determined by a Veteran's Disability Assessment. It's important to remember that these monthly payments are based on the member or Veteran's extent of disability, and that not all Veterans who receive the PSC will receive the maximum of $1,150 per month.
How do I apply for this compensation?
Details about the application process will be available closer to the expected release date (April 1, 2019). As specifics get confirmed, we intend to share it.
We will also issue a notification via My VAC Account. Our goal is to inform as many members and Veterans as possible about the benefits and services available to them and their families.
What happens to the monthly Pain and Suffering Compensation payments if the Veteran passes away?
If a Veteran receiving the monthly Pain and Suffering Compensation dies before receiving the equivalent lump sum amount, the survivor and dependent children would receive the remaining balance as a lump sum.
What is the maximum monthly amount that a Veteran can receive?
The maximum amount will be $1,150 per month; the actual amount received depends on the extent of disability.
How was the maximum monthly amount of $1,150 determined?
The monthly amount was determined by converting the value of the maximum lump sum Disability Award of $360,000 into an age-adjusted monthly payment. For those most severely impaired Veterans, they may also receive the Additional Pain and Suffering Compensation, a monthly amount of tax-free compensation of up to $1500, for a combined maximum amount of $2,650 per month.
Veterans who are the mostly severely impaired with significant disability would typically be receiving many other benefits and supports including monthly income replacement and the entire suite of wellness programs.
If you choose the monthly payment option but want to take the money as a lump sum payment at a later date, are you able to?
Yes. You can choose to cash out the benefit and receive the balance owing, which is the difference between the monthly amount already paid and the applicable lump sum amount.
Why would someone want to choose the monthly option for the Pain and Suffering Compensation?
The monthly payment option provides compensation and stability on a long-term basis, especially for younger members and Veterans with service-related disabilities. Each Veteran can make a personal decision that best meets their individual needs.
VAC encourages Veterans to seek independent financial advice in order to determine the best option for them. Veterans Affairs Canada will pay up to $500 for Veterans to access financial counseling or advice services from a provider of their choice.
Does the monthly payment option work out to more money over a Veteran's lifetime than the lump sum option?
The monthly payment is for life, so it depends on whether a Veteran's life is longer or shorter than their predicted life expectancy.
If I want to take advantage of the monthly option, do I have to pay back the lump sum I was awarded to Veterans Affairs Canada?
No. In order to benefit from the introduction of the Pain and Suffering Compensation, VAC will provide Veterans who have already received the Disability Award since 2006, the opportunity to potentially receive a monthly amount.
The calculation considers:
- The amount that the Veteran already received from VAC;
- The monthly amount the Veteran would have received so far (had a monthly payment option been available); and
- A life annuity calculation, which takes into consideration individual circumstances to calculate any offsets to the monthly payment.
Why are age and sex considered?
There is no distinction made based on age or sex in any benefit under Pension for Life. However, the calculation used to convert lump sum amounts into monthly amounts must incorporate mortality rates which are sex dependent. Mortality rates take sex into consideration because life expectancy varies between men and women.
Where can I get financial advice to help me make a decision on which option (lump sum or monthly payment) to select?
There are many agencies that provide financial advice including banks, private companies and community-run groups. Veterans can make a choice based on their own preference.
Veterans Affairs Canada will pay up to $500 for Veterans to access financial counselling or advice services from a provider of their choice.
Are older Veterans disadvantaged by the creation of the new Pain and Suffering Compensation?
No. Veterans are able to choose if they would like to receive the Pain and Suffering Compensation as a monthly payment or lump sum, whichever option works best for them. To help with this choice, Veterans Affairs Canada will pay up to $500 for Veterans to access financial counselling or advice services from a provider of their choice.
Why is there a discrepancy between the Pain and Suffering Compensation and the Disability Pension amounts?
The Pension Act should not be compared to the Pain and Suffering Compensation alone. The Pension Act monthly payment should be compared to the Pain and Suffering Compensation + Income Replacement Benefit + wellness programs. The PSC alone is not meant to provide lifelong financial support.
