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ACVA Committee Report

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The Canadian Forces Members and Veterans Re-establishment and Compensation Act,[1] better known as the New Veterans Charter (“the NVC”), came into force on 1 April 2006. It sets out a new benefit plan for injured, disabled and deceased veterans and provides for physical rehabilitation and vocational assistance for veterans and their families. It supersedes the previous plan, which was governed by the Pension Act,[2] the first version of which had been passed in 1919.

The main objective of the NVC 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] (“the Regulations”).

Exclusive of the definitions and transitional provisions, the NVC 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;
  • Part 4: General.

1. Career Transition Services (sections 3–5)

Career transition services (CTS)[4] are VAC programs that had some overlap with similar programs at DND. It was offered to CF members as they were getting ready for release. It included practical workshops, individual counselling services and job-finding assistance. A company that specializes in human resources, Right Management, was hired to manage the program. Since the program’s implementation, and despite positive feedback from those who used it, its participation rate had been generally low.[5]

As part of its program reform, VAC agreed with DND to stop providing its career transition services to serving CF members and not to renew its contract with Right Management. Since 1 October 2012, DND is the only organization to provide career transition services to serving CF members, and has partnered with a third party, Canada Company, on that.[6]

Effective January 1, 2013: “Eligible CF veterans or eligible survivors would receive up to a $1,000 lifetime maximum grant payment to support obtaining CTS. These recipients would have the flexibility to choose their CTS provider(s) and the type(s) of CTS of their choice to better meet their needs.”[7]

The eligibility requirements for the program are:

  • be a former member of the Canadian Forces, released or not for medical reasons, whose status is governed by the NVC 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 released for medical reasons, even if the health problems are not service related; military members of the Reserve Force who were released 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 the series of separate statutes now referred to collectively as the “Old Veterans Charter.”

a. 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 of the NVC.

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.”[8]

b. Financial benefits (sections 18–41)

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

(i) 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 released from the Canadian Forces and guarantees that the amount will not be less than $42,426.[9] 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. 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%.

(ii) 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 that 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 his or her entire period of eligibility (2% × 75% of gross income at the time of release 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.[10] 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.

(iii) 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 financial 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.

(iv) Permanent impairment allowance (sections 38–40)

A permanent impairment allowance (PIA) may be paid to a veteran who has a “permanent and severe impairment”.[11] The PIA has three grade levels for payment of the benefit: $1,725 (Level 1), $1,150 (Level 2) and $575 (Level 3).

Since October 2011, veterans who are receiving the permanent impairment allowance and are “totally and permanently incapacitated”[12] are eligible for a permanent impairment allowance supplement. The amount of the supplement is $1,057 per month.

(v) 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)

This is the only part of the NVC under which a veteran may seek a review or file an appeal with 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.

a. 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 2014 is $301,275.26.

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.

b. 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.

c. 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.

d. 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 NVC. Finally, it lists other matters in respect of which the government is authorized to make regulations.

[2]             Pension Act, R.S.C., 1985, c. P-6.

[4]             Prior to October 2011, career transition services were called “job placement services”.

[5]             Veterans Affairs Canada, New Veterans Charter Evaluation – Phase I, December 2009, Section 4.2.5.

[6]             Department of National Defence, Transition Assistance Program (TAP).

[7]             Regulations Amending the Veterans Health Care Regulations and the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations, “Regulatory Impact Analysis Statement”, Section 2.

[8]             Section 6 of the Regulations defines “suitable gainful employment” as employment for which the veteran is reasonably qualified and that provides a monthly rate of pay equal to at least two thirds of the amount the veteran earned prior to being released from the Canadian Forces.

[9]             Since October 2011, the minimum threshold set out in the Regulations has been $40,000, indexed annually; the provision applies to veterans who were members of the Regular Force at the time of release and members of the Reserve Force who were injured while serving in the Regular Force (Class C) or in support of Regular Force operations (Class B).

[10]           See the “Regulatory Impact Analysis Statement” attached to the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations.

[11]           Section 40 of the Regulations defines a “permanent and severe impairment” as:

               (a) an amputation at or above the elbow or the knee;

               (b) the amputation of more than one upper or lower limb at any level;

               (c) a total and permanent loss of the use of a limb;

               (d) a total and permanent loss of vision, hearing or speech;

               (e) a severe and permanent psychiatric condition;

               (f) a permanent requirement for the physical assistance of another person for most activities of daily living;

               (g) a permanent requirement for supervision.

[12]           Section 6 of the Regulations states:

               “totally and permanently incapacitated” means, in relation to a veteran, 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 to be suitable gainful employment.