Regulations Amending Certain Regulations (Department of Veterans Affairs): SOR/2018-177

Canada Gazette, Part II, Volume 152, Number 18

Registration

August 23, 2018

DEPARTMENT OF VETERANS AFFAIRS ACT
VETERANS WELL-BEING ACT

P.C. 2018-1049 August 22, 2018

Her Excellency the Governor General in Council, on the recommendation of the Minister of Veterans Affairs, makes the annexed Regulations Amending Certain Regulations (Department of Veterans Affairs) pursuant to

(a) section 5 footnote a of the Department of Veterans Affairs Act footnote b; and

(b) subsections 19(2) footnote c, 19.1(2) footnote d, 23(4) footnote e and 26.1(4) footnote f, sections 41 footnote g, 63 footnote h and 94 footnote i and subsections 131(5) and 132(2) footnote j of the Veterans Well-being Act footnote k.

Regulations Amending Certain Regulations (Department of Veterans Affairs)

Veterans Well-being Act

Veterans Well-being Regulations

Amendments

1 The Veterans Well-being Regulations footnote 1 are amended by adding the following after section 1:

1.1 For the purposes of Parts 2 and 3 of the Act, barrier to re-establishment in civilian life means the presence of a disability or a temporary or permanent physical or mental health problem that limits or prevents an individual’s reasonable performance in civilian life of their roles in the workplace, home or community.

2 The definition barrier to re-establishment in civilian life in subsection 6(1) of the Regulations is repealed.

3 Section 7 of the Regulations is repealed.

4 The portion of section 8 of the Regulations before paragraph (a) is replaced by the following:

8 For the purposes of subsection 10(4) and paragraph 13(4)(a) of the Act, the Minister shall have regard to the following principles:

5 The portion of section 9 of the Regulations before paragraph (a) is replaced by the following:

9 For the purposes of subsection 10(4) and paragraph 13(4)(a) of the Act, the Minister shall have regard to the following factors:

6 Section 10 of the Regulations is replaced by the following:

10 An application for rehabilitation services or vocational assistance shall be in writing and shall be accompanied by

7 The heading before section 17 and sections 17 to 19 of the Regulations are replaced by the following:

Income Replacement Benefit

17 (1) An application for an income replacement benefit shall be in writing and shall include

(2) For the purposes of paragraph 18(3)(a) of the Act, the information and documents referred to in subparagraphs (1)(a)(ii) to (iv) are the prescribed information.

17.1 (1) For the purposes of subsection 18(5) of the Act, the Minister shall, in determining whether the veteran has a diminished earning capacity that is due to a physical or mental health problem, require that the veteran undergo a vocational assessment and shall use the results of that assessment in making the determination.

(2) Despite subsection (1), the Minister may, in lieu of requiring that the veteran undergo the vocational assessment, make the determination based on medical reports or other records, information or documents available to the Minister, if he or she is of the opinion that those reports or records, information or documents are sufficient to make the determination.

18.01 For the purposes of sections 18 and 20, minimum amount means the minimum amount of imputed income of, or in respect of, a member or veteran that is set out in section 18.02.

18.02 Subject to section 21, the minimum amount referred to in sections 18 and 20 is $4,500 per month.

18 (1) For the purposes of subsection 19(1) of the Act, the imputed income of a veteran referred to in subsection 18(1) of the Act is equal to

(2) The value of the monthly military salary and of the minimum amount referred to in subsection (1) are determined on the date on which the benefit is payable and in each subsequent year, taking into account the adjustments referred to in subsections 21(1) and 21.1(1).

(3) For the purposes of subsection 115(2) of the Act, the imputed income that is taken into account in the determination of the benefit referred to in that subsection is equal to

(4) The value of the monthly military salary and of the minimum amount referred to in subsection (3) are determined on March 31, 2019, taking into account the adjustments referred to in subsection 21(1).

8 Sections 20 to 29 of the Regulations are replaced by the following:

20 (1) For the purposes of subsection 23(1) of the Act, the imputed income of a member referred to in subsection 22(1) of the Act is equal to

(2) The value of the monthly military salary and of the minimum amount referred to in subsection (1) are determined on the date on which the benefit is payable and in each subsequent year, taking into account the adjustments referred to in subsections 21(1) and 21.1(1).

(3) For the purposes of subsection 23(1) of the Act, the imputed income of a veteran referred to in subsection 22(1) of the Act is equal to

(4) The value of the monthly military salary and of the minimum amount referred to in subsection (3) are determined on the date on which the benefit is payable and in each subsequent year, taking into account the adjustments referred to in subsections 21(1) and 21.1(1).

(5) For the purposes of subsection 118(2) of the Act, the imputed income that is taken into account in the determination of the benefit referred to in that subsection is equal to

(6) The value of the monthly military salary and of the minimum amount referred to in subsection (5) are determined on March 31, 2019, taking into account the adjustment referred to in subsection 21(1).

21 (1) The monthly military salary and the minimum amount referred to in sections 18 and 20 shall be adjusted annually on January 1 in accordance with the percentage increase to the Consumer Price Index, rounded to the next 0.10%, for the year ending on October 31 of the previous year.

(2) The adjustments referred to in subsection (1) shall be made

(3) The amount determined for A in subsection 19.1(1) of the Act shall be adjusted annually on January 1 in accordance with the percentage increase to the Consumer Price Index, rounded to the next 0.10%, for the year ending on October 31 of the previous year, unless that amount has been replaced under subsection 99(4) or 115(3) of the Act.

(4) The income replacement benefit determined in accordance with subsection 26.1(1) of the Act shall be adjusted annually on January 1 in accordance with the percentage increase to the Consumer Price Index, rounded to the next 0.10%, for the year ending on October 31 of the previous year, unless that amount has been replaced under subsection 118(3) of the Act.

(5) The Consumer Price Index is the annual average all-items Consumer Price Index for Canada (not seasonally adjusted) published by Statistics Canada.

(6) For greater certainty, if the adjustments referred to in this section apply in respect of a period during a calendar year, that period is considered to be the calendar year for the purpose of that adjustment.

21.1 (1) The monthly military salary of a veteran referred to in subsection 18(7) of the Act and a member or veteran referred to in subsection 22(1) of the Act shall be adjusted annually on January 1, beginning at the time of release or on the date of completion or death of the member or veteran, as the case may be, in accordance with the formula

A + (A × B)

where

(2) The adjustments made to the monthly military salary under subsections 21(1) and 21.1(1) shall be made independently of one another.

(3) For greater certainty, if the adjustment referred to in subsection (1) applies in respect of a period during a calendar year, that period is considered to be the calendar year for the purpose of that adjustment.

(4) The adjustment referred to in subsection (1) shall not take effect, in respect of the amount of the income replacement benefit to be paid to a veteran, until the first day of the month in which the Minister determines under subsection 18(5) of the Act that the veteran has a diminished earning capacity that is due to a physical or mental health problem.

21.2 (1) For the purposes of paragraphs 19(3)(a) and 23(5)(a) of the Act, the prescribed number of years of service in the Canadian Forces is not more than 20 years and includes the number of years served by the veteran from the date of enrolment to the date of final release, without regard to periods of interrupted service, as well as any subsequent year after their final release.

(2) For the purpose of calculating years of service, one year is equal to 365.24 days, consecutive or not.

