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Disability Award Increase

Index

Q1: What is the new maximum amount of the tax-free Disability Award?

As of April 1, 2017, the new maximum tax-free Disability Award amount (98% to 100%) is $360,000 (up from the 2017 maximum of $314,723.89). All other Disability Award amounts (1% to 97%) have also been increased proportionally as a percentage of the maximum $360,000 amount.

Q2: How was the new maximum amount for the Disability Award determined?

The new maximum value of $360,000 is comparable to other forms of compensation paid in Canada for pain, suffering and diminished enjoyment that impact a person's quality of life (e.g., Workers Compensation and the Government Employees Compensation Act). The amount is also consistent with recommendations made by the Veterans Ombudsman and the Standing Committee on Veterans Affairs. The new rate further recognizes and compensates serving Canadian Armed Forces members and Veterans for the non-economic impacts of their service-related injuries.

Q3: Is the Death Benefit also increased?

Yes. As of April 1, 2017, the new Death Benefit amount is $360,000 (up from the 2017 maximum of $314,723.89).

Q4: Will anyone who received a Disability Award or Death Benefit prior to April 1, 2017, benefit from the increased rate?

Yes. Anyone who received a Disability Award or Death Benefit prior to April 1, 2017, is eligible to receive an additional, tax-free payment. No application is required for this additional payment. The amount of the one-time lump sum additional payment is the difference between this adjusted amount and the Disability Award and/or Death Benefit amount already paid.

Q5: Will I need to apply?

If you have already received a Disability Award or a Death Benefit, no application is necessary to receive the additional lump sum payment.

Q6: I am eligible for the increase in Disability Award. When should I expect a payment?

Once we have up to date mailing and banking information, you will receive the payment within 3 weeks, either by direct deposit or cheque.

There are some situations where more information or time is needed to process your payment. In these situations, you will receive your payment within 3 weeks from the date you return this information to VAC.

Q7: Do I need to complete a VAC 888 Disability Award Payment Options to receive this additional payment?

No. A VAC 888 is not required to receive this payment. This is a one-time payment with no annual payment options.

Q8: I received a "Verification of address and Banking Information" form. I have verified the information and/or made my changes on My VAC Account, do I still need to upload the form to My VAC Account? My address and payment instructions are the same, do I still need to send the form back to VAC, i.e., Matane?

Yes, if you received a "Verification of address and Banking Information" form in the mail, you must either verify/update and submit this form electronically through MVA or complete and sign the form and if applicable, the Direct Deposit form and return to us in the enclosed envelope provided. Once we receive the completed form and verify the information, you will receive your payment within 3 weeks.

Q9: I had to change banks and did not think to notify VAC of the change as I was not receiving any regular payments. My old account is closed, what will happen to my additional payment?

If a payment went to a bank account that is closed the payment will be rejected at the bank and returned to VAC. VAC will reissue the payment to the correct bank as soon as we have the updated information.

Q10: I changed my bank account yesterday for personal reasons but my other account is still open, what will happen with my additional payment?

If the bank account is still open then the payment that went out this week will be deposited into the account. As the account is still open you will be able to get your payment.

Q11: My spouse and I have separated in the last week and my account with VAC is a joint account but I updated my banking information today. Will my additional payment go to this new account?

If the bank account is still open then the payment that went out the first of this week will be deposited into the account.

Q12: I am a Canadian Armed Forces member/Veteran who has received a Disability Award and have not been contacted yet?

On April 1, 2017, we sent letters to everyone for whom we had current mailing and banking information to let them know they are eligible to receive the additional payment. As well, letters were sent to everyone who we had not been in touch with for more than two years to see if any updates were needed. It is possible that if we did not have your current mailing information, you did not receive a letter. Please confirm your address and banking information in My VAC Account or call 1-866-522-2122 (toll-free) Monday to Friday, 8:30 to 4:30, local time.

Q13: What do I need to do to get my payment as soon as possible?

If you received a Disability Award and are receiving other monthly Veterans Affairs Canada program benefits, or if you received a Disability Award payment within the last two years, you will automatically get a letter confirming the amount of your additional lump sum payment.

If you are a Canadian Armed Forces member/Veteran and received a Disability Award more than two years ago and are not currently receiving other monthly Veterans Affairs Canada program benefits, please update your address and banking information now by calling 1-866-522-2122 or through My VAC account.

Q14: I am a survivor/dependent child who received a Disability Award and/or Death Benefit payment on behalf of a deceased member or Veteran prior to April 1, 2017. Will I benefit from the increased rate?

