Disability award improvements come into effect

August 17, 2017 by Sharon Adams

Changes to benefits under the New Veterans Charter (NVC) will put more money into the pockets of tens of thousands of wounded, ill and injured veterans and their families or survivors.

As of April 1, the ceiling on tax-free disability awards for service-related wounds, illness and injury was raised to $360,000 from $314,723, an increase of about 14 per cent.

The amount of the award, popularly known as the lump-sum payment, is determined by the severity of the condition and how much is attributed to military service, expressed as a percentage. Veterans can choose to be paid in a lump sum, in annual payments, or a combination of the two.

Disability awards will be topped up to reflect changes in the Consumer Price Index retroactive to 2006, when the NVC came into effect. “Every veteran with a disability award will receive an additional lump-sum payment,” Veterans Affairs Minister Kent Hehr said. VAC expects $700 million will be distributed among 67,000 Canadian Armed Forces members and veterans.

The increase brings the award more in line with private and public insurance plans, non-pecuniary damages awarded by courts and workers’ compensation boards. “We have been advocating…for quite some time to have the disability award increased to be commensurate with what the civilian court awards for pain and suffering,” said Dominion President Dave Flannigan of The Royal Canadian Legion.

The Legion is also pleased that awards for veterans assessed at one to four per cent will be calculated on the disability award rate, rather than rates under the Pension Act, as had been the case since 2006.

As well, the Permanent Impairment Allowance, a benefit to help compensate for lost job prospects and career opportunities, has been replaced by the Career Impact Allowance, a taxable monthly benefit paid for life. The new allowance considers diminished earning capacity and provides a taxable supplement for veterans unable to earn at least two thirds of pre-release salary due to a service-related health problem.

“This change increases access to higher…grade levels for some veterans,” said Flannigan.

Veterans and their advocates have argued that some of the most severely disabled veterans were not receiving the highest permanent impairment allowances. A new individual assessment, which will consider years left to serve at time of release and degree of lost earning capacity, is expected to give more veterans access to the highest allowances. By 2020, an estimated 2,700 veterans will be eligible for the increased benefit.

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