Questions and answers

Pension for Life

What is the proposed Pension for Life?

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.

The Pension for Life benefits package includes: The Pain and Suffering Compensation, the 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 empowers 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.

What was 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.

What were the reasons that we did not return 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 didn’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.

Pension for Life reduced the complexity of having six different financial benefits, all with varying criteria and payment schemes by consolidating them into one. As well, we created payment flexibility in the Pension for Life benefits and further recognition 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.


Pain and Suffering Compensation

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 members and Veterans up to a maximum of $1,150 a month for life. Members and Veterans 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.

What is the eligibility criteria be for the Pain and Suffering Compensation?

The Pain and Suffering Compensation is available to CAF members and Veterans who have a disability caused by a service-related illness and/or injury. The actual amount of the PSC will be determined by a member or 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 members or Veterans who receive the PSC will receive the maximum of $1,150 per month.

What happens to the monthly Pain and Suffering Compensation payments if the member or Veteran passes away?

If a member or 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 member or 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 max monthly amount of $1150 determined?

The $1,150 maximum monthly amount was determined to be an appropriate amount of monthly compensation for pain and suffering. If we look at an 18-year-old Veteran, for example, who will receive the maximum amount and will receive this benefit over their lifetime, if they choose to take the monthly option, they will receive over double what they would have received had they taken the lump sum payment. The monthly amount is important to us because we want to ensure that individuals have this payment on a monthly basis, for life. Instead of dividing the lump sum into monthly payments, we are offering members and Veterans the opportunity to receive more, which will hopefully encourage them to choose the monthly option. We also looked at comparable jurisdictions, such as Australia, when we were determining the monthly maximum, and we found that $1,150 is a comparable amount in other jurisdictions.

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 your payments at any time 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 member and Veteran can make a personal decision that best meets their individual needs.

VAC encourages members and Veterans to seek independent financial advice in order to determine the best option for them. Veterans Affairs Canada will pay up to $500 for members and 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 member or Veteran’s lifetime than the lump sum option?

The monthly payment is for life, so it depends on whether a member or Veteran’s life is longer or shorter than their predicted life expectancy.

What about members or Veterans who received a lump sum Disability Award payment before April 1, 2019?

Members and Veterans who received a Disability Award (DA) may benefit from the new Pain and Suffering Compensation (PSC), by way of an additional monthly amount. This monthly amount is paid to the member or Veteran, and is an amount paid above and beyond the DA lump sum they received. Those who are eligible for this payment will have the calculation automatically done and their individualized amount will be payable for life. No re-assessment of the member’s or Veteran’s extent of disability is required.

The calculation considers:

  1. The amount that the Veteran already received from VAC;
  2. The monthly amount the Veteran 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.

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. Members and Veterans can make a choice based on their own preference.

Veterans Affairs Canada will pay up to $500 for members and 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 provides 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 member or 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 member or Veteran because of their illness or injury.


Additional Pain and Suffering Compensation

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 difference between CIA and APSC?

Taxability: The Career Impact Allowance (CIA) is taxable because it compensates for lost employment potential and career progression opportunities. The Additional Pain and Suffering Compensation (APSC), on the other hand, will be non-taxable because it compensates for the extent to which permanent and severe impairments cause barriers to re-establishment.

Eligibility: The eligibility for the two programs is similar in many ways:

  • they are only payable to Veterans;
  • the Veteran must have a disability benefit; and
  • the Veteran must have a permanent and severe impairment.

The key eligibility difference between the two benefits is that under CIA, a Veteran must have an approved rehabilitation plan in order to receive the CIA. Under APSC, a Veteran must only have a barrier to re-establishment to qualify, they do not have to have an approved rehabilitation plan.

Grade Levels: Both benefits have three grade levels. The key difference on which grade is paid is that the CIA considers medical impairment as well as earnings capacity. APSC will only consider medical impairment. The APSC has no equivalent to the CIA Supplement.

Why is CIA taxable?

The CIA is taxable because it is associated with loss of income.

Why is APSC non-taxable?

The APSC is not associated with income, which makes it non-taxable. Instead, the benefit is designed to recognize the extent to which service-related permanent and severe impairments cause barriers to re-establishment.


