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Income Replacement Benefit tool

Explore different payment scenarios

Veterans who released from the Canadian Armed Forces (CAF) and participate in the Veterans Affairs Canada (VAC) rehabilitation program qualify for the Income Replacement Benefit.

This monthly benefit provides income support to Veterans who experience barriers to re-establishment in post-service life due to a health problem resulting primarily from service.

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

Income Replacement Benefit Tool for Veterans

You have indicated that you would like to learn what the Income Replacement Benefit could mean financially for CAF Veterans.

VAC must consider several factors when we calculate Veterans’ Income Replacement Benefit amounts. This tool lets you combine different variables and view the resulting estimated Income Replacement Benefit amount.

Instructions

Select a variable from each drop-down box to reveal a different Income Replacement Benefit monthly payment.

What is a Diminished Earning Capacity status? Diminished Earning Capacity 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.

Outcome

After age 65, the amount will change to 70% of the benefit before age 65 before income offsets and taxes per year.

Please note that the career progression factor of 1% that you may be eligible for is not included in this calculation. For more information on the career progression factor, please see the Additional Context section below.

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What are income offsets? Income offsets are amounts you receive from other sources, such as benefits payable under the Canadian Forces Superannuation Act.

Outcome

A Veteran who fits this scenario, like [name] is likely to receive monthly Income Replacement Benefits of [$X,XXX], [gross/net]per month, until [his/her] rehabilitation program is finished.

Please note that the career progression factor of 1% that you may be eligible for is not included in this calculation. For more information on the career progression factor, please see the Additional Context section below.

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Additional Context

  • The Canadian Armed Forces Long Term Disability (CAF LTD) Plan

    The CAF LTD plan is the CAF's group disability insurance plan that provides vocational rehabilitation, vocational assistance and income support to all medically releasing CAF members. It also provides support to members who voluntarily release and qualify as totally disabled. All CAF members are automatically covered by the CAF-LTD plan starting on their day of enrollment.

    SISIP Financial administers the CAF LTD insurance plan on behalf of the Chief of the Defence Staff for CAF members and Veterans.

  • 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.

  • Career Progression Factor

    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.

  • Employment Earnings

    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.

  • The Income Replacement Benefit is taxable

    This benefit is taxable because it is a replacement for income that would have been earned should the Veteran not have had an injury or illness related to service.

Additional Context

  • Rehabilitation Services and Vocational Assistance Program

    Participation in VACs Rehabilitation Services and Vocational Assistance Program is mandatory to receive IRB, unless it is determined it will not improve the Veteran's earnings capacity.

  • The Canadian Armed Forces Long Term Disability (CAF LTD) Plan

    The CAF LTD plan is the CAF's group disability insurance plan that provides vocational rehabilitation, vocational assistance and income support to all medically releasing CAF members. It also provides support to members who voluntarily release and qualify as totally disabled. All CAF members are automatically covered by the CAF-LTD plan starting on their day of enrollment.

    SISIP Financial administers the CAF LTD insurance plan on behalf of the Chief of the Defence Staff for CAF members and Veterans.

  • Employment Earnings

    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 calendar year before the benefit is adjusted rather than immediately reducing benefits, as is currently the case.

    The 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.

  • The Income Replacement Benefit is taxable

    This benefit is taxable because it is a replacement for income that would have been earned should the Veteran not have had an injury or illness related to service.

  • Career Progression

    A Veteran receiving IRB has their benefit calculated based on 90% of their pre-release salary, indexed annually for inflation. They receive this while pursuing rehabilitation services. If a Veteran is ultimately determined to have a diminished earning capacity and requires income support indefinitely, they receive the 1% career progression factor applied to their monthly military salary at release, every year until the Veteran reaches what would have been 20 years of service or age 60.

    Survivors of Veterans who died of a service related cause prior to age 65 are also eligible for the career progression factor of 1%. The adjusted military salary with career progression will be used for the IRB calculation starting the month in which VAC determines that the Veteran will receive the IRB for life.

    Before 1 April 2019, the career progression factor is only payable to Veterans with Diminished Earning Capacity decisions.

Income Replacement Benefit for Survivors

You have indicated that you would like to learn what the Income Replacement Benefit could mean financially for survivors of CAF Veterans.

VAC must consider several factors when we calculate survivors’ Income Replacement Benefit amounts. This tool lets you combine different variables and view the resulting estimated Income Replacement Benefit amount.

Instructions

Select a variable from each drop-down box to reveal a different Income Replacement Benefit monthly payment.

Questions about Pension for Life survivor benefits?

Learn more by reading commonly asked questions and answers about survivor benefits.
Pension for Life Q&A

Outcome

Please note that the career progression factor of 1% that you may be eligible for is not included in this calculation. For more information on the career progression factor, please see the Additional Context section below.

Reset All

What are income offsets as they pertain to survivors? Income offsets are amounts you receive from other sources, in respect of a deceased Veteran, such as survivor benefits paid under the Canadian Forces Superannuation Act.

Additional Context

  • 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.

  • The Income Replacement Benefit is taxable

    This benefit is taxable because it is a replacement for income that would have been earned should the Veteran not have had an injury or illness related to service.

  • Division of Benefit

    A surviving spouse or partner receives 100 percent of the benefit in the event of no surviving dependent children.

    In cases with a surviving spouse or partner and one or more surviving dependent children, the spouse or partner receives 50 percent of the benefit. The surviving children collectively receive the other half.

    In cases without a surviving spouse or partner, the benefit is divided equally among surviving children.

  • Career Progression

    A Veteran receiving IRB has their benefit calculated based on 90% of their pre-release salary, indexed annually for inflation. They receive this while pursuing rehabilitation services. If a Veteran is ultimately determined to have a diminished earning capacity and requires income support indefinitely, they receive the 1% career progression factor applied to their monthly military salary at release, every year until the Veteran reaches what would have been 20 years of service or age 60.

    Survivors of Veterans who died of a service related cause prior to age 65 are also eligible for the career progression factor of 1%. The adjusted military salary with career progression will be used for the IRB calculation starting the month in which VAC determines that the Veteran will receive the IRB for life.

    Before 1 April 2019, the career progression factor is only payable to Veterans with Diminished Earning Capacity decisions.

Questions and Answers

  • How does the online tool work?

    The online Income Replacement Benefit (IRB) tool is a web-based tool that can show how the calculation of an IRB would work for a either a Veteran or a survivor, with, or without a Diminished Earning Capacity (DEC) decision for a variety of ages, ranks and salary ranges, and years served.

    The tool has drop-down boxes. For each box, you can choose an option. The resulting dollar figure is an estimate of the Income Replacement Benefit based on the options you chose.

  • I am currently receiving financial benefits from the Department, when will I know what my exact amount of IRB will be come April 1, 2019?

    After Pension for Life comes into effect on April 1, 2019, you will be provided with an official decision letter that explains the Income Replacement Benefit amount you will receive.

  • I have a scenario that isn’t part of online tool. Where can I get information?

    The tool was developed to illustrate different scenarios. We know that not all scenarios are included. If your scenario is not similar to any of those in the online tool, after Pension for Life comes into effect on April 1, 2019, you will be provided with an official decision letter that explains the Income Replacement Benefit amount you will receive.

  • Where can I find more information on the Income Replacement Benefit?

    A set of questions and answers and a factsheet on the Income Replacement Benefit is available on our website here: Q&A

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