Current Publications: Social affairs and population

Contents

• 1 Career Transition Services (Sections 3–5)
• 2 Rehabilitation Services, Vocational Assistance and Financial Benefits (Sections 6–41)
  
  • 2.1 Physical and Psycho-social Rehabilitation Programs and Vocational Assistance (Sections 8–17)
  • 2.2 Financial Benefits (Sections 18–41)
    
    • 2.2.1 Earnings Loss Benefit (Sections 18–24)
    • 2.2.2 Supplementary Retirement Benefit (Sections 25–26)
    • 2.2.3 Income Support Benefit (Sections 27–37)
    • 2.2.4 Permanent Impairment Allowance (Sections 38–40)
  • 2.3 Regulations (Section 41)
• 3 Disability, Death And Detention Benefits, and Clothing Allowance (Sections 42–65)
  
  • 3.1 Disability Award (Sections 45–56)
  • 3.2 Death Benefit (Sections 57–59)
  • 3.3 Clothing Allowance (Sections 60–62)
  • 3.4 Detention Benefit (Sections 64–65)
• 4 General (Sections 66–94)
• Notes

1 Introduction

The Canadian Forces Members and Veterans Re-establishment and Compensation Act,1 better known as the “New Veterans Charter,” was assented to on 13 May 2005 and came into force on 1 April 2006. The Charter sets out a new benefit plan for injured, disabled and deceased veterans and provides for professional physical rehabilitation for veterans and their families. It supersedes the previous plan, which was governed by the Pension Act,2 the first version of which was passed in 1919.

The main objective of the Charter is to foster the social and vocational re‑establishment of veterans. The types of service available, the amounts of certain allowances and details of the eligibility requirements are specified in the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations.3

Exclusive of the definitions and transitional provisions, the Charter is divided into four parts:

Part 1: Career Transition Services;

Part 2: Rehabilitation Services, Vocational Assistance and Financial Benefits;

Part 3: Disability, Death and Detention, which includes a section on clothing allowances; and

Part 4: General.

This publication gives a brief overview of each of these parts.

1 Career Transition Services (Sections 3–5)

Career transition services4 include three types of activity: workshops on practical subjects (producing a resumé, preparing for interviews, starting a business, etc.), personalized vocational assistance (skills analysis, career counselling, etc.) aimed at developing a transition plan, and job search assistance supported by a trainer.

In its December 2009 evaluation report, Veterans Affairs Canada acknowledged that the results of the career transition services program were disappointing. Between 1 April 2006 and 31 December 2009, 69 veterans completed the program, for a total expenditure of $3.6 million.5

The eligibility requirements for the program are:

• be a former member of the Canadian Forces, discharged or not discharged for medical reasons, whose status is governed by the Charter or the Pension Act;
• if the member of the Canadian Forces or the veteran is deceased, be the spouse or common-law spouse of the member or veteran; or
• be in need of assistance deemed necessary for re-establishment in civilian life.

The Minister of Veterans Affairs can refuse to provide the above-mentioned services to any veteran who is entitled to receive those services from a third party.

2 Rehabilitation Services, Vocational Assistance and Financial Benefits (Sections 6–41)

The eligibility requirements for rehabilitation services, vocational assistance and financial benefits (sections 6 and 7) are:

• be a former member of the Canadian Forces whose disease or injury was contracted, incurred or aggravated in a special duty area or during special duty operations, which roughly means any military operations in which the Canadian Forces have taken part in Canada or abroad since 1947, with the exception of the Korean War, for which there is separate legislation;
• be a member of the military discharged for medical reasons, even if the health problems are not service related; military members of the Reserve Force who were discharged because of a health problem that occurred while they were not on duty are excluded;
• have physical or mental health problems which, in the opinion of the Department, are a barrier to re-establishment in civilian life; or
• not be a veteran of the Second World War or the Korean War who is covered by a series of separate statutes now referred to collectively as the “Old Veterans Charter.”