The two benefits are very different, which makes it hard to compare. The disability pension provided for both economic and non-economic support to injured Veterans. However, in most cases it was insufficient financially, nor were there wellness programs to assist Veterans to re-establish into post-service life. Whereas, the Pain and Suffering Compensation is meant to recognize a Veteran's pain and suffering related to a disability caused by a service-related illness or injury only. The Income Replacement Benefit addresses the lost income experienced by a Veteran because of their illness or injury.
What is the Additional Pain and Suffering Compensation?
The Additional Pain and Suffering Compensation is intended to recognize and compensate Veterans for their barriers to establishing themselves in post-service life as a result of service-related permanent and severe impairment. It is not related to income, which is why it is not taxable.
What is the eligibility criteria of the Additional Pain and Suffering Compensation?
This benefit is payable to Veterans who have one or more disabilities caused by a service-related injury or illness that is:
- Creating a permanent and severe impairment; and
- Creating a barrier to re-establishment in civilian life; and
- For which the Veteran has received a Disability Pension, Disability Award or Pain and Suffering Compensation.
What is the monthly Additional Pain and Suffering Compensation based on?
The benefit recognizes that severe and permanent impairments may create barriers to establishing themselves in post-service life. The monthly amount payable is based on the extent of the Veteran's permanent and severe impairment. It takes into consideration such things as a Veterans' mobility, requirements for supervision and the need for assistance with activities of daily living (such as bathing and dressing).
It will be payable at three grade levels with $1500/month being the highest and $500/month the lowest.
What is the Income Replacement Benefit?
If a Veteran experiences health problem(s) that are resulting primarily from their service, seeks rehabilitation and needs income support during that rehabilitation, the Income Replacement Benefit will provide financial support to them during that specific period of time.
For those who have a permanent physical or mental health problem that results in a reduced earning capacity, the Income Replacement Benefit will continue after the completion of the rehabilitation plan and will reduce at age 65 to 70% of the pre-age 65 amount (less offsets).
Calculation of benefit: The benefit will be determined based on the higher of 90% of a Veteran's salary at release, indexed forward to current day, OR based on a minimum threshold ($48,600), indexed annually based on the Consumer Price Index. The minimum threshold is comparable to the middle-class tax bracket ($45,916 in 2017). The benefit will be offset by other income sources, such as benefits payable under the Canadian Forces Superannuation Act, colloquially known as the CAF military pension.
Long term and lost career progression: For those who have a permanent physical or mental health problem that results in a reduced earning capacity, their military salary at release will be adjusted annually by a career progression factor of 1% until the earlier of what would have been 20 years of service had they not released or age 60. So, a Veteran with 5 years of military service would be eligible to receive career progression for 15 years.
How many people will benefit from the Income Replacement Benefit?
On April 1, 2019 an estimated 17,800 clients previously in receipt of the Earnings Loss or RISB Programs will transition to Income Replacement Benefit (IRB). 15,800 of these clients are expected to continue to receive a protected amount under IRB as the sum of their Financial Benefits were greater than what they will be eligible for under the new IRB. As of March 31, 2023 an estimated 32,000 clients will be In-Pay for IRB (20,000 short-term and 12,000 long-term).
What is the eligibility criteria for the Income Replacement Benefit?
A Veteran may qualify if they are a Canadian Armed Forces (CAF) Veteran who has a barrier to re-establishment because of service-related physical or mental health problem(s), and they are taking part in VAC rehabilitation services.
A Veteran who is participating in VAC rehabilitation program will be evaluated to see if their permanent physical or mental health problem associated with their Income Replacement Benefit results in a permanent Diminished Earnings Capacity (DEC). If it turns out that the Veteran does have a DEC, then the IRB will be extended for the Veteran's lifetime or until the Veteran no longer has a DEC.
