Myth Busting the New Veterans Charter Lump Sum Payment

Ottawa – August 15, 2014

“Under the New Veterans Charter a Veteran only receives a lump sum payment. There are no monthly payments for life.”  

Q: True or False?

A. False

By far the most contentious feature of the New Veterans Charter is the Disability Award, or the lump sum payment. For too many, it is “the be all and end all” of the New Veterans Charter”. This is most unfortunate because it is entirely untrue.

Discussion about the lump sum payment not equating with the lifelong pension have become increasingly polarized around this one method of compensation. One reason for this is that other available New Veterans Charter financial support benefits are simply ignored in the discussion. Too often they are not acknowledged despite the fact that in addition to the Extended Earnings Loss Benefit, which is paid monthly to age 65, and two other benefits – the Permanent Impairment Allowance and the Permanent Impairment Allowance Supplement (the Supplement) – can continue to be paid for life and provide a measure of financial security for the most disabled Veterans.

Let’s look at the Permanent Impairment Allowance first. It is a financial support benefit with the objective of compensating an eligible Veteran for loss of earning capacity, specifically the effects of a service-related permanent and severe impairment on lost employment and career progression opportunities. This benefit is provided in three grade levels. The taxable monthly amounts currently range from $574.89 to $1,724.65. In addition, the Permanent Impairment Allowance Supplement provides additional taxable financial support ($1,056.96 per month) to Veterans who are in receipt of the Permanent Impairment Allowance, are assessed to be totally and permanently incapacitated and are no longer able to participate in any suitable and gainful employment.

What is the financial impact of these benefits on a permanently and severely impaired Veteran who was medically released at the Corporal rank with four years of service (monthly before tax salary of $4,622), and an assessed disability level of 80 percent?  The Veteran is unable to work and is also assessed to be totally and permanently incapacitated. The example below shows the maximum that could be received if all of the benefits could be accessed by this Veteran.

This Veteran would receive a tax-free one-time lump sum disability award of approximately $241,000 to compensate for the pain and suffering resulting from his service-related injury (the award amount can be provided as an annual payment). Since the lump sum payment is strictly for pain and suffering, the Veteran would also receive the Extended Earnings Loss Benefit until the age of 65. This is a taxable monthly amount equal to 75 percent of gross pre-release salary, less other sources of income such as the Canadian Forces pension.  In addition, the Veteran could receive the Permanent Impairment Allowance and the Supplement on a monthly basis for life, as long as eligibility requirements are met.

Until the age of 65 (and assuming the Veteran is awarded the Permanent Impairment Allowance at the lowest grade level), approximately $5,100 per month in taxable monthly economic financial support could be provided.  If the Veteran was eligible for the Permanent Impairment Allowance at the highest grade level, the amount would be approximately $6,250 per month.

In essence, this Veteran, who was medically released at the Corporal-basic pay grade, could receive (until age 65) financial support that approximates the pay rate of a Master-Corporal at pay grade 3. If the Veteran was eligible for the Permanent Impairment Allowance at the highest grade level 1, financial support that approximates the pay rate of a Warrant-Officer at pay grade 3 could be received.  Although this is a maximum value, it does show what the New Veterans Charter is capable of providing.

One problem that I and others have identified is that when the Veteran reaches the age of 65, the Extended Earnings Loss Benefit ceases and the financial monthly support from Veterans Affairs Canada is reduced to the Permanent Impairment Allowance and Supplement. A one-time taxable lump-sum Supplementary Retirement Benefit would also be paid, which has an average payout of under $5,000. This reduction in financial support after the age of 65 needs to be a priority issue for this government and I am pleased that the House of Commons Standing Committee on Veterans Affairs took it up in its hearings and deliberations and made a recommendation to government to address this issue.

In summary, those who believe that the New Veterans Charter should be tossed out and the Pension Act restored as the sole legislative vehicle for Veterans’ programs and benefits forget that had it not been for Veterans’ frustration with the Pension Act, there probably would not be a New Veterans Charter today. Also, the Charter was not brought into being just to replace the lifelong pension of the Pension Act. Its focus is on wellness and facilitating the transition for Veterans and their families from military to civilian life – not just on compensation for pain and suffering, as was the case with the Pension Act.