22 (1) The following sources are prescribed for the purpose of the determination of B in subsection 19(1) of the Act:

(2) Any amounts payable to a veteran for a dependent child or in respect of the veteran’s deceased spouse or common-law partner are not to be included under subsection (1).

(3) An amount set out in subsection (1) that is paid to a veteran, other than on a monthly basis, before April 1, 2019 shall cease to be an amount from a prescribed source on the first day of the month after the month in which the veteran attains the age of 65 years.

22.1 For the purposes of paragraph 22(1)(g), the following are taken into account in determining the annual employment income of a veteran referred to in subsection 19(1) of the Act:

23 (1) The following sources are prescribed for the purposes of subsection 23(3) of the Act in respect of a member or veteran referred to in paragraph 23(1)(a) of the Act:

(2) The following sources are prescribed for the purposes of subsection 23(3) of the Act in respect of a member or veteran referred to in paragraph 23(1)(b) of the Act:

(3) Any amounts payable to a survivor for a dependent child are not to be included under subsections (1) and (2).

(4) An amount set out in subsection (1) that is paid to a survivor, other than on a monthly basis, before April 1, 2019 shall cease to be an amount from a prescribed source on the first day of the month after the month in which the member or veteran, if alive, would have attained the age of 65 years.

24 (1) If, during a calendar year, an amount from a prescribed source referred to in subsection 22(1) or 23(1) or (2) is paid other than on a monthly basis, it shall be converted into an amount payable for a month by dividing the total amount paid from that source by 12 and

(2) If an amount from a prescribed source is paid to a veteran referred to in section 99 of the Act or to a survivor referred to in section 106 of the Act, other than on a monthly basis, before April 1, 2019, it shall be converted into a monthly payment in accordance with generally accepted actuarial principles.

24.1 (1) The following sources are prescribed for the purpose of the determination of B in subsection 19.1(1) of the Act:

(2) Any amounts payable to a veteran for a dependent child or in respect of the veteran’s deceased spouse or common-law partner are not to be included under subsection (1).

24.2 For the purposes of paragraph 24.1(1)(h), the following are taken into account in determining the annual employment income of a veteran referred to in subsection 19.1(1) of the Act:

24.3 (1) The following sources are prescribed for the purposes of subsection 26.1(3) of the Act:

(2) Any amounts payable to a survivor for a dependent child are not to be included under subsection (1).

24.4 If, during a calendar year, an amount from a prescribed source referred to in subsection 24.1(1) or 24.3(1) is paid other than on a monthly basis, it shall be converted into an amount payable for a month by dividing the total amount paid from that source by 12 and

25 (1) A person referred to in subsection 19(1) or paragraph 23(1)(a) of the Act who is entitled to an income replacement benefit shall

(2) A person referred to in subsection 19.1(1), paragraph 23(1)(b) or subsection 26.1(1) of the Act who is entitled to an income replacement benefit shall

25.1 (1) For the purposes of section 21 of the Act, the Minister may suspend the payment of an income replacement benefit to a veteran who fails to do either of the following until the situation that gave rise to the suspension is resolved:

(2) For the purposes of section 26.2 of the Act, the Minister may suspend the payment of an income replacement benefit to a person who is entitled to that benefit if they fail to provide the information or documents required under section 25 until the information and documents are provided.

(3) Before suspending the payment of the income replacement benefit, the Minister shall provide the person with written notification of the reasons for the suspension and the effective date of the suspension.

26 (1) For the purposes of sections 21 and 26.2 of the Act, the Minister may cancel the payment of an income replacement benefit if

(2) On cancelling the payment of the income replacement benefit, the Minister shall provide the person with written notification of the reasons for the cancellation, the effective date of the cancellation and their rights of review.

9 Paragraph 31(a) of the Regulations is replaced by the following:

10 Paragraph (c) of the definition income in section 36 of the Regulations is replaced by the following:

11 Paragraph 37(a) of the Regulations is replaced by the following:

12 The heading before section 40 and sections 40 to 46.8 of the Regulations are repealed.

13 Sections 53 to 54.3 of the Regulations are replaced by the following:

53 A member or veteran who is in receipt of pain and suffering compensation shall, at the Minister’s request, provide medical reports or other records or any other information or documents that are necessary to enable the Minister to assess the member’s or veteran’s continued eligibility for the compensation or the extent of the member’s or veteran’s disability or to determine the amount of the compensation payable.

53.1 (1) For the purposes of section 52.1 of the Act, the Minister may suspend the payment of pain and suffering compensation to a member or veteran who fails to provide the information or documents required under section 53 until the information and documents are provided.

(2) Before suspending the payment of pain and suffering compensation to a member or veteran, the Minister shall provide the member or the veteran with written notification of the reasons for the suspension and the effective date of the suspension.

53.2 (1) For the purposes of section 52.1 of the Act, the Minister may cancel the payment of pain and suffering compensation if

(2) On cancelling the payment of pain and suffering compensation, the Minister shall provide the member or the veteran with written notification of the reasons for the cancellation, the effective date of the cancellation and the member’s or veteran’s rights of review.

53.3 For the purposes of subsection 53(1) of the Act, a member or veteran may elect to receive the pain and suffering compensation as a lump sum by notifying the Minister in writing of their election.

53.4 (1) The following sources are prescribed for the purposes of section 56.3 of the Act:

(2) For the purposes of section 56.3 of the Act, the amount by which the Minister may reduce the pain and suffering compensation that is payable monthly to a member or veteran is the lesser of

(3) For the purposes of section 56.3 of the Act, the amount by which the Minister may reduce the pain and suffering compensation that is payable as a lump sum to a member or veteran is the lesser of

(4) If the pain and suffering compensation paid to a member or veteran was reduced in accordance with subsection (2) or (3) and, at the time of the member’s or veteran’s death, the total amount of the reduction exceeds the total amounts received from the prescribed source, the reduction in the pain and suffering compensation shall be redetermined in accordance with subsection (2) or (3) with the references in paragraphs (2)(a) and (3)(a) to the amount that is payable from the prescribed source being replaced with references to the total amount received by the member or veteran from the prescribed source before death.

(5) If the redetermination under subsection (4) results in a smaller reduction of pain and suffering compensation than was previously determined under subsection (2) or (3), the difference between the two amounts is to be paid to the member’s or veteran’s survivor or dependent children in the manner set out in section 56.1 of the Act.

Additional Pain and Suffering Compensation

54 For the purposes of section 56.6 of the Act, a permanent and severe impairment is

54.1 For the purposes of subsection 56.6(4) of the Act, the assessment of the extent of the veteran’s permanent and severe impairment shall be based on any relevant factor, including

54.2 An application for additional pain and suffering compensation or for a reassessment of the extent of the veteran’s permanent and severe impairment shall include medical reports or other records that document the veteran’s disability that is creating the permanent and severe impairment and the barrier to re-establishment in civilian life.

54.3 A veteran who is in receipt of additional pain and suffering compensation shall, at the Minister’s request, provide medical reports or other records or any other information or documents that are necessary to enable the Minister to assess the veteran’s continued eligibility for the compensation or the extent of the veteran’s permanent and severe impairment.