For those who have a have a permanent physical or mental health problem that results in a diminished earning capacity, the Income Replacement Benefit will be increased by 1% every year until the Veteran reaches what would have been 20 years of service or age 60. The benefit is also available to qualified survivors and dependent children after the death of the Veteran.
Why are we eliminating/consolidating six financial benefits?
This has been done to make things easier for Veterans.
Having Veterans and their families apply for six separate financial benefits related to income replacement was unnecessarily complex. That's why we have consolidated the six benefits into a single monthly payment–the Income Replacement Benefit (IRB).
How do I apply for this benefit?
Details regarding the application process will be available closer to the expected release date– April 1, 2019. We will also issue a notification via My VAC Account. We will ensure that Veterans and their families are provided with all of the information they will need to apply.
Will this improve processing and wait times?
VAC is always looking for opportunities to improve the service delivery experience for Veterans. We are continuously streamlining administration to make things easier for Veterans and their families. Veterans can expect their Income Replacement Benefit to be processed in about four weeks, which is the current service standard for the Earnings Loss Benefit, and which involves collecting and reviewing similar information.
Will my payments decrease as a result of consolidated benefits?
Veterans will receive comparable benefits and amounts that are no less–before offsets–to those they were eligible to receive before March 31, 2019. The names of the benefits and the structure of the payment may look different. Whether or not the benefits are taxable may also change.
For those who previously received a lump sum Disability Award, a calculation will be done automatically to determine if any additional money should be paid to a Veteran on a monthly basis. Any future disability benefit applications will be for the PSC because it is replacing the current Disability Award.
If I was eligible for one of the benefits being consolidated, am I automatically eligible for IRB? Will I need to be reassessed for the Income Replacement Benefit?
Yes. The monthly amount and length of time that a Veteran you will receive the IRB will depend on the financial benefits they were eligible for as of March 31, 2019. For example, if a Veteran was eligible for short-term Earnings Loss Benefit, they will be eligible for short-term IRB (not necessarily IRB for life) or if the Veteran was eligible for the Retirement Income Security Benefit, they will be eligible for IRB payments for Veterans age 65 or older.
To better serve Veterans, it is important for us to review and assess their needs while receiving the Income Replacement Benefit. There will be times when we need to review and assess a Veteran's rehabilitation needs, their ability to participate in their rehabilitation plan, their ability to earn an income and the amount of their income from other sources. Each of these may influence a Veteran's continued eligibility for the Income Replacement Benefit and the amount.
Why are Veterans (under the NVC) required to participate in VAC's Rehabilitation Program in order to be eligible for IRB?
The purpose of rehabilitation services is to support Veterans in improving their health to the fullest extent possible and adjust to life at home, in their community or at work.
Why are Veterans who medically release from the military due to non-service related injuries or illness no longer eligible for rehabilitation services? Do they not deserve the same level of care?
Veterans who medically release from the military are eligible for a separate insurance program through the Canadian Armed Forces (Canadian Armed Forces Long Term Disability Insurance).
Even if a service-related illness or injury manifests itself later in life, there is no time limit on when an ill and/or injured Veteran can seek VAC's rehabilitation services for barriers to re-establishment due to health problems that are primarily resulting from service.
What supports/options are available to medically released Veterans with disabilities that are caused by non-service related injuries and illnesses?
Veterans who medically release from the military are eligible for an insurance program through the Canadian Armed Forces (Canadian Armed Forces Long Term Disability Insurance). Medically released Veterans can also access vocational rehabilitation through this program. Veterans who medically release may be eligible for VAC support including the Career Transition Services, Education and Training Benefit, as well as access to the Public Service Health Care Plan.
Is there a transition period for this change?
Yes. These changes are expected on April 1, 2019. We will ensure that Veterans and their families are provided with all of the information they will need in advance of this date.
What financial support is available for Veterans who are mentally and physically able to work, but have not yet found employment or a source of income?