While acknowledging that there are issues to be resolved with financial support after a Veteran reaches the age of 65 and that the Earnings Loss Benefit needs to be raised at least 10 percent so that there is no drop in net income for Veterans during their transition from military to civilian life, it cannot be said that a Veterans only gets a lump sum payment under the New Veterans Charter. Simply put, as it stands today under the New Veterans Charter, a seriously disabled Veteran can receive monthly payments until age 65 that equate to a salary one or two ranks higher than their current rank – this is reduced at age 65 when the Earnings Loss Benefit ceases. If my recommendations are adopted, financial security after age 65 will be secured.

Now having said how these allowances can positively affect the financial security of Veterans, there is a problem with accessing the programs.  My next blog on Monday will address this. Then next Tuesday, I will be releasing a report that details these and other issues with the Permanent Impairment Allowance and the Supplement. The report will recommend changes to improve access to these benefits for Veterans who suffer from a service-related permanent and severe impairment that impacts their employment and career progression opportunities.

Stay tuned.

Guy

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Comments

patrick said:

I was access for earing the doc said my lost was in my left ear and was a direct result from firing a weapon from the right hand. however VAC does not recognise as they said the lost is not bad enough regardless the forces are responsible for the loss I believe that rule should be reviewed the loss of earing is still there fault

October 5, 2017 3:39 PM

Office of the Veterans Ombudsman

Thank you for your comment, Patrick. Please contact us at: 1-877-330-4343.

October 6, 2017 12:02 PM

lyle said:

at the age of 80 I received a one time lump sum payment due to a 90 percent loss of hearing as a result of an abcess taking most of the eardrum. I did not receive any monthly payment do I qualify in any way with the nnew liberal guidelines. just curious

August 19, 2017 7:33 PM

Office of the Veterans Ombudsman

Thanks for your question. We need more details to provide you with an answer so, for privacy reasons, we suggest that you contact our frontline at 1-877-330-4343. They will be able to help you.

September 1, 2017 5:49 PM

Patrick said:

Wait and see what happens for budget 2017...The Libérals are working to re establish the lifelong disability pension...They will need to do a reassement of every Veteran and not penalize the members who had no choice but the lump sum...This would go a long way in securing finacial stability in the future for the Veteran.

February 24, 2017 2:51 PM

justme said:

HI I was just awarded the benefit for PTSD , why is it only a certain amount of the funds is released at first, I got 31 grand and they tell me there is more to come once I'm reassessed again this is protocol they told me, anyone else this happen too

November 27, 2016 9:14 PM

Keith said:

I've been recently denied PIA. I have been diagnosed with PTSD, and received a Disability Award payment for such, completed the vocational rehab program and found employment. However, due to nature of my injuries, the employment I had to take is menial and below what I could have achieved had I not been injured. But bills need to be paid, so I am left with little choice, which is fine....but isn't the levels of PIA designed for situations like this? Or maybe I am reading something wrong and if you work, you're not entitled? Just trying to make sense of it all and weigh my options. Thank You.

October 5, 2016 11:03 PM

Don said:

In reading the questions, which I find helpful.. It would be nice to see some real responses instead of.. Oh, contact your Ombudsman to discuss your case.. How about some written responses ..?? they might be helpful with others seeking information.. Kind of lets them know approximately where they stand. Thank you Don Williams Lake BC

August 30, 2016 9:43 AM

Office of the Veterans Ombudsman

Don, thanks for your valuable feedback.  We are in the process of updating our communications strategy and your suggestion to develop some generic answers to frequent or common questions is very timely!  This would certainly go a long way to helping others with similar interests or issues, as you suggest, and we wouldn't be infringing on anyone's privacy. 

By the way, did you know that, partly as a result of our efforts to increase the Disability Award lump sum amount, Budget 2016 proposes to increase its maximum amount to $360,000 in 2017?

August 30, 2016 6:26 PM

Produce for Veterans said:

I cannot believe how you guys are being treated. You guys are kings and queens and deserve to be treated as such.

May 28, 2016 11:40 PM

rick said:

I am coming to the end of the vocational rehab program. I still do have permanent injury in my right ankle which is judged at 10%. i still have trouble walking and pain. I am also receiving earning lost benefit. I am also having a hard time finding a Job as i was promised a degree and only got a diploma paid for. I have until April to find a Job is my deadline. What would happen if i do not find a job? would i lose my earning lost benefit and left without any income? what are my next steps so i have a plan B in case i do not find a job? Thank you

February 16, 2016 3:05 PM

Office of the Veterans Ombudsman

Thank you for your comment. We encourage you to contact us directly at 1-877-330-4343 so we can learn more about your case and do our best to assist. 