Income Replacement Benefit

Index

  1. What is the Income Replacement Benefit?
  2. What is the eligibility criteria for the Income Replacement Benefit?
  3. Why are we eliminating/consolidating six financial benefits?
  4. 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?
  5. Will this improve processing and wait times?
  6. Will my payments decrease as a result of consolidated benefits?
  7. Why are Veterans (under the NVC) required to participate in VAC's Rehabilitation Program in order to be eligible for IRB?
  8. 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?
  9. What supports/options are available to medically released Veterans with disabilities that are caused by non-service related injuries and illnesses?
  10. 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?
  11. Will Veterans be able to earn any income without reducing the income received from other sources?
  12. At age 65 how is the 70% IRB calculated? What offsets are considered?
  13. 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?
  14. 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?
  15. If a Veteran receives IRB and dies after age 65 what are survivors and orphans eligible/entitled to?
  16. Why are Veterans able to earn up to $20,000 while receiving the Income Replacement Benefit?
  17. What information is required to document the $20,000 income? Will an annual update be required like the current process for ELB?
  18. How did Veterans Affairs Canada determine the career progression factor of 1%?
  19. Are all of the Income Replacement Benefit conversion letters completed and posted in My VAC Account or being mailed out?
  20. When will these groups have their Income Replacement Benefit letters finalized?
  21. How do I know my calculation and payment information for my Income Replacement Benefit is correct if I don’t have a letter explaining it?

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 diminished 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 diminished 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.

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 Earning 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).

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.

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.

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.

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.

At age 65 how is the 70% IRB calculated? What offsets are considered?

If a Veteran has a diminished earning capacity prior to age 65, Income Replacement Benefit (IRB) may be payable for life. After the Veteran reaches the age of 65, instead of receiving 90 percent of salary at the time of release from the military, the Veteran will receive 70 percent of the IRB amount payable prior to age 65, less offsets. The benefit will be offset by other income sources, such as benefits payable under theCanadian Forces Superannuation Act, commonly known as the CAF military pension.

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.

What information is required to document the $20,000 income? Will an annual update be required like the current process for ELB?

As with the current Earnings Loss Benefit (ELB), Veterans will be required to notify the Department of their employment earnings and provide annual statements. Proof of employment such as pay stubs, Records of Employment, T4s, etc. that the Veteran has access to can be used to document income earnings. An annual verification, similar to the current one for ELB, will be part of the IRB.

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.

Are all of the Income Replacement Benefit conversion letters completed and posted in My VAC Account or being mailed out?

The majority of the second and more detailed Financial Benefit conversion letters are now available in My VAC Account and are being mailed out.

However, some of the second and more detailed Financial Benefit conversion letters still need to be finalized and we are working to complete this.

These include letters for:

  • survivors and orphans;
  • reservists with career progression;
  • Veterans with an existing over payment; and
  • some cases where payments changed from the release of the original letter.

We will update you as more information becomes available for the above groups.

When will these groups have their Income Replacement Benefit letters finalized?

We expect to have these letters within the next few weeks. We will update you as more information become available. We will release them in My VAC Account and send by mail as soon as they are finalized.

How do I know my calculation and payment information for my Income Replacement Benefit is correct if I don’t have a letter explaining it?

We have built the system to complete your calculations based on the conversion rules that were part of the new Pension for Life legislation. The calculations for Financial Benefits have been tested extensively and completed.

However, for the letters we had to produce a conversion for each individual scenario. There were more than 24 different conversion/calculations explanations needed for the up to 20,000 recipients. This has caused a delay in some Financial Benefit being completed.


Survivors

Are survivors and surviving dependent children eligible for the Pension for Life?

Yes, survivors and surviving dependent children are eligible for two of the Pension for Life benefits, which are: the Pain and Suffering Compensation; and the Income Replacement Benefit.

Is Veterans Affairs Canada taking anything away from survivors through the Pension for Life?

No, the Department is committed to supporting members, Veterans and their survivors. Through the Pension for Life, Veterans Affairs Canada is increasing survivors' eligibility for financial benefits through the Income Replacement Benefit and is increasing the amount that is payable to them from 50 to 70% (for details see next question).