Veterans who are:
- Able to work;
- Participated in VAC Rehabilitation Program;
- Were eligible for the Earnings Loss Benefit or the Income Replacement Benefit; but are unable to find employment or are underemployed, may be eligible for the Canadian Forces Income Support (CFIS).
The Canadian Forces Income Support (CFIS) is a non-taxable, monthly income support that provides financial assistance to help meet basic needs such as food and shelter.
VAC's Education and Training Benefit and Career Transition Services programs would also be available to support Veterans who have not yet found employment or a source of income.
Will Veterans be able to earn any income without reducing the income received from other sources?
To encourage Veterans to engage in activities that are beneficial and meaningful to them, the Income Replacement Benefit will allow recipients to earn up to $20,000 per year from employment before the benefit is adjusted. Employment income in excess of $20,000 will be fully offset dollar for dollar from the IRB amount.
If a Veteran receives IRB and dies before age 65 due to a service-related injury or illness, what are survivors and orphans eligible for/entitled to?
Survivors of the members and Veterans who have died as a result of a service-related injury or illness are eligible to receive the IRB. The Veteran does not need to be in receipt of the IRB at the time of death. Survivors may receive the same amount of IRB before offsets the member or Veteran could have received prior to the member or Veteran's 65th birthday. The amount of the IRB before offsets is reduced when the member or Veteran would have reached the age of 65 to 70% of the member or Veteran's rate post age 65. Income amounts the survivor receives in respect of the Veteran are offset from the IRB amount.
Orphans' eligibility for the income replacement benefit will be the same as that for survivors described above. In cases where there is a survivor and orphans, the amount for which the survivor is eligible (before offsets) will be split in two equal shares, with half going to the survivor and half going to the orphan(s). In the absence of a survivor, the orphans will divide the full amount between themselves. There are no offsets to the amount of IRB for orphans.
If a Veteran receives IRB and dies before age 65 due to a non-service related injury or illness, what are survivors and orphans eligible/entitled to?
Survivors of Veterans who die before age 65 and are in receipt of IRB at the time of their death may be eligible to receive a lump sum amount equal to 24 months of the monthly amount of IRB before offsets the Veteran was eligible for at the time of death. No offsets are applied to the amount.
Orphans' eligibility for the Income Replacement Benefit will be the same as that for survivors described above. In cases where there is a survivor and orphans, the amount for which the survivor is eligible (before offsets) will be split in two equal shares, with half going to the survivor and half going to the orphan(s). In the absence of a survivor, the orphans will divide the full amount between themselves (no offsets).
If a Veteran receives IRB and dies after age 65 what are survivors and orphans eligible/entitled to?
If an IRB-receiving Veteran dies after age 65, their survivor may be eligible to receive 70% of the amount of IRB–before offsets–received by the Veteran at the time of death. Income amounts the survivor receives in respect of the Veteran are offset from the IRB amount.
Orphans' eligibility for the Income Replacement Benefit will be the same as that for survivors described above. In cases where there is a survivor and orphans, the amount for which the survivor is eligible (before offsets) will be split in two equal shares, with half going to the survivor and half going to the orphan(s). In the absence of a survivor, the orphans will divide the full amount between themselves. There are no offsets to the amount of IRB for orphans.
Why are Veterans able to earn up to $20,000 while receiving the Income Replacement Benefit?
To encourage Veterans to engage in activities that are beneficial and meaningful to them, the new benefit will allow recipients to earn up to $20,000 from employment per year before the benefit is adjusted rather than immediately reducing benefits, as is currently the case.
The yearly amount of $20,000 is being used as it is approximately the maximum amount an individual can earn before taxes are deducted in the most generous jurisdiction (Alberta).
Employment income in excess of $20,000 will be fully offset dollar for dollar from the IRB amount.
How did Veterans Affairs Canada determine the career progression factor of 1%?