Yes. As of April 1, 2017, survivors and/or individuals who were dependent children at the time of the Canadian Armed Forces member’s or Veteran’s death who received a Disability Award and/or a Death Benefit on behalf of a deceased member or Veteran are eligible for the additional payment.

Q15: My spouse/common-law partner/parent was a CAF member/Veteran who received a Disability Award, but is now deceased. Am I entitled to the additional payment? How do I apply?

If a Canadian Armed Forces member or Veteran has died since receiving a Disability Award, the additional payment is payable to the Canadian Armed Forces member’s /Veteran’s survivor and/or individuals who were dependent children at the time of the Canadian Armed Forces member’s or Veteran’s death.

However, before you receive an additional payment, we will contact you to declare all beneficiaries (e.g. spouse/common-law partner, natural child, child of spouse/common-law partner, adopted child or child with disability of any age). We will be in contact with you.

Q16: I am an individual who was a dependent child at the time of my parent’s death and I am now 18 years of age or older. Will I receive the additional payment directly?

Yes, if you were a dependent at the time of your parent’s death and your eligibility was already established, you will receive the additional payment directly.

However, before you receive an additional payment, we will contact you as we will need some information. We will be in contact with you.

Q17: I am the mother/father/guardian calling on behalf of an individual who was a dependent child at the time of the Veteran’s/member’s death and she/he is less than 18 years of age. Will I receive the additional payment on their behalf?

If we determined that the dependent child is eligible, yes the additional payment will be paid to the mother/father/guardian “in trust” on behalf of the dependent child.

Q18: How is this one-time lump sum additional payment calculated?

Essentially, the one-time lump sum additional payment is the difference between the adjusted amount(s) from the year you were paid and the Disability Award(s) and/or Death Benefit amount(s) you already received.

To calculate the amount of the one-time lump sum additional payment, VAC takes the new maximum Disability Award and/or Death Benefit amount ($360,000)—that came into effect on April 1, 2017—and adjusts downward by the Consumer Price Index for each year back to 2006. Veterans Affairs Canada then calculates the amount you would have been paid (based on the new adjusted maximum for that year) and subtracts the amount of Disability Award and/or Death Benefit already paid.

Each payment differs depending on when the Disability Award(s) was paid and whether it was one Disability Award or multiple Disability Awards.

Example (hypothetical):

A Veteran received a 20% Disability Award in 2007. At that time, the maximum amount was equal to $255,729.25, so the Veteran was paid $51,145.85 (20% of the maximum amount).

To calculate the amount of the additional payment for this Veteran, VAC would take 20% of the newly adjusted maximum amount for 2007 (20% of $303,925.36 = $60,785.07) and subtract the previous amount the Veteran was paid ($51,145.85). The difference ($9,639.22) is the one-time lump sum additional payment that the Veteran would receive from VAC.

Calculation:

Adjusted 2007 rate (new maximum) $303,925.36 x 20% = $60,785.07
Original 2007 rate previously paid $255,729.25 x 20% = $51,145.85
One-time lump sum additional payment $9,639.22

The table below illustrates the new maximum Disability Award amounts. As of April 1, 2017, those who are entitled to 100% of the Disability Award will receive $360,000, adjusted by the Consumer Price Index for each year between 2017 and 2006 for the purposes of calculating the additional payment.

Year of
Disability Award
Inflationary increase
Maximum Disability Award Amount
Before April 1st, 2017
New Maximum Disability Award
2017 $314,723.89 $360,000.00
2016 $310,378.59 $354,679.80
2015 $306,698.21 $350,128.13
2014 $301,275.26 $343,937.26
2013 $298,587.97 $340,531.94
2012 $293,308.42 $334,510.75
2011 $285,319.47 $325,083.33
2010 $276,079.70 $319,649.29
2009 $267,364.94 $318,375.79
2008 $260,843.84 $310,307.79
2007 $255,729.25 $303,925.36
2006 $250,000.00 $297,674.20
Lump sum increase

Q19: I have an outstanding overpayment with VAC. Will the additional payment be used towards this overpayment?

It depends on each individual’s situation. In some cases, for example, those who have a repayment plan already established of less than two years will receive the additional payment. In other situations, this payment may be used to reduce your overpayment. You will receive a letter explaining how the overpayment will be applied.

Q20: I noticed an amount was deposited into my bank account and I am wondering if it is the additional payment related to the Disability Award increase. It shows up as Government of Canada deposit and not Veterans Affairs Canada.

It is possible the payment may be the additional payment related to the Disability Award increase. To confirm, please call 1-866-522-2122 (toll-free) Monday to Friday, 8:30 to 4:30, local time.