What can survivors and surviving dependent children receive under the Income Replacement Benefit?

Eligibility for survivors and surviving dependent children to benefits has increased through the Income Replacement Benefit, and the amount they will be paid has also increased.

For example, if a Veteran in receipt of the Income Replacement Benefit dies before age 65 of non-service related causes, the survivor and surviving dependent children will be eligible for a lump-sum payment equal to 24 months times the amount the Veteran received in the month before he or she died.

Currently, the survivor and/or surviving dependent children do not have access to benefits if the Veteran was in receipt of short-term Earnings Loss, and survivors are only eligible for the Supplementary Retirement Benefit if the Veteran was in receipt of long-term Earnings Loss.

If a Veteran dies after age 65 of non-service related causes, survivors and surviving dependent children will be eligible for 70% of the Veteran's post-65 Income Replacement Benefit. Currently, survivors are only eligible for 50% of the Veteran's post-65 Retirement Income Security Benefit and surviving dependent children are not eligible for the Retirement Income Security Benefit.

If a member or Veteran dies before age 65 of service-related causes, the survivor and/or dependent children will be eligible for the same Income Replacement Benefit that the Veteran would have been eligible for until age 65. After age 65, the survivor and/or dependent children will receive 70% of the benefit the Veteran would have been eligible to receive which is payable for life (this is an increase from the current 50%).

If a Veteran dies after age 65 of service-related causes, the survivor and/or surviving dependent children will receive 70% of the Veteran's post 65 Income Replacement Benefit (70%) which is an increase from the current 50%.

Division of the Benefit

If an Income Replacement Benefit is payable to a survivor and/or surviving dependent children, the following rules apply to the division of the benefit:

If there is a survivor but no surviving dependent children, the survivor will receive 100% of the Income Replacement Benefit.

If there is a survivor and one or more surviving dependent children, the survivor is entitled to 50% of the Income Replacement Benefit and the surviving dependent children, as a group, are entitled to 50% of the Income Replacement benefit divided equally between them.

If there are one or more surviving dependent children but no survivor, each of the surviving dependent children is entitled to the amount obtained by dividing the Income Replacement Benefit by the number of surviving dependent children.

What can survivors and surviving dependent children receive under the Pain and Suffering Compensation?

Survivors and surviving dependent children have the same eligibility that they have now with the Disability Award.

For example, if a member or Veteran in receipt of a monthly Pain and Suffering Compensation payment dies, the survivor and dependent children would receive the remaining balance as a lump sum.

In addition, the survivor and/or surviving dependent children can apply for any Pain and Suffering Compensation that the member or Veteran did not apply for when alive. This compensation will be paid to survivors and dependent children as a lump sum amount.

What can survivors and surviving dependent children receive under the Additional Pain and Suffering Compensation?

Survivors and surviving dependent children are not currently eligible for the Career Impact Allowance. This eligibility will not change when the Additional Pain and Suffering Compensation comes into effect. Therefore, survivors and surviving dependent children will not be entitled to the Additional Pain and Suffering Compensation.


Financials

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.

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.


Eligibility

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.

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.

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 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 Earning 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.


Additional Monthly Amount

What is this additional monthly amount I keep hearing about?

With the introduction of Pension for Life on April 1, 2019, all members and Veterans who have received a Disability Award (DA) since April 1, 2006, will have their cases reviewed to see whether they would have received more under Pension for Life's new Pain and Suffering Compensation (PSC) had it been available at the time they received their DA.

If they would have received more through the Pain and Suffering Compension, they will receive an additional monthly amount.

How do you determine who gets an additional monthly amount?

We will use a calculation from the Department of Finance to determine your additional monthly amount. The amount you receive will depend on:

  • Your disability assessment percentage(s),
  • Your age as of 1 April 2019,
  • A life annuity factor (based on Veteran populations), and
  • The date you received your Disability Award(s).

Who can expect to receive an additional monthly amount?

Members and Veterans who received a Disability Award (DA) between April 1, 2006 and March 31, 2019 may receive an additional monthly amount. This monthly amount is paid to the member or Veteran, and is an amount paid above and beyond the DA lump sum they received.