For Veterans who have not yet served a full career in the military, the Income Replacement Benefit will be increased by 1% every year until the Veteran reaches what would have been 20 years of service or age 60. It does not represent the actual career progression an individual Veteran may have had in the military.
What will this cost?
The Pension for Life will cost $3.6 billion from 2017 to 2022 and $111.7 million per year ongoing.
Is there any new money associated with this announcement?
These changes would cost approximately $3.6 billion over 6 years and $111.7 Million per year ongoing.
Can you explain indexation?
Indexation ensures that the purchasing power of money remains the same after inflation. It also ensures that purchasing power remains the same over time. Simply put, as items like food become more expensive, indexation means we provide Veterans with more money to ensure they can keep buying these things.
What is wrong with the current financial benefits system for Veterans living with an injury or illness?
There are currently seven benefits, each with their own complex eligibility and compensation schemes. These benefits do not always reflect the intent of encouraging Veterans to re-establish and seek employment after a service-related injury or illness, despite his or her ability to do so.
What is the maximum monthly-amount a Veteran can receive with these changes?
The amount of the Income Replacement Benefit is based on a Veteran's military salary at release (adjusted annually), less offsets. As such, the amount varies depending upon each Veteran's individual circumstances.
The maximum Pain and Suffering Compensation would be $1,150 per month.
The maximum monthly Additional Pain and Suffering Compensation would be $1,500 per month.
Is this, in fact, a lump sum divided into monthly payments over the course of a Veteran's life?
No. The new PSC is designed to support ill and injured members and Veterans, and provide them with the ongoing monthly recognition for their service-related illness or injury. If taken as a monthly payment for life, there is no cap on the amount the Veteran can receive. This means that they can receive more than the lump sum cash out amount. It is not a lump sum amount spread out over the Veteran's life. For a younger Veteran, this could mean receiving more than double the amount of the lump sum.
Will any Veteran receive less than they previously received with these changes?
Veterans who were entitled to the Earnings Loss or Retirement Income Security Benefit or Career Impact Allowance Supplement will not receive less under the Income Replacement Benefit (pre-offsets) than what they were receiving prior to this change. However, the structure of the payments and the portions that are taxable or not may change.
Veterans eligible for the Pain and Suffering Compensation will not receive any less than they would have if they received a Disability Award.
Is the money you are providing to Veterans as part of this package enough for them to live on?
Yes, for the most ill and/or injured Veterans who are not able to re-establish themselves following their service, the Pension for Life will provide financial security for those who need it most. The IRB is designed to ensure a middle-class income (from all sources) for eligible Veterans with long-term needs.
Who is eligible for the Pension for Life option?
Veterans and CAF members who experience a service-related illness or injury that results in a disability are eligible for the PSC. Income support and additional recognition for severe and permanent impairment is available for those Veterans who need it.
When will Veterans have access to these new benefits?
These benefits are expected on April 1, 2019.
Will VAC reach out to Veterans who are eligible under the new benefits and automatically enroll them, or are Veterans responsible for doing that themselves?
Veterans Affairs Canada will use all channels available to connect with Veterans to ensure they know about the changes. This includes talking with our front-line staff, sharing information through Facebook, Twitter and other social media channels, and using My VAC Account to reach those with an account. We will also be working with stakeholders groups and our Ministerial Advisory Committees to share this information and reach as many members and Veterans as possible.
Anyone with questions about the changes is encouraged to visit veterans.gc.ca for more information.
What are you doing to address issues to improve service delivery for Veterans?
We know that we are falling short of service delivery excellence. Now that we have delivered a balanced and effective combination of programs and services–of which the Pension for Life announcement was the final piece–we are turning our full attention to improving our department's service delivery.
While there is much to do, we have already made and are in the process of making improvements. These include:
- Ensuring accurate wait times for disability benefits are prominently displayed;
- Implementing our new Guided Support level of support for those who need more than a phone call but less than a Case Manager; and,
- Improving our digital tools, like the My VAC Account digital portal, which now includes direct messaging with VAC staff.