Q21: I received a letter saying that I can expect a payment within two weeks but I never applied for anything. Can you explain?

No application is required for the additional payment related to Disability Award increase. Because you received a Disability Award and we had your up to date information, we were able to calculate the amount of your additional payment and deposit the payment into your bank account/or make the payment by cheque.

Q22: I received a letter saying that I can expect a payment within two weeks, however it is over that period of time now. Who should I contact?

Please call 1-866-522-2122 (toll-free) Monday to Friday, 8:30 to 4:30, local time.

Q23: I am a survivor of a deceased Canadian Armed Forces member or Veteran and received my letter and my mother is getting 50% of the additional payment and my sister and I are only getting 25% each. Why is it not split equally among all three of us?

The division of this additional payment has been made in keeping with the legislation. When there is a survivor and dependent children who qualify to receive the additional payment, the survivor is entitled to 50% of the payment and the other 50% is to be equally divided amongst the dependent children. Based upon this, you and your sister are each entitled to 25% of the total payment.

Survivor only

If there is a survivor and no dependent child, the survivor is entitled to 100% of the additional payment.

Survivor and dependent child(ren)

If there is a survivor and one or more dependent children, the survivor is entitled to 50% of the additional payment, and dependent children are entitled to 50% of the additional payment, divided equally among them;

Dependent child(ren) only

If there are one or more dependent children but no survivor, each of the dependent children is entitled to the amount obtained by dividing the additional payment by the number of those dependent children.

Q24: I have moved since the last time I communicated with VAC. How can I change my address?

If you are a registered user of My VAC Account, you can access your file and update your address as needed. If you are not a registered user of My VAC Account, you can register by going to veterans.gc.ca and accessing My VAC Account.

You can call 1-866-522-2122 to update your address information.

If you wish to submit your changes in writing, please send a letter, ensuring to include your name and signature, file or service number, your old and new addresses, and the effective date to:

Veterans Affairs Canada
PO Box 6000
Matane QC G4W 0E4

Q25: How can I confirm OR update my bank account information?

If you are currently receiving benefits from VAC, and you are currently a registered user of My VAC Account, you can access your file and update your bank account information as needed. If you are not a registered user of My VAC Account, you can register by going to veterans.gc.ca and accessing My VAC Account.

Alternatively, we can send you the form you will need to complete and return to Veterans Affairs Canada. Please contact us at 1-866-522-2122.

Q26: Will the new rates for the Disability Award be indexed?

Yes. On January 1st of each year, VAC will adjust the rates for the Disability Award(s) in accordance with the Consumer Price Index percentage increase.

Q27: I previously chose to have annual payments for my Disability Award instead of a lump sum. Will the additional payment that I receive impact my annual payment?

No. Based upon the legislation, the additional payment can only be paid as a one-time lump sum. As such, you will continue to receive your annual payments as previously calculated with no impact on your existing arrangements.

Q28: Is the additional payment taxable?

No. The additional payment is a tax-free lump sum.

Q29: I am currently receiving a monthly Disability Pension or a Survivor’s Pension and I have never received a Disability Award . Am I eligible for an additional payment? Why am I not included in this change?

If a Veteran has been granted pensioned disabilities only under the Pension Act and has not been awarded a disability award, then this Veteran would not be eligible to receive the additional one-time lump sum payment.

This was to address concerns that the value of the disability award was less when compared with the value of the disability pension over the lifetime of the Veteran. Also, this change makes the disability award more comparable to other forms of compensation paid in Canada for pain and suffering.

Q30: Is there a plan to have the Disability Pension increased in addition to its annual indexing?

No, the maximum Disability Award lump-sum amount was increased so that it is comparable to or greater than similar non-economic compensation amounts payable in Canada under private and public sectors insurance plans, by the Workers’ Compensation Board or as non-pecuniary damages awarded by Canadian courts.

Q31: Prior to May 2012, Disability Pensions were taken into consideration when calculating the Earning Loss Benefit (ELB) amount. Will this additional payment create an overpayment for ELB payment?

No. The additional payment will not be considered income and therefore will not create an ELB overpayment.

Q32: Will individuals who received an ex gratia payment for a sudden service-related death that occurred between May 2005 and April 2006 be eligible to receive the additional payment?

No. The additional payment related to the Budget 2016 Disability Award increase do not apply to ex gratia payments that were paid between May 2005 and April 2006.

Q33: How much will my increase be?

Payment amounts are on a case-by-case basis. You will get a letter confirming the amount of your additional lump sum payment.

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