Income Replacement Benefit

Looking after your health or your next career will be your top priority. We can help with the finances while you are doing that. The Income Replacement Benefit maintains your income while you are taking part in the VAC rehabilitation program.

About this program

The Income Replacement Benefit is a taxable, monthly benefit that ensures your total income will be at least 90 percent of your gross pre-release military salary until you reach age 65 if you have a diminished earning capacity.

If you do not have a diminished earning capacity, this benefit ensures your total income will be at least 90 percent of your gross pre-release salary for as long as you are participating in the Rehabilitation Services and Vocational Assistance Program, or until you reach age 65 – whichever comes first.


Do you qualify?

You should apply for this program if you are:

  • a former member of the Canadian Armed Forces, and
  • taking part in our rehabilitation services.

You should also apply for this benefit if you are the survivor or dependent child of a CAF member or Veteran who died due to an illness or injury related to their service.


How to apply


Apply online

If you are registered for My VAC Account, you can submit your application for this benefit online. If you aren't registered, you can register now.

My VAC Account

Mail or in person

Download the application form. Then, drop it off at a VAC office or CAF Transition Centre. You can also mail your completed form directly to the address listed on the form.

Go to form

Get help with your application

The staff at any VAC office or CAF Transition Centre can assist you, or call us at 1-866-522-2122.


Additional information

Find out more

Calculation of benefit

The Income Replacement Benefit will be determined based on whichever is highest:

  • 90% of your salary at release, indexed forward to current day, or
  • the minimum threshold ($48,600), indexed annually based on the Consumer Price Index. The minimum threshold is comparable to the middle-class tax bracket.

Use this tool to learn more about what the Income Replacement Benefit will mean for different Veterans, or their survivors:

Income Replacement Benefit tool

Offsets

The benefit is offset by other income sources, such as amounts paid to you through the Canadian Forces Superannuation Act, commonly known as a military pension.

To encourage activities that are beneficial and meaningful such as a part-time job, the Income Replacement Benefit will allow you to earn up to $20,000 per year from employment before any offsets are applied.

Diminished Earning Capacity

To be identified as having Diminished Earning Capacity (DEC) means that you are affected by a permanent physical or mental health condition that prevents you from performing any occupation that would be considered suitable gainful employment.

Suitable Gainful Employment means employment for which you are reasonably qualified for because of your education, training and experience and provides a monthly rate of pay equal to at least two-thirds of your pre-release salary or the minimum threshold.

Life time benefit

If you are unable to find suitable gainful employment due to a physical or mental condition related to your service and are experiencing a diminished earning capacity, the benefit will be paid for life. Your salary calculation starting from date of release will be increased by 1 percent every year. This increase will continue for 20 consecutive years, or until you turn 60 – whichever comes first.

After you reach age 65, your benefit will be reduced and you will receive 70 percent of your adjusted pre-release salary (minus offsets from other income sources, such as benefits payable under the Canadian Forces Superannuation Act, commonly known as the CAF military pension.).


Related programs

Rehabilitation services: Services to improve your health and adjust to life after service.

Vocational rehabilitation: To help you transfer your skills and education to build a rewarding civilian career.


Frequently asked questions

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.


What is Diminished Earning Capacity and how is it calculated? How is this different from TPI and will Veterans already designated TPI be automatically designated DEC?

Diminished Earning Capacity (DEC) means that the Veteran is incapacitated by a permanent physical or mental health problem that prevents the Veteran from performing any occupation that would be considered suitable gainful employment.

Suitable Gainful Employment (“employability”) means employment for which the Veteran is reasonably qualified by reason of education, training and experience and that provides a monthly rate of pay equal to at least 66 2/3 per cent of the imputed income of the Veteran (pre-release salary or minimum amount).

Diminished Earning Capacity (DEC) is the name that replaced Totally and Permanently Incapacitated (TPI) on April 1, 2017. All Veterans who were deemed TPI were automatically designated DEC on that date.


View all Income Replacement Benefit FAQs.

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