54.4 (1) For the purposes of section 56.8 of the Act, the Minister may suspend the payment of additional pain and suffering compensation to a veteran who fails to do either of the following until the situation that gave rise to the suspension is resolved:

(2) Before suspending the payment of additional pain and suffering compensation to a veteran, the Minister shall provide the veteran with written notification of the reasons for the suspension and the effective date of the suspension.

54.5 (1) For the purposes of section 56.8 of the Act, the Minister may cancel the payment of additional pain and suffering compensation if

(2) On cancelling the payment of additional pain and suffering compensation, the Minister shall provide the veteran with written notification of the reasons for the cancellation, the effective date of the cancellation and the veteran’s rights of review.

14 Sections 57 and 58 of the Regulations are replaced by the following:

57 (1) For the purposes of subsection 58(2) of the Act, the prescribed sources are those set out in subsection 53.4(1).

(2) For the purposes of subsection 58(2) of the Act, the amount by which the Minister may reduce the death benefit is the lesser of

15 The portion of section 61 of the Regulations before paragraph (a) is replaced by the following:

61 A detention benefit shall be paid as a lump sum in an amount equal to the amount set out in column 4 of Schedule 3 to the Act, as adjusted in accordance with section 63.1, for each of the following rates of pain and suffering compensation set out in column 1 of that Schedule:

16 The portion of section 62 of the Regulations before paragraph (a) is replaced by the following:

62 A person to whom an amount is paid or payable under any of sections 100 to 103 of the Budget Implementation Act, 2016, No. 1, or who receives a critical injury benefit, a detention benefit, a death benefit, a disability award equal to or greater than the amount set out in column 3 of Schedule 3 to the Act as it read immediately before April 1, 2019, as adjusted in accordance with section 63.1, that corresponds to a rate of award of 5% set out in column 1 of that Schedule, or pain and suffering compensation equal to or greater than the amount set out in column 3 of Schedule 3 to the Act, as adjusted in accordance with section 63.1, that corresponds to a rate of pain and suffering compensation of 5% set out in column 1 of that Schedule, is eligible, on application, for the payment or reimbursement of fees for financial advice, to a maximum of $500, relating to the amount, award or benefit if

17 Subsection 63.1(1) of the Regulations is replaced by the following:

63.1 (1) The amounts set out in items 2.2 and 3, column 2, of Schedule 2 to the Act and all the amounts in columns 3 and 4 of Schedule 3 to the Act and column 2 of Schedule 4 to the Act shall be adjusted annually on January 1 in accordance with the percentage increase to the Consumer Price Index, rounded to the next 0.10%, for the year ending on October 31 of the previous year.

18 The Regulations are amended by replacing “disability awards” and “a disability award” with “pain and suffering compensation”, with any necessary modifications, in the following provisions:

Transitional Provisions

19 For the purposes of section 131 of the Veterans Well-being Act, sections 54.1 to 54.3 of the Veterans Well-being Regulations, as they read immediately before April 1, 2019, continue to apply, with all references in those provisions to the Act being read as references to the former Act, as defined in section 130 of the Act.

20 For the purposes of subsection 132(1) of the Veterans Well-being Act, the number referred to in the description of D is to be determined in accordance with generally accepted actuarial principles for the purpose of converting the lump sum represented by B – C, as described in that subsection, into a monthly annuity payable over the life of the member or veteran and in the same manner as pain and suffering compensation that is paid or payable monthly, based on the following assumptions:

Department of Veterans Affairs Act

Veterans Health Care Regulations

21 (1) The definition entitled to a disability award in respect of special duty service in section 2 of the Veterans Health Care Regulations footnote 2 is repealed.

(2) The definition entitled to a disability award in section 2 of the Regulations is replaced by the following:

entitled to a disability award means, in respect of a member or former member, that the member or former member

(3) Section 2 of the Regulations is amended by adding the following in alphabetical order:entitled to a disability award or pain and suffering compensation in respect of special duty service means, in respect of a member or former member, that the injury or disease, or its aggravation, for which the member or former member is entitled to a disability award or entitled to pain and suffering compensation is attributable to or was incurred during special duty service as defined in subsection 2(1) of the Veterans Well-being Act; (droit à une indemnité d’invalidité ou à une indemnité pour douleur et souffrance en raison du service spécial)

entitled to pain and suffering compensation means, in respect of a member or former member, that the member or former member

22 The Regulations are amended by replacing “entitled to a disability award” with “entitled to a disability award or entitled to pain and suffering compensation” in the following provisions:

23 The Regulations are amended by replacing “entitled to a disability award ” with “entitled to a disability award or pain and suffering compensation ” in the following provisions:

Veterans Burial Regulations

24 (1) The definition entitled to a disability award in section 1 of the Veterans Burial Regulations footnote 3 is replaced by the following:

entitled to a disability award means, in respect of a person, that the person

(2) Section 1 of the Regulations is amended by adding the following in alphabetical order:

entitled to pain and suffering compensation means, in respect of a person, that the person

25 Paragraph 9(6)(a) of the Regulations is replaced by the following:

26 The Regulations are amended by replacing “entitled to a disability award” with “entitled to a disability award or entitled to pain and suffering compensation” in the following provisions:

Coming into Force

27 (1) Subject to subsection (2), these Regulations come into force on April 1, 2019, but if they are registered after that day, they come into force on the day on which they are registered.

(2) Section 3 comes into force on April 1, 2024.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Legislative changes to the Veterans Well-being Act have been made to create the new pension for life (PFL) benefit package, and the corresponding regulatory changes must also be made for the new PFL benefits to take effect.

Background

In 2006, Veterans Affairs Canada (VAC) introduced the Canadian Forces Members and Veterans Re-establishment and Compensation Act (CFMVRC Act) and the supporting Canadian Forces Members and Veterans Re-establishment and Compensation Regulations (CFMVRC Regulations) to respond to the evolving and changing needs of Canadian Armed Forces (CAF) members, veterans and their families as they transition to post-service life. The benefit design was based on the principles of well-being, independence and modernized compensation. In keeping with the principles of modern disability management, the suite of benefits introduced a dual award approach (economic and non-economic compensation). Since 2006, numerous improvements to the suite of benefits have been made in response to recommendations by veterans, parliamentary committees, veterans’ organizations, the Office of the Veterans Ombudsman, as well as VAC’s own research and evaluations. On April 1, 2018, the CFMVRC Act and CFMVRC Regulations were renamed the Veterans Well-being Act (the Act) and the Veterans Well-being Regulations (the Regulations).

The current suite of economic benefits includes earnings loss benefit (ELB), Canadian Forces income support benefit (CFIS), supplementary retirement benefit (SRB), retirement income security benefit (RISB), career impact allowance (CIA) and CIA supplement (CIAS). These benefits compensate eligible veterans (and, in certain cases, eligible survivors footnote 4 and orphans) for the economic losses related to career-ending and service-related health issues.

The current suite of non-economic benefits includes disability award (DA), death benefit, critical injury benefit (CIB), detention benefit and clothing allowance. These benefits recognize and compensate eligible CAF members and veterans (and, in certain cases, eligible survivors and those who at the time of the CAF member’s or veteran’s death are dependent children) for the non-economic impacts of a service-related injury, detention, disability or death (e.g. pain and suffering, physical and/or psychological loss, functional impairment, and the impact on overall quality of life).