February 18, 2016 12:44 PM

george said:

Where do I find out my state of the veteraans pension

January 16, 2016 6:59 AM

Office of the Veterans Ombudsman

Hello and thank you for your comment. We encourage you to call us directly at 1-877-330-4343 so we can learn more and do our best to provide the information or assistance you need. 

January 18, 2016 12:30 PM

Natasha said:

I have been on ELB for awhile now and so my worker tells me I will be cut off come feb of next year. I have had 3 surgeries on my left ankle, second one resulted in a neuropathy in which I cannot feel my left leg, I have a 50% slip in my vertebrae in my L5, I have half use of my left hand. and am seeing a therapist for the last almost 2 years, why am I being cut off, the doctor even deemed me unable to work due to injuries and my anxiety and mood disorder...I will loose everything. I'm in desperate need of help.

October 18, 2015 6:19 PM

Office of the Veterans Ombudsman

We encourage you to contact us at 1-877-330-4343 so that one of our Ombudsman Service Representatives can find out more about your case. We will do our very best to assist you in any way we can.

October 19, 2015 9:22 AM

Rob Simpson said:

This what I've been trying to explain to so many. Now as of July 1st 2015 we have a Retirement benefit which allows us to live in comfort for the rest of our lives. There has been a bad case of tunnel vision among those screaming foul. I am glad you took the time to write about this. I personally am much better off then under the old act. But I like to see the ELB clawback fully repaid. And Widows receive more of our pensions when we die.

October 9, 2015 12:18 PM

Kelly said:

I was medically released in 2011. I have been deemed TPI (for several issues), am in receipt of PIA and the supplement, qualified for ELB, but I am still under SISIP and in receipt of LTD. Why am I still covered the umbrella of SISIP, when I qualify for ELB, am already approved for the SRB upon age 65, and receive all other benefits and coverage through VAC? I'd rather switch to ELB and have everything under the same umbrella and only have to deal one organization and all the crazy amount of paperwork that comes with it.

October 9, 2015 3:07 AM

Office of the Veterans Ombudsman

Thank you for your comment. We encourage you to contact us directly at 1-877-330-4343 so we can learn more about your case and do our best to assist. 

 

October 13, 2015 9:22 AM

Mike said:

Can you get PIA and still try to work, or work part time???

September 24, 2015 11:01 AM

Office of the Veterans Ombudsman

Thank you for your question. If you meet the initial eligibility criteria, as set out in the regulations, then you would still be able to work and receive PIA.  Employment income is not a determinant of PIA.  If you need more details, please feel free to contact an Ombudsman Service Representative by calling our toll-free number 1-877-330-4343.

October 5, 2015 9:28 AM

Mike said:

Can you get PIA and still try to work, or work part time???

September 24, 2015 10:37 AM

Dan said:

Good day, I am in the process of getting booted out of the CAF after 25yrs. I have no choice, I cannot meet the UofS anymore and the system is un-willing to keep me in another function, shame to loose all that experience. In any case, I will be going on SISiP Voc Rehab at 75% of my pre-release salary for two years. However my question is can I apply for PIA While on Voc Rehab? I am severely injured with physical injuries as well as multiple OSi's, please advise, thanks

April 8, 2015 4:59 PM

Office of the Veterans Ombudsman

Thank you for your message Mr. Lagacé. We are sorry to hear about your situation and encourage you to contact us directly at 1-877-330-4343 so we can learn more about your case and do our best to assist. 

 

April 13, 2015 11:48 AM

Danny J. said:

Update on my PIA Application .......................................... 1. It was Denied. 2. Since being medically released I have been at an economic disadvantage with respect to employment potential and career advancement. 3. Yes, the information I received was plain and clear. Question for the Ombudsman --------------------------------------------------------------------- When does the ELB benefit end? I ask this question because, being medically released from the Canadian Armed Forces, my quality of life has been poor until the rehab program was implemented.

October 24, 2014 7:37 AM

Office of the Veterans Ombudsman

Dear Danny J, Once again, we would like to invite you to contact our Office at 1-877-330-4343 to discuss this further. When contacted directly, our staff is committed to provide you with information and assistance as need be. If you prefer, you can also use the "submit a complaint" function via our website at http://www.ombudsman-veterans.gc.ca/eng/complaint and someone from our office will be contacting you. We take this opportunity to thank you, one more time, for taking the time to share your personal experience.