2.1 Physical and Psycho-social Rehabilitation Programs and Vocational Assistance (Sections 8–17)

Participation in a rehabilitation program is an eligibility requirement for the financial benefits described in section 2.2, “Financial Benefits,” in this paper.

Programs are developed by the Department based on the specific needs of each veteran, and the regulations require that the services involve family members to the extent required to facilitate the rehabilitation. When they develop a program, the Minister’s representatives take into account the likelihood of an improvement in the veteran’s employment skills and aptitudes, the veteran’s motivation, and the availability, cost and length of the program under consideration.

Services are transferrable to the veteran’s spouse or survivors in the event of death or if the Department determines that the rehabilitation program will not be enough to enable the veteran to find “suitable gainful employment.” 6

On 31 December 2009, 3,156 veterans and 70 survivors were enrolled in a physical and psycho-social rehabilitation program and 791 veterans were enrolled in a vocational rehabilitation program. Between 1 April 2006 and 31 December 2009, 507 veterans or survivors completed the program, for a total expenditure of $12.8 million.

2.2 Financial Benefits (Sections 18–41)

Participation in a rehabilitation program is an eligibility requirement for the financial benefits available under the Charter: earnings loss benefit, supplementary retirement benefit, income support benefit and permanent impairment allowance.

2.2.1 Earnings Loss Benefit (Sections 18–24)

If the veteran is enrolled in a rehabilitation program, the earnings loss benefit, which is taxable, guarantees 75% of the gross income the veteran was earning at the time he or she was discharged from the Canadian Forces and that the amount will not be less than $40,000.7 The benefit is payable until the veteran is ready to perform “suitable gainful employment” appropriate to his or her skills or reaches the age of 65 years. Gross income from all other sources is deducted from the amount of the benefit. When the veteran dies, the benefit cannot be transferred to the spouse or survivors unless death was the result of a service-related disease or injury. The benefit is adjusted in accordance with the Consumer Price Index, to a maximum of 2%.

Between 1 April 2006, and 31 December 2009, 1,567 veterans, 67 survivors and 111 orphans received monthly earnings loss benefit payments, for a total expenditure of $54.4 million. During the same period, 1,703 other individuals were eligible but did not receive monthly payments because their income from all other sources was equal to or greater than the amount of benefits.

2.2.2 Supplementary Retirement Benefit (Sections 25–26)

Because veterans in receipt of the earnings loss benefit are not permitted to make contributions to a pension plan, the supplementary retirement benefit was established to make up for the difficulty veterans with a total and permanent incapacity have saving money.

The benefit is equal to 2% of the total amount of the earnings loss benefit for which the veteran was eligible during the entire time he or she was eligible (2% × 75% of gross income at the time of discharge multiplied by the number of months of eligibility prior to reaching the age of 65 years). The average benefit is estimated to be approximately $17,000, and the maximum benefit can be almost $40,000.8 The benefit is transferred to the spouse or survivors on the veteran’s death, is paid in a lump sum on what is or would have been the veteran’s 65th birthday and is taxable.

Since most veterans enrolled in a rehabilitation program are under the age of 50, it will be another few years before this benefit can be evaluated. By 31 December 2009, only one veteran had received it, for a total expenditure of $3,000.

2.2.3 Income Support Benefit (Sections 27–37)

The purpose of the income support benefit is to provide loss-of-income compensation for veterans who are once again employable ‒ and therefore are no longer receiving the earnings loss benefit ‒ but have yet to find a job. It is therefore support of last resort for low‑income veterans who have successfully completed a rehabilitation program.

The non-taxable benefit can be as much as $1,200 a month for a single person or $1,800 for a couple, plus $300 for each dependent child. The amount payable is based on the family’s income and is reduced in proportion to other household income. The income support benefit is being used less and less; in December 2009, only five veterans were in receipt of the benefit, for a total annual expenditure of $40,000.