Everyone will have their cases reviewed to see whether they would have received more under the new Pain and Suffering Compensation had it been available at the time they received their lump sum Disability Award. Those who would have received more will automatically have their additional monthly amount confirmed, and then paid for life. No re-assessment of the member's or Veteran's disability is required.

What is an annuity?

An annuity provides guaranteed income for the rest of your life, no matter how long you live.

The most important thing to understand is that calculations are based on life expectancy rates in the Veteran community and that although they appear to be smaller payments compared to a lump sum, you can receive these payments over longer periods of time.

Does the "life annuity factor" take age and sex into consideration?

Yes. The calculation used to convert lump sum amounts into monthly amounts must incorporate mortality rates because life expectancy differs depending on your sex.

Please note: Age and sex are only considered in the additional monthly amount calculation. No other benefit under Pension for Life takes age and sex into consideration.

Am I able to convert the additional monthly amount into a lump sum payment?

No. The additional monthly amount is above and beyond what you would have received as a lump sum Disability Award (DA) payment. It is only available as a monthly payment for life.

Why wouldn't I receive an additional monthly amount with the new Pension for Life?

Approximately 36% of those who have already received a Disability Award will not get an additional payment.

Depending on your age, the amount of your Disability Award and the date it was received, you may have received the same or more through the Disability Award than you would have received through the Pain and Suffering Compensation had it been available at the time you received your Disability Award. In that case, you would not receive an additional monthly amount.

The Disability Award you already received will not be impacted in any way.

How can I learn more about the additional monthly amount?

More information about the additional monthly amount is available online at www.veterans.gc.ca/additional-monthly-amount.


Service Delivery

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.


Well-Being

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.

Does the Department think that being financially secure is a major step to well-being?

Research shows that financial stability is among the first steps to overall well-being. VAC wants to ensure that Veterans who are ill and injured have the opportunity to focus on their rehabilitation and making informed choices about their life after service. The Income Replacement Benefit will provide a stable and predictable income while Veterans are focusing on the rest of their well-being and preparing themselves and their families for their chosen next step.


New Veterans Charter (2006)

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.


Acronyms

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 Earning 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

Changes to Rehab and Income Support

Index

  1. I am still in service. Am I able to apply for VAC's Rehabilitation Services and Vocational Assistance?
  2. I received a letter from VAC that says I am eligible for the Rehabilitation Services and Vocational Assistance Program. My release date is before March 31, 2019. Can you explain what this will mean for me?
  3. I received a letter from VAC that says I am eligible for the Rehabilitation Services and Vocational Assistance Program but my release date is on or after March 31, 2019. Can you explain what this will mean for me?
  4. Why will VAC no longer be providing support to medically-released Veterans with health problems not resulting primarily from service?
  5. What is the Canadian Armed Forces Long Term Disability (CAF LTD) plan?
  6. What will medically-releasing Veterans with health problems not related to their service have access to after the transition period (no later than April 1, 2024)?
  7. Is there a plan for these medically-releasing Veterans with health problems not related to their service?
  8. How is it currently determined if a health problem is resulting primarily from service?
  9. Why does your health problem(s) have to be resulting primarily from service to be able to access the new Income Replacement Benefit (effective April 1, 2019)?
  10. What if I currently receive income support through the Earnings Loss Benefit (ELB) but my health problems did not result primarily from service?
  11. If I am eligible for the Income Replacement Benefit, will I be able to earn up to $20,000 in employment without any deductions
  12. Will there be a time limit for me to apply to VAC's Rehabilitation Services and Vocational Assistance Program?
  13. I am a Veteran who will medically release after April 1, 2019 but my health problem is not primarily a result of my service. How will these changes impact me?
  14. What income support is available through the CAF LTD plan?
  15. How do these changes to the VAC Rehabilitation Services and Vocational Assistance Program relate to other transition-related initiatives taking place?

I am still in service. Am I able to apply for VAC's Rehabilitation Services and Vocational Assistance?

Yes. You can apply for VAC's Rehabilitation Services and Vocational Assistance Program while you are still serving. However, you cannot participate in the Program until you are a Veteran (i.e., the day after you release).