These benefits have resulted in increased compensation for some CAF members, veterans and their families; however, the combined package has fallen short of expectations. There are two main shortcomings with the current suite of benefits: (1) the additions and adjustments to the original suite of benefits since 2006 have rendered it complex and difficult to understand, and have created some unintended consequences; and (2) veterans have clearly articulated that they want choice and flexibility in how they receive their disability benefits, particularly when it comes to the lump sum DA.

As a result, on December 20, 2017, Minister O’Regan announced the PFL benefit package. The PFL package is a combination of benefits that provide recognition, income support, and better overall support and stability for disabled CAF members and veterans and their families as they transition to post-service life. The creation of the new PFL benefit package will be implemented through amendments to the Act and the Regulations.

Statutory amendments to the Act were made through the Budget Implementation Act, 2018, No. 1 (Bill C-74) and received royal assent on June 21, 2018. On April 1, 2019, the new benefits will come into force, replacing some existing economic and non-economic benefits, while other benefits (i.e. CFIS, death benefit, CIB, detention benefit and clothing allowance) will remain. The result will be a more comprehensive package to assist CAF members, veterans and their families transition to post-service life.

The new benefits are as follows:

Pain and Suffering Compensation (PSC) — This non-taxable benefit will replace the lump sum DA with a monthly payment to recognize the non-economic effects of service-related disability, footnote 5 including pain and suffering; physical and/or psychological loss; functional impairment and impact on the CAF member’s or veteran’s overall quality of life; and the impact on the lives of the CAF member’s or veteran’s family (that is, their surviving spouse or common-law partner and dependent children).

The PSC will retain some of the same design components as the DA (e.g. eligibility, entitlement, assessment of the extent of disability, application requirements); however, it will introduce a monthly payment model where eligible recipients receive monthly compensation in an amount up to $1,150 for 100% disability (the actual amount received depends on the extent of the disability), indexed annually based on changes in the Consumer Price Index (CPI). The veteran will receive this monthly payment for the rest of their life.

Recipients can opt to cash out the monthly amount at any time for a lump sum and receive the residual amount, if any. This would be the difference between the amount of the lump sum PSC at the time of the CAF member’s or veteran’s election to cash out, and the number of monthly payments already received, multiplied by the monthly rate at the time of the election (the maximum lump sum in 2018 was $365,400).

If a veteran receiving monthly PSC payments dies, the residual amount, if any, will be paid as a lump sum to the survivor and/or those who are, at the time of the veteran’s death, dependent children. As is the case with the DA, survivors and dependent children will be able to apply for the lump sum PSC for a disability for which the CAF member or veteran could have applied before their death.

The new PSC payment model will incentivize eligible CAF members and veterans to receive the monthly payment for life instead of opting to cash it out as a lump sum amount, as the amount received over the recipient’s lifetime could exceed the lump sum PSC amount. While designed to provide ongoing recognition, the monthly payment will also contribute to financial security and recognizes that veterans want choice in how to receive benefits.

CAF members and veterans who received a DA from April 1, 2006, to March 31, 2019, may also be able to benefit from the introduction of the PSC, as they may be eligible to receive an additional monthly amount as well. This amount will be automatically calculated and will take into consideration the amount of the DA previously paid to the CAF member or veteran and the amount of PSC they would have received if the monthly option had been available all along. The difference will be converted to an amount paid monthly over the course of the CAF member or veteran’s life in order to determine the amount of the additional monthly payment.

Additional Pain and Suffering Compensation (APSC) — This non-taxable benefit will recognize CAF veterans who are experiencing barriers to re-establishment in post-service life due to a service-related permanent and severe impairment. footnote 6 The permanent and severe impairment must be created by one or more disabilities for which the veteran has received a DA or PSC under the Veterans Well-being Act or a disability pension under the Pension Act.

Compensation is payable monthly at three grade levels (Grade 1: $1,500/month; Grade 2: $1,000/month; Grade 3: $500/month), with the grade level determined by the extent of the veteran’s impairment. These amounts will be indexed annually according to the CPI. The new benefit will be payable to veterans for life, as long as the eligibility criteria continue to be met.

Veterans in receipt of a CIA for service-related permanent and severe impairments on March 31, 2019, will automatically receive the APSC; their grade level will be protected and they will be paid the corresponding APSC amount.

Income Replacement Benefit (IRB) — This taxable benefit will replace the ELB, CIA, CIAS, SRB and RISB with one, simpler economic benefit. Veterans under age 65 who have a health problem resulting primarily from service that is causing a barrier to re-establishment in post-service life footnote 7 will be required to participate in the VAC Rehabilitation Services and Vocational Assistance Program in order to receive IRB. The IRB will recognize and compensate veterans, and in some cases, survivors and orphans, for the economic impacts that health problem(s) resulting primarily from service have on a veteran’s ability to earn income and save for retirement. The objective is to provide the veteran with replacement income to relieve financial pressures and allow for the veteran to successfully complete rehabilitation and return to work. The IRB benefit will cease to be payable at the completion of their Rehabilitation Plan or age 65 (whichever is earlier). However, if VAC determines that the veteran has a diminished earning capacity footnote 8 prior to age 65, they can receive IRB for life at a reduced amount beginning at age 65.

IRB payment amounts will be based on the greater of 90% of the veteran’s monthly military salary, indexed forward to the current year, or 90% of a minimum amount comparable to the threshold for the middle-class tax bracket (minimum threshold is $54,000 × 90% = $48,600). These amounts will be indexed annually based on changes in the CPI. The benefit will then be offset by any income sources as prescribed (outlined) in the Regulations, such as amounts payable under the Canadian Forces Superannuation Act.

To encourage veterans to participate in the work force and thereby improve their well-being, veterans may earn up to $20,000 in annual employment income before any employment income is offset from the amount payable.

Veterans in the Rehabilitation Services and Vocational Assistance Program who, before reaching age 65, have been determined to have a diminished earning capacity (based on an assessment) will be eligible for IRB for life. Veterans with a diminished earning capacity will also have their salary adjusted by 1% every year until they reach what would have been 20 years of service or age 60, whichever is earlier. This career progression factor will benefit those individuals who have health problems resulting primarily from service and, as a result, must leave the military early in their careers, thereby losing career advancement opportunities in the military. After the veteran reaches the age of 65, the IRB will be reduced to 70% of the pre-age-65 amount, less any offsets. This approach is consistent with VAC’s current retirement income support benefit (RISB) which is calculated by taking 70% of the ELB that was payable at age 65, less any offsets. The majority of retirement income supports from government programs start at age 65.

In the case of a CAF member or veteran’s service-related death prior to age 65, their survivors and orphans will be eligible for the same IRB that the CAF member or veteran could have received until age 65. After the date the CAF member or veteran would have turned 65, the survivors and orphans will be provided with 70% of the IRB to which the veteran would have been entitled after age 65 for life. Survivors and orphans of a veteran in receipt of IRB who die of a non-service-related death after age 65 will also receive 70% of the veteran’s post-65 IRB payment. If the 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).

Veterans, survivors and orphans who are receiving ELB, RISB, and/or the CIAS on March 31, 2019, will have these amounts protected and indexed annually, until equal to or less than the IRB amount payable. Those entitled to continued ELB on March 31, 2019, will receive a lump sum payment equal to the SRB amount they will be entitled to on that date. Those who had been entitled to receive continued ELB but were no longer entitled to that benefit and have not received the SRB to which they are entitled will also receive a lump sum payment.

