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Service Income Security Insurance Plan (SISIP) and its influence on the calculation of the Veterans Affairs Canada (VAC) Earnings Loss (EL) Benefit

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Issue

Response to the Office of the Veterans Ombudsman on the Service Income Security Insurance Plan (SISIP) and its influence on the calculation of the Veterans Affairs Canada (VAC) Earnings Loss (EL) Benefit.

Facts

The monthly SISIP long-term disability benefit is set at 75 per cent of an individual’s gross monthly income, and is reduced by their monthly VAC disability pension. In the ongoing class action Manuge v. Her Majesty The Queen, the plaintiffs allege the "claw back" of the VAC disability pension from their SISIP income is unlawful and unfair.

Offsetting one monthly disability pension by another is an industry and government-wide practice within long-term disability programs. This ensures there is no inadvertent disincentive to work by providing more money to stay home. Having a person establish a career after a serious injury is seen as key to improving their independence. The programs under the New Veterans Charter (NVC) were designed to promote and support wellness, independence and a successful transition to civilian life.

Status

Does Veterans Affairs Canada plan to change how Earnings Loss benefits are calculated with respect to the claw back issue, or does the Department intend to await the outcome of the SISIP legal action?

VAC is reviewing perceived gaps within the NVC which have been identified by internal and external stakeholders and is exploring potential solutions. VAC’s Financial Benefits program is a pillar of the NVC with the EL benefit being the primary benefit payable.

The EL benefit provides separate and distinct financial compensation in recognition of the economic impact a service-related or career-ending disability has on the Veteran's earning capacity. A number of specific benefits or earnings are offset when determining the amount that is payable, including: monthly benefits payable under the Pension Act, Canadian Forces Superannuation Act, Public Service Superannuation Act or the Employment Insurance Act; and benefits under the Canada Pension Plan or Quebec Pension Plan.

The practice of offsetting other disability benefits when determining the amount payable by a particular organization is consistent with other federal and provincial long-term disability insurance and workers’ compensation plans across Canada.

The NVC programs were designed to promote and support wellness, independence and a successful transition to civilian life.

Does VAC plan to change the claw back practice as part of the harmonization?

It is common practice to offset one disability pension by another which is in line with most workplace compensation standards in Canada.

Will the claw back issue be addressed in the first round of amendments? When does VAC intend to submit the first amendments?

VAC is looking at perceived gaps with respect to the EL benefit to ensure that the benefits meet the financial needs of eligible CF members and Veterans.

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