If you release on or after March 31, 2019, and your health problem is not primarily resulting from service, you will access vocational rehabilitation and vocational assistance support through the CAF LTD plan.

I received a letter from VAC that says I am eligible for the Rehabilitation Services and Vocational Assistance Program. My release date is before March 31, 2019. Can you explain what this will mean for me?

If you applied for rehabilitation services while serving, you may have received a letter from VAC about your future eligibility. You will receive the rehabilitation services and vocational assistance that you are eligible for through VAC if you release before March 31, 2019.

I received a letter from VAC that says I am eligible for the Rehabilitation Services and Vocational Assistance Program but my release date is on or after March 31, 2019. Can you explain what this will mean for me?

Some still-serving members apply for VAC Rehabilitation Services prior to their release. If you applied for rehabilitation services while serving, you may have received a letter from VAC about your future eligibility. However, if your release is on or after March 31, 2019, the decision in the letter you received may change due to these changes to VAC rehabilitation services. Please contact VAC if you find yourself in this situation. To contact the nearest CAF Transition Center (CAF TC), go to the link: www.canada.ca/en/department-national-defence/services/benefits-military/health-support/casualty-support/ipsc.html.

Why will VAC no longer be providing support to medically-released Veterans with health problems not resulting primarily from service?

Currently, all medically-released Veterans can access services through both the CAF LTD plan and Veterans Affairs Canada. CAF LTD is, and has always been, the first payer. The goal of the change is to simplify existing supports for Veterans to reduce confusion and duplication of the services being provided.

Support will continue for medically-released Veterans. This support is more generous than Public Service Health Care Plans and is specifically tailored to support the needs of releasing CAF members. All medically releasing members have access to other benefits such as the Education and Training Benefit and Career Transition Services. Nor will support be taken away from those Veterans who experience health problem(s) after they have released that result primarily from their service and cause a barrier to re-establishment.

As the employer sponsored group disability plan, CAF LTD will continue as first payer for income support, and as the first provider of vocational rehabilitation and vocational assistance for all medically-releasing CAF members, as it has since the 1970s.

Additional benefits and services will continue to be available through Veterans Affairs Canada for those whose health problems result primarily from service.

This approach is more consistent with private and public sector long-term disability support programs, whereby, employers provide long-term disability support for their employees who experience both a work related and a non-work related injury, illness or medical condition. With this change, the same will apply for CAF members. As their employer, CAF members/Veterans with service and non-service related illnesses or injuries will receive their primary coverage through the CAF LTD plan.

What is 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.

What will medically-releasing Veterans with health problems not related to their service have access to after the transition period (no later than April 1, 2024)?

Once medical and psycho-social rehabilitation services are reactivated under the CAF LTD plan, medically-released Veterans with health problems not resulting primarily from service will receive all their rehabilitation services (vocational, medical and psycho-social), vocational assistance and income support from CAF LTD. They will no longer access rehabilitation services or income support through Veterans Affairs Canada for these health problems; this will further streamline and simplify the transition process for medically releasing members.

Is there a plan for these medically-releasing Veterans with health problems not related to their service?

Yes. Veterans Affairs Canada and the Canadian Armed Forces are working closely together to transition medical and psycho-social rehabilitation services from VAC back to the CAF LTD plan as soon as possible. Medically-releasing Veterans with health problems NOT related to their service will continue to have access to medical and psycho-social rehabilitation services through VAC as an interim measure only until these services are available under the CAF LTD plan, which will be no later than April 01, 2024.

How is it currently determined if a health problem is resulting primarily from service?

VAC makes this determination based on evidence that demonstrates a connection between your health problem and your military service (i.e., medical reports, service records, etc.).

Why does your health problem(s) have to be resulting primarily from service to be able to access the new Income Replacement Benefit (effective April 1, 2019)?

The Income Replacement Benefit (IRB) is designed to provide income support to Veterans who experience barriers to re-establishment resulting primarily from service. It is meant to recognize the connection between your health problem and your service to Canada.

What if I currently receive income support through the Earnings Loss Benefit (ELB) but my health problems did not result primarily from service?

If you receive income support through the VAC Earnings Loss Benefit up to and including March 31, 2019, you will continue under the new Income Replacement Benefit.