Rehabilitation Services and Vocational Assistance — As part of these changes, Rehabilitation Services and Vocational Assistance eligibility will be limited to those who have service-related rehabilitation needs resulting primarily from service. This change will be phased in over time. On April 1, 2019, new applicants whose reason for medical release was not for health problems resulting primarily from service will be limited to medical and psychosocial rehabilitation supports. These veterans already have vocational rehabilitation services and income support eligibility through the CAF’s Long-term Disability Program (CAF-LTD). On April 1, 2024, Rehabilitation Services and Vocational Assistance applicants will need to have a health problem that is resulting primarily from service to be eligible. Those with a rehabilitation plan already in place will be permitted to complete it.

Taken together, the new PFL benefit package will

Objectives

The objective of these regulatory amendments is to supplement the legislative changes in the Veterans Well-being Act, which have created the new PFL benefits. These amendments include

Description

Unless otherwise stated, all the amendments to the Regulations are to come into force on April 1, 2019.

Pain and Suffering Compensation (PSC) — The Regulations have been amended to support the creation of the PSC by updating and/or specifying certain information and requirements necessary for the provision of this new benefit. As an example, sections in Part 3 of the Regulations related to the DA have been replaced by new provisions, entitled “Pain and Suffering Compensation,” to be consistent with the new sections of the same name being added to Part 3 of the Act.

As the PSC has some of the same program components as the DA, regulatory provisions related to application requirements, service-relationship and annual adjustments (i.e. increases to the CPI) have been amended to reference the PSC instead of the DA, with annual adjustments applying to both the monthly and lump sum PSC amounts. Conversely, other regulatory provisions (e.g. those that speak to the election for annual DA payments and the provision of financial advice) continue to apply to a person who received a DA before the coming-into-force date of the PSC. In addition, the Regulations have been amended to include the PSC under the financial advice provision.

A main difference between the PSC and the DA is that the new benefit introduces a monthly payment for life model, with the option to cash the monthly payment out as a lump sum amount. As a result, the Regulations set out that a CAF member or veteran may elect to receive their monthly PSC as a lump sum amount, by notifying VAC in writing of this election.

The Regulations also include a requirement for a CAF member or veteran in receipt of the PSC to provide, on request, medical reports, other records or any other information necessary to assess their continued eligibility for the PSC, the extent of their disability or the amount of the benefit payable.

To ensure that VAC has the ability to administer the PSC as intended, the Regulations include a provision where the PSC may be suspended if this information (to assess continued eligibility, extent of disability or the amount payable) is not provided. The PSC payment may be cancelled if the situation that gave rise to the suspension of the payment of pain and suffering compensation is not resolved within six months or, if their eligibility for the PSC, the extent of their disability or the determination of the amount payable was based on misrepresentation or concealment of a material fact. The Regulations also include VAC’s responsibility to provide written notification to the CAF member or veteran of the reasons for, and the effective date of, the suspension or cancellation, and the CAF member’s or veteran’s right to have the cancellation decision reviewed (under section 84 or 85 of the Act), consistent with review rights for other benefits under Part 3 of the Act.

Sections 53 to 54.3 of the Regulations, which set out how the DA amount is reduced when compensation from other sources has been paid in respect of the same disability, have been replaced with similar provisions for the PSC. For instance, the other sources of compensation for the PSC are the same as those for the DA, with the amount of the reduction being the lesser of either the amount of the other source of compensation or the amount of the PSC. In situations where the other source of compensation and the PSC are paid in different manners (e.g. lump sum versus monthly), the payment of the other source of compensation is notionally converted in accordance with generally accepted actuarial principles to the same manner of payment as the PSC being reduced. Also, where the amount of the reduction needs to be re-determined (such as when a CAF member or veteran dies), it is also done in accordance with generally accepted actuarial principles.

As with the PSC, the death benefit amount is reduced when compensation from other sources is paid in respect of the death. The Regulations have been amended so that the other sources of compensation for the death benefit are the same as those for the PSC, with the amount of the reduction being the lesser of either the amount of the other source of compensation or the amount of the death benefit. Where the payment of the other source of compensation is something other than a lump sum amount (as is how the death benefit is paid), it is notionally converted into a lump sum amount, in accordance with generally accepted actuarial principles.

A CAF member or veteran who received a DA since 2006 may also benefit from the PSC with the provision of an additional monthly amount. The formula to determine this additional monthly amount is set out in the Act, with one aspect of the formula, described as “D,” determined in accordance with the Regulations. This “D” is used for the purpose of converting a lump sum amount in the formula into a monthly annuity, and is determined in accordance with generally accepted actuarial principles based on certain assumptions (i.e. interest rates, inflation rates, and mortality rates).

Amendments to both the Veterans Health Care Regulations and the Veterans Burial Regulations are necessary to include eligibility for CAF members or veterans who are entitled to the PSC, similar to those entitled to a DA.

Additional Pain and Suffering Compensation (APSC) — This new section in the Regulations entitled “Additional Pain and Suffering Compensation” has been added to Part 3 of the Regulations, to be consistent with the new section of the same name that has been added to the Act. The regulatory amendments support the establishment of the APSC by specifying certain information and requirements necessary for the provision of the benefit.

APSC application requirements (to help determine eligibility, or for a reassessment of the extent of the permanent and severe impairment) have been set out in the Regulations and include medical reports or other records that document the veteran’s disability that is creating the permanent and severe impairment, and the barrier to re-establishment in civilian life. Existing application requirements in Part 3 (i.e. a declaration attesting to the truth of the information provided, as well as any other information that may be necessary to determine eligibility or the amount to be paid) also apply to APSC applications.

The Regulations set out what constitutes a “permanent and severe impairment,” being

For the purpose of assessing the extent of the permanent and severe impairment, the Regulations also set out that the assessment is to be based on any relevant factors including the need for institutional care; the need for supervision and assistance; the degree of the loss of use of a limb; the frequency of the symptoms; and the degree of psychiatric impairment.

The definition of “barrier to re-establishment in civilian life” in the Regulations has been amended to reference the veteran’s disability, such that it is “the presence of a disability or a temporary or permanent physical or mental health problem that limits or prevents an individual’s reasonable performance in civilian life of their roles in the workplace, home or community.” This definition is relevant to the eligibility requirements of the APSC, IRB and Rehabilitation Services and Vocational Assistance.

The Regulations also include a requirement for a veteran in receipt of the APSC to provide, on request, medical reports, other records or any other information necessary to assess their continued eligibility for the APSC or the extent of their permanent and severe impairment.

To ensure that VAC has the ability to administer the APSC, while ensuring a veteran receives the benefit to which they are entitled, the Regulations include a provision where the APSC payment may be suspended if either this information (to assess continued eligibility or the extent of the permanent and severe impairment) is not provided, or if the veteran does not undergo a medical examination or an assessment (as required by VAC under section 56.7 of the Act). The APSC payment may be cancelled if the situation that gave rise to the suspension of the payment of additional pain and suffering compensation is not resolved within six months or, if their eligibility for the APSC or the extent of their permanent and severe impairment was based on misrepresentation or concealment of a material fact. The Regulations also include VAC’s responsibility to provide written notification to the CAF member or veteran about the reasons for, and the effective date of, the suspension or cancellation, and the veteran’s right to have the cancellation decision reviewed (under section 84 or 85 of the Act), consistent with review rights for other benefits under Part 3 of the Act.