Looking at our internal processes, we are working towards an integrated, simplified and user-friendly service delivery model. Our vision for service excellence is:
- Veterans transition seamlessly from the CAF to VAC and into the VAC services they need when they need them.
- Veterans will get one application, assessment, exam and decision. Veterans don't do the work, we do.
- Veterans receive the right support for all of their needs–this continues as their lives evolve.
- Veterans consistently have a responsive, compassionate, and uncomplicated service experience regardless of where they live or how they choose to deal with us.
More information on our Service Delivery Review and our pursuit of service excellence can be found on our website.
The Veterans' Ombudsman has made a number of observations and recommendations to address systemic issues between VAC and DND that are creating extra and unnecessary red tape. What are the Government's plans to address and correct those issues and what is your expected timeline?
The Veterans' Ombudsman has made a number of recommendations to improve the lives of Veterans and their families. In a recent report, the Ombudsman noted that out of the 57 recommendations that were developed in collaboration with Veterans' advocates and organizations, 37 have been fully or partially implemented, and that six of the items in the Minister of Veterans Affairs' Mandate Letter are based on his recommendations.
In Budget 2017 the Government committed to develop an action plan that will see VAC and DND addressing the overlap and gaps that currently exist for Canadian Armed Forces members released from the military. The plan will also simplify benefits so that the process is easier to navigate, gets Veterans their services quicker and helps them transition to life after service.
What do you mean by well-being?
We define well-being as a satisfied and fulfilled Veteran with purpose, who is financially secure, safely housed, in good health physically and mentally, highly resilient in the face of change, well-integrated in the community, proud and cognizant of his or her legacy; and being valued and celebrated.
Our research on well-being–and its role in setting Veterans up for a successful post-service life–has been the driving force behind these changes.
"Well-being" is a broadly accepted goal of public policy, and there are many different ways of defining the concept. VAC's Research and Policy Directorates reviewed expert literature, considered findings from Veterans' population studies and held multidisciplinary consultations. The outcome was a composite well-being construct designed for Canadian Veterans and their families. Strategic outcomes were identified to support transition services, policies and programming.
Learn more about the seven domains of well-being.
Why did so many people criticize the New Veterans Charter, and how have these changes addressed those criticisms?
The Charter received unanimous support in Parliament when it was introduced as it effectively responded to significant dissatisfaction with the old Pension Act system. Since the introduction of the Charter in 2006 the focus of criticism has been pointed at the lump-sum Disability Award payment and comparisons with financial compensation offered through the Pension Act. However, it is not well understood that the Disability Award is only one component of the benefits offered under the Charter, which also included rehabilitation, vocational rehabilitation and income replacement programs.
The New Veterans Charter has evolved since 2006 to address gaps and criticism. It includes a comprehensive set of programs and services to enhance the overall well-being of Veterans and their families. This includes elements such as improved income replacement, mental health services, as well as family, career and education supports. This change to the Disability Award is something for which the Veterans' community has long advocated and will give Veterans a more straightforward and understandable benefits system that better meets their needs.
We have created a quick and simple guide to help you navigate commonly used acronyms used throughout our FAQ's
Acroynm Name APSC Additional Pain and Suffering Compensation CAF Canadian Armed Forces CAF-LTD (aka SISIP) Canadian Armed Forces Long Term Disability CIA Career Impact Allowance CIAS Career Impact Allowance Supplement CIB Critical Injury Benefit CFIS Canadian Forces Income Support DA Disability Award DEC Diminished Earnings Capacity DP Disability Pension DND Department of National Defence ELB Earnings Loss Benefit IRB Income Replacement Benefit NVC New Veterans Charter PA Pension Act PFL Pension for Life PSC Pain and Suffering Compensation PTSD Post-Traumatic Stress Disorder RISB Retirement Income Security Benefit SRB Supplementary Retirement Benefit VAC Veterans Affairs Canada VRAB Veterans Review and Appeal Board