If it is determined that you have a Diminished Earnings Capacity (DEC), you will continue to receive the IRB for life.

If I am eligible for the Income Replacement Benefit, will I be able to earn up to $20,000 in employment without any deductions?

Yes. With the new Income Replacement Benefit, you can earn up to $20,000 annually from employment and there will be no deduction to your benefit.

Will there be a time limit for me to apply to VAC's Rehabilitation Services and Vocational Assistance Program?

If you have a health problem resulting primarily from service that is causing a barrier to your re-establishment, there is no time limit to apply.

If you medically-release with health problems not resulting primarily from service on or after March 31, 2019, until such time as medical and psycho-social rehabilitation services are reactivated under the CAF LTD plan, you must apply to VAC within 120 days of your medical release in order to be able to access VAC medical and psycho-social rehabilitation services. You will continue to access vocational rehabilitation and income support through the CAF LTD (SISIP) plan.

I am a Veteran who will medically release after April 1, 2019 but my health problem is not primarily a result of my service. How will these changes impact me?

You will receive vocational rehabilitation, vocational assistance, and income support through the CAF LTD plan.

As an interim measure only, you will continue to have access to medical and psycho-social rehabilitation services through VAC, until these services are available under the CAF LTD plan (no later than April 01, 2024). In order to access medical and psycho-social rehabilitation services from VAC, you will need to apply to VAC within 120 days of your medical release.

Because your health problem is not related to service and you are medically released after April 1, 2019, you no longer have access to ELB or IRB and hence no 15% top-up.

What income support is available through the CAF LTD plan?

The Canadian Armed Forces Long Term Disability (CAF LTD) plan provides all medically releasing CAF members, whether their injury/illness is service-related or non-service related, with up to 75% of the member's salary at release from the CAF.

How do these changes to the VAC Rehabilitation Services and Vocational Assistance Program relate to other transition-related initiatives taking place?

These changes are part of a series of initiatives designed to improve the transition to life after service for CAF members, Veterans and their families. As part of Canada's Defence Policy, Strong, Secure, Engaged, the CAF's approach to transition is being reinvented to ensure that members receive the professional, customized and personalized support they need as they transition to post-military life. Changes to the VAC Rehabilitation Services and Vocational Assistance Program are a tangible result of the CAF and VAC working together to ensure that transition from the CAF to life after service is as streamlined as possible, that services are better harmonized with timely access to benefits and services, and coordinated case management throughout the transition process.


Service standards

How will PFL impact wait times?

A project the size of Pension for Life will always require system upgrades to improve internal and external systems for the users.

While it will take time to transition to a new system, these upgrades eventually make it faster to access benefits and services

It will also make it easier for Veterans and their families. One example of how PFL will make things easier for Veterans is the simplified application process for the Income Replacement Benefit which combines multiple pre-existing benefits into one monthly payment.

What will VAC’s new service standards be for Pain and Suffering Compensation (PSC), Additional Pain and Suffering Compensation (APSC) and Income Replacement Benefit (IRB)?

The service standards for PFL benefits will be as follows:

Pain and Suffering Compensation – 16 weeks
Additional Pain and Suffering Compensation – 12 weeks
Income Replacement Benefit – 4 weeks

Note: Processing time for all VAC applications/requests is counted from the time we receive all required supporting information, with the exception of Long Term Care.

The IRB combines multiple benefits (Earnings Loss Benefit, Extended Earnings Loss Benefit, Career Impact Allowance, Career Impact Allowance Supplement, Supplementary Retirement Benefit and Retirement Income Security Benefit) into one. Will combining these benefits mean that VAC will have more employees to work on reducing wait times overall?

The full impact of combining several pre-existing benefits into the IRB won’t be noticeable immediately.  It will take some time for staff to understand the new processes and, as with other Pension for Life benefits, we expect to see a continued increase in applications in the near-term. That said, we have hired more staff to process IRB applications and as they learn the new processes we will be able to review the workload and possibly move resources to become more efficient in other benefit areas.

How will transitioning to PFL impact wait times for other VAC programs and services?