Lastly, to reflect cost of living increases, the Regulations provide for the APSC amount to be adjusted annually each January 1, according to the increase in the CPI, consistent with annual adjustments for other benefits under the Act.

Income Replacement Benefit (IRB) — The Regulations have been amended to support the creation of the IRB. Various provisions in the Regulations related to the ELB, SRB, RISB, CIA and CIAS have been repealed or replaced by new provisions, entitled “Income Replacement Benefit,” to be consistent with the new sections of the same name being added to Part 2 of the Act.

IRB application requirements (to determine eligibility or the amount to be paid) have been set out in the Regulations. For a veteran, these include information necessary to determine their assessed income (called imputed income in the Regulations) and amounts received from prescribed sources (details of both being further described in this document); medical reports or other documentation necessary to establish the existence of a health problem, its relationship to service and the resulting barrier to re-establishment; and any other information about the veteran’s health problem they consider pertinent to support their application. For a survivor or orphan, an IRB application must include a copy of the CAF member’s or veteran’s death certificate. For a survivor or orphan of a CAF member or veteran who dies before age 65 of a service-related death, an IRB application must also include information necessary to determine the CAF member’s or veteran’s imputed income and the amounts the survivor will receive from prescribed sources; and medical reports and other documentation about the CAF member’s or veteran’s injury or disease, diagnosis and cause of death. All IRB applications require a declaration attesting to the truth of the information provided, as well as any other information that may be necessary to determine eligibility or the amount payable.

The Regulations also set out the information which must be received from the veteran to determine the earliest possible date the IRB begins to be payable to the veteran.

Veterans who are determined as having a diminished earning capacity are eligible to receive IRB for life. The manner for determining this has been set out in the Regulations and requires a veteran to undergo a vocational assessment, the results of which will be used to make the determination. However, in lieu of requiring that the veteran undergo a vocational assessment, the determination may also be made based on medical reports or other records or documents available to VAC, if sufficient information exists within these documents to make the determination.

The Regulations set out the method of calculating the veteran’s imputed income, including for survivor and orphan purposes, using either the monthly military salary or the minimum amount, set at $4,500 per month ($54,000 per year) in 2019. Both of these amounts are subject to annual adjustments (i.e. increases in the CPI). Also, section 19 of the Regulations, which sets out the imputed income calculation for a specific group of veterans has been repealed. This group is no longer eligible to receive IRB, as a result of changes made to the Act, and therefore the imputed income calculation is not needed.

The Regulations also set out that veterans who have been determined to have a diminished earning capacity have an additional annual adjustment (independent of the CPI annual adjustment), called a career progression factor that is applied to their monthly salary. This career progression factor increases their monthly salary each year by 1%, until the earlier of the equivalent of 20 years of service, or age 60. Where applicable, eligible survivors and orphans of CAF members and veterans will also benefit from this provision. To determine when the career progression factor will be applied, the Regulations include how years of military service are calculated for CAF members and veterans to ensure that each period of service is included in the calculation, regardless if the service was continuous or not.

The Regulations also set out the prescribed sources (income sources to be considered when calculating the IRB amount payable) referred to in the formulas set out in the Act. The total amount of these prescribed sources are offset (or subtracted) from the total amount of the IRB to be paid.

For a veteran who is under age 65 (and in the month the veteran turns 65), prescribed sources include

For a veteran who is 65 and over, prescribed sources are the same as those above, excluding any amounts payable in respect of economic loss arising from legal liability to pay damages.

Any of these amounts payable to a veteran for a dependent child, or in respect of the veteran’s deceased spouse or common-law partner, are not considered a prescribed source.

For a survivor of a CAF member or veteran who dies before age 65, prescribed sources (payable to the survivor in respect of the CAF member or veteran) include

For a survivor of a CAF member or veteran (starting when the CAF member or veteran would have turned 65), and a survivor of a veteran who dies on or after age 65, prescribed sources (payable to the survivor in respect of the CAF member or veteran) are the same as those for a survivor of a CAF member or veteran who dies before 65, excluding amounts payable in respect of economic loss arising from a legal liability to pay damages, but including benefits payable under the Old Age Security Act as offsets.

Any of these amounts payable to a survivor for a dependent child are not considered a prescribed source. There are no prescribed sources considered in the calculations for the amounts to be paid to eligible orphans.

The Regulations also set out the method to convert any amounts from prescribed sources that are paid other than a monthly amount, into a monthly amount, as dividing the total amount of the prescribed source by 12. The exception to this is a veteran or survivor transitioning from the ELB to the IRB who has an offset already in place using a different conversion calculation. In these situations, the different conversion calculation continues to apply to this offset. Should the veteran or survivor start to receive a new payment, not previously divided, that amount is to be converted into a monthly amount by using the new calculation (i.e. dividing by 12).

As mentioned previously, to reflect the cost of living increases, the Regulations include annual adjustments to the monthly salary and the minimum amount (adjusted each January 1, according to the increase in the CPI, consistent with annual adjustments for other benefits under the Act). Where applicable, the imputed income amount and the IRB amount are also subject to this annual adjustment.

To assess continued IRB eligibility, or determine the amount payable, the Regulations set out the following information a veteran under the age of 65, or a survivor or orphan of a CAF member or veteran who died before 65, must provide VAC:

Veterans who are 65 and over and survivors/orphans of veterans who died on or after age 65 (or when the CAF member or veteran would have turned 65), must provide VAC the following:

To ensure VAC has the ability to administer the IRB as intended and is consistent with other benefits, the Regulations include the circumstances where the IRB payment may be suspended or cancelled. Should a person not provide the required information (to assess continued IRB eligibility or the amount payable), or should a veteran not participate in the development and implementation of a rehabilitation plan (as required by VAC under paragraph 18(2)(b) of the Act), the IRB payment may be suspended. The IRB payment may be cancelled if the situation that gave rise to the suspension of the payment of the benefit is not resolved within six months or, if their eligibility for the IRB or the determination of the amount payable was based on misrepresentation or concealment of a material fact. The Regulations also include VAC’s responsibility to provide written notification to the person about the reasons for, and the effective date of, the suspension or cancellation, and the veteran’s right to have the cancellation decision reviewed (under section 83 of the Act), as with review rights for other benefits under Part 2 of the Act.

Rehabilitation Services and Vocational Assistance — Amendments to the Rehabilitation Services and Vocational Assistance section of the Regulations are required to support changes made to the Act.

The rehabilitation services and vocational assistance application requirements for veterans have been amended in the Regulations to be consistent with IRB application requirements. These include medical reports and other documentation necessary to establish the existence of a health problem, its relationship to service and the resulting barrier to re-establishment; and any other information about the veteran’s health problem they consider pertinent to support their application. For a survivor, the application requirements include a copy of the death certificate of the CAF member or veteran; and medical reports or other records that document the CAF member’s or veteran’s injury or disease, diagnosis and cause of death. In addition, all applications require a declaration attesting to the truth of the information provided, and any other information or documents that are necessary to enable the Minister to assess eligibility.