2.2.4 Permanent Impairment Allowance (Sections 38–40)

A permanent impairment allowance may be paid to a veteran who has a “permanent and severe impairment.” 9 In 2011, a taxable amount of $543, $1,088 or $1,631 per month could be paid for life depending on the seriousness of the impairment.

In 2010, 16 veterans received a permanent impairment allowance.

Since October 2011, veterans who are receiving the permanent impairment allowance and are “totally and permanently incapacitated” 10 are eligible for a permanent impairment allowance supplement. The amount of the supplement is $12,000 per year.

2.3 Regulations (Section 41)

Sections 6 and 17 to 46 of the regulations define the key terms and set out the procedures for determining eligibility and calculating and modifying financial benefits.

3 Disability, Death And Detention Benefits, and Clothing Allowance (Sections 42–65)

Pursuant to section 85, only decisions made under Part 3 of the Charter can be reviewed by the Veterans Review and Appeal Board. Section 43 sets out a principle of interpretation whereby the applicant must be given the benefit of the doubt. However, that principle is subject to such rules of evidence as the government may establish by regulation under section 63.

3.1 Disability Award (Sections 45–56)

The purpose of a disability award is to provide compensation for pain and suffering caused by an injury or disease related to or aggravated by service. Awards can be paid to active military personnel as well as to veterans. They are calculated by multiplying the degree of disability (0% to 100%) by the maximum amount, which was set at $250,000 in 2005 and has been indexed ever since. The non-taxable maximum amount for 2011 is $285,319.47.

Before October 2011, disability awards were payable in a lump sum only. Military personnel and veterans are now able to receive a disability award in a single payment, annual payments or a combination of the two.

Between 1 April 2006 and 31 December 2009, 16,412 military personnel and veterans received a disability award, and 322 survivors received a death benefit.

3.2 Death Benefit (Sections 57–59)

A death benefit is payable if death occurs within 30 days after the injury, disease or aggravation that was the cause of death. The amount is the same as the maximum disability award. If death occurs more than 30 days after the injury, disease or aggravation, the 100% disability award takes the place of the death benefit.

3.3 Clothing Allowance (Sections 60–62)

The main purpose of the clothing allowance is to compensate for wear and tear of clothing caused by an amputation or any other type of disability that makes it necessary to wear special garments. The annual maximum is $2,000. Between 1 April 2006 and 31 December 2007, 227 veterans received a clothing allowance.

3.4 Detention Benefit (Sections 64–65)

A detention benefit is paid in a lump sum to a member of the Canadian Forces or a veteran who was detained by “(a) an enemy or an opposing force of Canada [or] (b) a person or a group that has as one of its purposes or activities the facilitating or carrying out of a terrorist activity” (section 64(2)). The amount paid depends on the number of days in detention and can reach a maximum of approximately $110,000. The benefit is transferrable to survivors. No military personnel or veterans have received a detention benefit since 1 April 2006.

4 General (Sections 66–94)

Part 4 authorizes the Minister to establish a group insurance program for veterans and designate “special duty” areas and operations; veterans of these operations could, in the event of disease or injury, be eligible for the benefits set out in Part 3. Part 4 specifies some of the Minister’s powers and defines the application process, the procedures for considering and reviewing applications, the right to inspect records, and the terms and conditions of information sharing. It establishes the procedure for recovery in the event of an overpayment or error and the legal and tax status of various items in the Charter. Finally, it lists other matters in respect of which the government is authorized to make regulations.

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Notes

†  Library of Parliament Background Papers provide in-depth studies of policy issues. They feature historical background, current information and references, and many anticipate the emergence of the issues they examine. They are prepared by the Parliamentary Information and Research Service, which carries out research for and provides information and analysis to parliamentarians and Senate and House of Commons committees and parliamentary associations in an objective, impartial manner. [ Return to text ]