Claim processing for disability and financial benefits will temporarily slow down during the transition to PFL. This is the result of short-term restrictions on some functions in our software as well as the time it will take to train staff on the upgraded software and new procedures with PFL benefits.

Although we expect a reduced capacity, we have developed a plan that will help us provide the most effective delivery of services possible.

How are you ensuring that the reviewing of files and transitioning to PFL doesn’t cause current backlog to get even larger?

In the short term the backlog may increase slightly, but as things settle out we will be able to make real progress on tackling the long-standing backlog growth. The efficiencies gained through new programs, new IT systems, and changes to how we work will enable us to recover quickly from any temporary transitional slowdown.

The VAC Wait time tool shows that the current average wait time for my type of application is ‘x’ number of weeks. Can you tell me how many more weeks will be added to my current wait time as a result of the transition to PFL?

We don’t know the full impact of the transition yet, but we do expect that some clients will be affected. That said, with the improvements made we will be able to recover quickly and focus on reducing processing times over the long-term.

When will you provide estimated wait times for the new PFL benefits (PSC, APSC, IRB)?

Once the Pension for Life programs are implemented, wait times for Pain and Suffering Compensation will be available as this program is part of the Disability Benefits program. When we’ve gathered sufficient data to report reliable estimates of average wait times for Additional Pain and Suffering and Income Replacement Benefit decisions (after 90 days), they will also be available.


Supplementary Retirement Benefit

What is the Supplementary Retirement Benefit?

This is a taxable, lump-sum benefit provided to individuals who were in receipt of Earnings Loss Benefits on a long term basis. It provided recognition of the lower pension plan contributions you may have made.

When will the Supplementary Retirement Benefit be paid out?

The Supplementary Retirement Benefit payouts will begin in late September 2019. We expect the majority of payments to be completed by the end of 2019.

Who will receive the payout?

In general, Veterans who were in receipt of the extended Earnings Loss Benefit and survivors who were in receipt of the Earnings Loss Benefit may qualify.

The following people will be entitled to receive the payout:

  • Veterans who were entitled to receive the Earnings Loss Benefit prior to 1 April 2019 due to a diminished earning capacity, and did not receive the Supplementary Retirement Benefit.
  • Surviving spouses, common-law partners or estates of deceased Veterans, who at the time of their death prior to 1 April 2019, were entitled to continue to receive the Earnings Loss Benefit because they had a diminished earning capacity, and did not receive the Supplementary Retirement Benefit.
  • Surviving spouses or common-law partners who were entitled to receive the Earnings Loss Benefit due to the service-related death of a Veteran or member prior to 1 April 2019, and did not receive the Supplementary Retirement Benefit.
  • The survivors or estate of a deceased surviving spouse or common-law partner, who was entitled to receive the Earnings Loss Benefit due to the service-related death of a Veteran or member prior to 1 April 2019, and did not receive the Supplementary Retirement Benefit.

Veterans or survivors may have received the Supplementary Retirement Benefit payments for some, but not all, of the periods of time for which they were eligible for the Earnings Loss Benefit. In these cases, Veterans or survivors will receive a Supplementary Retirement Benefit payout for those periods for which the Supplementary Retirement Benefit had not previously been paid.

Some Veterans, survivors, or estates of deceased Veterans may also receive Supplementary Retirement Benefit payments for periods of time which were previously paid out but did not take into account increases to the Canadian Armed Forces salary rates that came into effect 30 June 2017. The increased salary amounts were retroactive back to 1 April 2014 and increased the amount of an individual’s Earnings Loss Benefit.

How was the Supplementary Retirement Benefit calculated?

The Supplementary Retirement Benefit was equal to 2% of the sum total of all the Earnings Loss benefits payable to an eligible Veteran or survivor before any applicable income offsets.

As of 1 April 2019, the Supplementary Retirement Benefit was consolidated into the new Income Replacement Benefit. In light of this change, VAC will be making a one-time lump-sum payment equal to the Supplementary Retirement Benefit amount that a person would have been entitled to as of March 31, 2019.

Will I receive a letter with the details of my Supplementary Retirement Benefit payout?

Yes. You will receive a letter which will outline the amount of your payment.

When will I know how much I am entitled to receive?