Sections 8 and 9 of the Regulations have also been amended by replacing reference to paragraph 10(5)(a) in the Act, with subsection 10(4) in the Act, in accordance with amendments made to the Act.

Lastly, on April 1, 2024, access to rehabilitation services and vocational assistance is to close for those veterans who medically release for a health problem not resulting primarily from service. Given section 9 of the Act is to be repealed on this date, section 7 of the Regulations, which supports subsection 9(3) of the Act, is also repealed on this date.

Consultation

Leading up to the December 2017 announcement on the PFL benefit package, stakeholders had been asked to share their perspectives on the current benefits and what, in their view, needed to change. Following the creation of six advisory groups (whose memberships include veterans, members of veterans’ families, representatives of veterans’ organizations and the CAF/Department of National Defence (DND), as well as subject-matter experts) in spring 2016, the Policy Advisory Group in particular focused its deliberations on the concept of a pension for life and other benefits. The group presented its recommendations to the Minister in September 2016 and then shared them with participants at a National Stakeholder Summit in October 2016. Records of discussion for all advisory group meetings, plus the summits, including the Policy Advisory Group’s presentation at the Summit were posted on the VAC website and Canadians were invited to comment on benefits and any other issues through the “Have Your Say” portal. The group has continued to share its recommendations with VAC through written submissions and meetings.

Following the announcement in December 2017, information on the PFL benefit package was sent by email to VAC’s stakeholder network including the six ministerial advisory groups and veteran stakeholder groups. In addition, a teleconference was held with the co-chairs of the advisory groups following the announcement to brief them on the details of the PFL benefit package and provide the opportunity to ask questions.

In early March 2018, teleconferences were held with the six ministerial advisory groups, to provide more detail and consult with members on the PFL benefit package. Reaction was mixed but primarily positive; members were interested to see how the actual calculations of the new benefits would ensure they meet the needs of all veterans.

Beginning in January 2018, PFL veterans Town Halls, attended by local veterans and their families, and PFL Stakeholder Round Tables, attended by veterans’ organizations, were hosted by the Minister and the Deputy Minister in Vancouver, Victoria, Edmonton, Fredericton, Halifax, Dartmouth, Kingston, and Belleville. The participants at these events indicated appreciation for the local outreach and education. The concerns raised related primarily to understanding the new calculations, and whether the PFL benefit package will be as “fair” to veterans as the benefits available under the Pension Act.

On June 2, 2018, VAC published a notice of intent in the Canada Gazette, Part I, for a 30-day comment period, to seek input on the proposed regulatory amendments. This was done in lieu of prepublishing the Regulations in order to meet government requirements for related authorities and funding in time for the April 1, 2019, implementation. During this period, an email was sent to the VAC stakeholder network to notify them of the notice of intent and provided them with the link to the Canada Gazette website.

At the conclusion of the comment period, VAC received a total of eight comments — three from individuals and five from stakeholder groups (i.e. three from the Canadian Association of veterans in United Nations Peacekeeping, one from the Royal Canadian Legion and one from the veterans Ombudsman).

Summarizing some of the comments from respondents, three questioned the list of offsets for IRB, specifically Old Age Security (OAS) benefits and Canada Pension Plan (CPP) benefits. These offsets are consistent with offsets for two of VAC’s current economic support benefits, ELB and RISB, as CPP benefits are considered offsets under ELB, and both OAS and CPP are considered offsets under RISB. The IRB is not intended to be paid in addition to other income sources, but rather to ensure that income from all sources is at least 90% of a veteran’s military salary, or a minimum amount comparable to a middle-class income ($48,600) before age 65, with a reduction to 70% at age 65. As a veteran’s total income may be comprised of many sources (e.g. employment income, retirement pensions, employment insurance, OAS, workers’ compensation benefits), the IRB amount payable is reduced by these other sources of income.

Some respondents commented that the notice of intent was confusing and did not contain sufficient details on the proposed regulatory changes in order to adequately provide feedback. Due to the highly technical nature of these Regulations, the Department issued a notice of intent to provide the public with easy-to-understand details on the proposed regulatory changes.

While not specific to the regulatory amendments, two respondents were concerned about the reduction of the IRB amount for veterans when they reach age 65. This reduction is consistent with what currently happens to veterans who are in receipt of ELB, but transition into RISB when they reach age 65 (being 70% of the ELB amount). This is the generally recommended level of income to allow a retiree to maintain their standard of living. Again, not specified in Regulations, greater clarification on protected amounts was requested by one individual where others were concerned about how PFL benefits would impact their personal circumstances. VAC has replied to respondents, providing further information and clarification to help address their concerns.

The Department has carefully reviewed the Regulations in light of these comments and concluded that the Regulations, as written, will help to achieve the policy objectives of the new PFL benefits. Accordingly, VAC has determined that no changes are required to the Regulations at this time. Ongoing experience with the PFL benefit package and the outcome/performance measurements will inform the Department on any changes needed in the future. VAC will continue to consult with stakeholder groups and veterans to examine ways to improve the benefits and services provided to veterans and their families.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this regulatory submission, as there is no change in administrative costs to business.

Small business lens

This regulatory submission does not increase or decrease administrative burden or costs on small businesses.

Rationale

The new benefit package responds to concerns by veterans and stakeholder groups, and confirms to the Canadian public that this Government is committed to supporting CAF members, veterans and their families. This package delivers a new PFL economic and non-economic benefits to ill and injured CAF members, veterans and their families, addressing some of the inconsistencies and gaps within the current suite of benefits, and giving enhanced financial security and well-being to those CAF members and veterans who are most in need. As well, this benefit package provides a more streamlined and easier to explain benefit package for CAF members, veterans and their families, ensuring a more simplified service delivery process. Given the interrelationship between the statutory and regulatory changes being made, the following analysis therefore describes the impacts and benefits of the new statutory and regulatory changes together.

Costs — These changes will result in costs to the Government. As an example, paying monthly PSC amounts as opposed to lump sum DA amounts will temporarily reduce program costs; however, there will be a long-term financial cost to the Government for paying this monthly amount (that is subject to annual indexation) over a veteran’s lifetime. In addition, with respect to administrative costs, additional human resources are required to complement the existing staff in place to deliver current benefits. As the introduction of these new benefits is labour intensive on VAC, temporary and permanent staff are required to provide information and support to veterans and others to understand the impacts of the changes to benefits; transition existing clients to new benefits; process applications for new clients; process payments to both existing and new clients; update existing/create new forms and processes; and perform other administrative tasks.

Benefits — The PSC will give CAF members and veterans a guaranteed, monthly indexed payment for life with the choice to cash it out for a lump sum amount. This payment model also provides flexibility and choice to meet the individual needs and circumstances of CAF members, veterans and their families. As well, VAC will continue to offer financial advice for the PSC, which will give CAF members and veterans the opportunity to seek advice on the payment plan that works best for them and their family. Additionally, depending on the individual’s age, the CAF member or veteran could receive more in monthly lifetime payments than they would have by choosing to take the compensation as a lump sum amount.