We expect to start sending detailed letters in late September 2019 which will also include a detailed calculation sheet. We will release the letters in My VAC Account and send by mail as soon as they are finalized.

Why is it taking so long to pay the Supplementary Retirement Benefit payout?

When it came to implementing Pension for Life, our top priorities were to ensure that all Veterans with existing benefits were successfully converted to the new benefits, that monthly benefits were in place beginning 1 April 2019, and that there was no disruption to the regular payment schedule.

We are now focused on calculating and processing the high volume of Supplementary Retirement Benefit payouts.

Why can't you tell me what the amount is now? Pension for Life has been in place since April 1. Shouldn't you know by now what my SRB payout will be?

The financial calculations are complex and must be done for the more than 10,000 Veterans,. The calculations for each individual is unique and it's important to ensure it's accurate. That is why we are giving each file the attention to detail it deserves.

Is the Supplementary Retirement Benefit payout taxable?

Yes. It is required by law that the Supplementary Retirement Benefits payout be taxable.

Will the Supplementary Retirement Benefit payout affect my Income Replacement Benefit?

The Supplementary Retirement Benefit payout will not affect your Income Replacement Benefit.

Can I opt to split the Supplementary Retirement Benefit payment?

No, there will not be an option to split the payout. It will be paid directly to the eligible Veteran, surviving spouse / common-law partner or estate as a single lump-sum payment. This is what has been done with all payments of the Supplementary Retirement Benefit.

Is the Supplementary Retirement Benefit payout going to affect my income tax assessment?

Possibly. The Supplementary Retirement Benefit is a taxable benefit and must be reported as income. There may be options available to you to help reduce your taxable income if you have concerns about this payment’s impact on your income tax assessment. We recommend you contact your financial advisor for more information.

If you have questions about reporting lump-sum payments on your tax return, you can contact the Canada Revenue Agency (CRA) at 1-800-959-8281 (English) or 1-800-959-7383 (Français). You can find other options for contacting the CRA at canada.ca/en/revenue-agency/corporate/contact-information.

Are survivors eligible to receive the Supplementary Retirement Benefit payout?

Yes. Two groups of survivors are eligible:

  • Survivors of Veterans:
    • when the Veteran died prior to 1 April 2019; and
    • at the time of death, the Veteran was entitled to continue to receive the Earnings Loss Benefit due to a diminished earning capacity; and
    • the survivor did not already receive the Supplementary Retirement Benefit.
  • Survivors who were entitled to receive the Earnings Loss Benefit due to the service-related death of a Veteran or member prior to 1 April 2019, and did not receive the Supplementary Retirement Benefit.

I used to have a diminished earning capacity but that status was revoked. Am I still eligible for a Supplementary Retirement Benefit payout?

You may be eligible for the Supplementary Retirement Benefit payout if:

  • you were eligible for the Earnings Loss Benefit during the time that you had a diminished earning capacity; and
  • you have not already received the Supplementary Retirement Benefit.

If you meet the above criteria, you will receive a letter to this effect when they are issued, starting in late September 2019.

I was eligible for the Earnings Loss Benefit before 1 April 2019 and was deemed to have a diminished earning capacity after 1 April 2019, am I eligible for a Supplementary Retirement Benefit payout?

No, you would not be eligible for the payout as you did not have a diminished earnings capacity decision prior to 1 April 2019 that entitled you to receive the Earnings Loss Benefit on a long-term (extended) basis.

Is the Department doing anything about the future Veterans that would have received the Supplementary Retirement Benefit?

As of 1 April 2019, the Supplementary Retirement Benefit was consolidated into the new Income Replacement Benefit . The Income Replacement Benefit will ensure life long financial support for Veterans with a diminished earnings capacity decision prior to age 65.

What if I don’t receive a letter or payout in September?

If you are eligible to receive a Supplementary Retirement Benefit payout you will receive a letter and a payment. These letters will begin to be sent out at the end of September.

Clients who have already received the Supplementary Retirement Benefit and are not entitled to an additional payment or those who are not eligible for the payout will not receive a letter.

In some circumstances, payment calculations are more complicated and may take more time. We will process these as quickly as we can and will notify you if you are eligible for the payout. If we need more information from you will contact you.

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