For veterans who have a permanent and severe impairment related to service that is causing a barrier to re-establishment post service, they will have access to a new benefit, the APSC. The purpose of the APSC is to recognize and compensate veterans for the non-economic loss associated with the extent to which service-related permanent and severe impairments cause barriers to re-establishment. This compensation is over and above any amount received under the PSC, as veterans with permanent and severe impairments may face extra challenges as they re-establish in post-service life. The APSC will ensure they receive additional compensation as a result.

As previously mentioned, the IRB will ensure that eligible veterans receive the higher of 90% of the veterans military salary at release or a minimum yearly amount, which is comparable to the 2018 middle-class tax bracket. This change will ensure veterans receive an amount comparable to a middle-class income, reducing financial stress on veterans and their families, and ensuring they can afford the basic necessities of life, including food, shelter and clothing. The IRB is also designed to be more equitable for veterans than the former suite of programs. More specifically, it gives consideration to an individual’s personal circumstances such as the stage of their career they were at when they were injured. For example, a veteran who was injured early in their career and is determined to have a diminished earnings capacity will see their compensation increased over time in recognition of the promotions (and subsequent salary increases) they were not able to experience while in service. Under the IRB, a veteran can earn up to $20,000 in a calendar year before any employment income is offset from the amount payable. Research in disability management shows an important link between employment and positive health outcomes and well-being. These changes will encourage veterans to enter into civilian work opportunities to the extent possible, as well as have a positive impact on the quality of life for both the veterans and their family.

As a result of changes to the eligibility for VAC’s Rehabilitation Services and Vocational Assistance Program, there will be impacts on individuals who can no longer access the program benefits through VAC. However, individuals impacted by this change will continue to receive their benefits through CAF-LTD. This change will bring VAC closer to its more traditional benefit delivery approach of providing benefits and services for those with service-related injury or illness.

Gender-Based Analysis Plus (GBA+) — In keeping with the Government’s commitment to GBA+, VAC has committed to reviewing and proposing changes with a GBA+ lens. In the development of the new PFL benefit package, VAC undertook a GBA+ analysis to ensure there are no unintended differential impacts among veteran sub-populations and individual veterans. In particular, gender was taken into account to ensure the changes are equitable and that no GBA+ obstacles need to be addressed.

As of March 31, 2017, the estimated total veteran population in Canada was 658 400, with approximately 58 100 being war service veterans (i.e. those who served in the Second World War or the Korean War) and 600 300 being CAF veterans (the target population for the new PFL benefit package). Of these CAF veterans, 93 123 are in receipt of services from VAC, with 84 235 (90.5%) being male and 8 888 (9.5%) being female. VAC does not collect data on diversity of its clientele, therefore, no statistics exist regarding the numbers of indigenous peoples nor visible minorities. However, some data exists for still-serving CAF members. Women currently make up 15% of CAF members; indigenous peoples comprise 2.5%; and visible minorities comprise 6.3%. As the CAF works to increase diversity to its membership, the diversity of VAC’s client population is expected to change over time.

Research indicates that the prevalence of a high degree of disability among veterans is triple that of the Canadian population. Within the CAF population, the prevalence of activity restrictions among female veterans is twice as high as among male veterans. As well, female veterans are more likely to experience higher levels of disability than their male counterparts. With respect to income, females are more likely to have lower incomes than males while serving and post-release. Additionally, female veterans post-release were less likely than their male counterparts to identify working as their main activity and less likely to self-report a very or moderately easy adjustment to post-service life.

As a result of VAC’s current client demographics, it is expected that more men than women will be eligible for the PFL benefit package. However, due to an individual’s specific circumstances, some veterans, including women veterans, may benefit more than others as a result of the more targeted design of the new PFL benefit package to support those most in need.

VAC remains committed to monitoring and ensuring any gaps related to GBA+ are identified and mitigated when delivering programs and services to our veteran community.

Implementation, enforcement and service standards

To deliver these benefits, VAC will enhance its service delivery capacity. Applicants will be encouraged to use a simplified online application process through VAC’s client portal, My VAC Account, to improve processing times. My VAC Account will allow applicants to upload documents to support their applications, track the status of applications, receive letters, and correspond with the Department. Overall, information technology (IT) improvements aligned with the changes will make it faster and easier for veterans and other clients to access VAC benefits, which should improve client satisfaction and client outcomes. To support these changes, a new VAC IT system, called GC Case, will be used to process the new benefits.

To support the amendments to the Act and Regulations, VAC policies, directives, business processes, application forms and letters will be created and in place prior to April 1, 2019. To facilitate a smooth implementation for both VAC staff and eligible recipients, VAC has created a governance structure to coordinate and oversee all required elements.

In order to deliver these benefits, additional VAC staff will be required. This will include both service delivery staff who will deliver the benefit and administrative staff to provide the necessary supports. Given the volume of additional monthly PSC payments that will need to be considered, a temporary unit will be created to process decisions and prepare the payments. As well, a temporary Outreach Unit will be established to contact some individuals who are currently receiving VAC benefits to explain how the changes will impact them.

Ongoing communication with VAC staff is an integral component to the successful implementation of these changes. User testing, messaging and training plans will be delivered to VAC staff prior to the new benefits being implemented so they are well informed and can effectively assess applications, respond to questions, and provide information and advice to veterans and others on these changes. Additionally, various outreach and communication channels will be used to disburse messaging about the changes to stakeholders.

With respect to changes in eligibility for VAC’s Rehabilitation Services and Vocational Assistance Program, VAC will work closely with the CAF/DND to ensure individuals impacted by this change will continue to receive supports through the CAF-LTD. This coordinated approach is part of VAC and DND’s ongoing efforts to create a unified and integrated transition process that supports all releasing CAF members, veterans, and their families.

In keeping with the Department’s ongoing efforts to support program performance, VAC will develop performance information profiles for each of the three new benefits, which will align to VAC’s Departmental Results Framework. Regular reporting on performance will help to ensure data being collected is relevant and accurate, supports further evaluations of the initiatives and supports VAC in achieving the three identified long-term results: veterans are physically and mentally well; veterans and their families are financially secure; and veterans are satisfied with the services they receive. Service standards for existing VAC benefits will be reviewed and updated to reflect the new PFL benefit package by the coming into force of the changes. These service standards will provide the level of performance that clients can reasonably expect to receive from VAC under normal circumstances and provide a basis for the ongoing review of the benefits.

To ensure the end product developed is veteran-centric, VAC has adopted Agile methodology into its implementation plan. By executing within the Agile framework, VAC is able to iteratively build processes and products with frequent and consistent user engagement and feedback, ultimately resulting in a finished system that aligns with veterans’ needs.

VAC is committed to ensuring that the new PFL benefit package is privacy compliant. Any privacy implications will be appropriately identified, assessed and resolved before the new programs are implemented on April 1, 2019.

VAC has multi-year, risk-based plans in place to conduct audits and evaluations of VAC benefits and services, with results being published regularly on VAC’s external website. VAC’s Risk-Based Audit and Evaluation Plan will be updated to consider the IRB, the PSC and the APSC as part of their planned evaluation and audits to help ensure these programs are meeting their intended outcomes.

Contact

Sarah Brown
Director
Cabinet Business Unit
Veterans Affairs Canada
P.O. Box 7700
Charlottetown, Prince Edward Island
C1A 8M9
Telephone: 902-566-6890
Email: sarah.brown@canada.ca