November 6, 2014 6:13 PM

grampakoot said:

I am 71 years old. I served in the regular forces 1961-64. I was awarded a lump sum payment for hearing loss in 2009. Had I sought hearing loss compensation prior to NVC in 2006 the monthly pension income would have amounted (equaled) to the lump sum payment in 2012. I find it very hard to believe that the NVC was not a money saving strategy!!

October 6, 2014 9:48 AM

Danny said:

Since I was medically released in 2003, I have went through years of financial hardship. I am that young private who was medically released at a young age. I never thought that I would be released and suffer so much. Although lost and depressed for years, I continued to fight for benefits. I was finally excepted in partaking in the vac rehab program, which I am grateful for. In saying this, I should feel secure that things well continue to improve, but it seems that my hopes for some sort of financial stability is always being crushed. I was guaranteed by a Veterans Affairs Case Management Officer that if I applied for the PIA that there was a 99% chance that I would receive it, due to my ongoing medical condition. Hesitant, I applied and waited months for a reply and yes! you guessed it, I was denied. My case manager received the letter prior to me and had already commenced a letter of appeal. The letter of appeal was sent and it was denied again. I am at my last appeal and it has been over a year since I have applied for the PIA and hope that who ever makes the decision looks at all the evidence and overturn their decision. I have three kids a wife and worked hard to survive through all of this political nonsense and will not quit until I feel a since of financial security and a better since of wellbeing.

October 2, 2014 7:38 PM

Office of the Veterans Ombudsman

We are sorry to hear about your situation and invite you to contact our Office at 1-877-330-4343 to discuss this further. Our staff will do their best to provide you with information and assistance as need be. If you prefer, you can also use the "submit a complaint" function via our website at http://www.ombudsman-veterans.gc.ca/eng/complaint Thank you for taking the time to share your personal experience.

October 3, 2014 9:18 AM

spirit crow said:

i am wondering why there are 3 levels for the PIA. i am in receipt of both the PIA and supplement because i cannot be gainfully employed (TPI)...my situation will always be this way so was wondering what makes the difference between the 3 levels. if i am TPI that means i am TPI, so why the difference in levels?

September 30, 2014 9:54 PM

Office of the Veterans Ombudsman

The question you ask is one we address in our most recent report: Supporting Severely Impaired Veterans - A Report on the New Veterans Charter Permanent Impairment Allowance and Permanent Impairment Allowance Supplement (http://www.ombudsman-veterans.gc.ca/eng/reports/reports-reviews/supporting-impaired-veterans). Specifically, you will find more information on how grade levels are assigned in the section entitled Summary of Findings: Assigning the Grade Level. The evidence shows that VAC allocates PIA grades based on level of disability. The greater the disability, the higher the grade level. Our Report explains that the intent of the allowance is to compensate for lost employment and career progression opportunities, not level of disability. Have a read of the Report as it will give you a good overview of the allowance and our recommendations for moving forward.

October 1, 2014 1:22 PM

Scott in Alberta said:

I was wondering if you could comment on the fact that Veterans Affairs Canada does not actually provide any of the benefits that you discuss during the first two years after a injured soldier is medically released. All services and benefits (except for the lump sum amount) are provided by SISIP not Veterans Affairs. A injured veteran does not have access to any of these benefits until after SISIP LTD benefits end. SISIP even is the provider of transition services not VAC. Also, can you comment on the reality that SISIP LTD is reduced by the gross amount of the CF pension leaving the injured veteran with an amount lower than 75% of pre-release salary.

August 26, 2014 1:09 PM

Office of the Veterans Ombudsman

Thank you Scott for your comment. You have very correctly noted that there are two service providers (SISIP and VAC) in the Vocational Rehabilitation process. The complex interrelationships between the two providers and the New Veterans Charter (NVC) can create situations where a Veteran is getting services from both service providers. Many folks don't understand these nuances and their consequences so we will be blogging soon on this to put this into context. We will explain how the provisions of the NVC factor into this relationship first and then how the Canadian Armed Forces and VAC are conducting operations. Stay tune and thank you again Scott for bringing this forward!

September 2, 2014 4:16 PM

l'roux said:

Bonjour, c'est bien beau la nouvelle et les changements que vous proposez, vous oubliez la famille car avec la nouvelle je suis très pénaliser car j'ai encore 4 enfants a ma charge .Avec le 75 % j'ai tout perdu les allocations pour les enfants.Si je me compare avec une personne ayant le 75 % avec couple ou sans couple il est moins pénaliser que moi .Au mois avec l'ancienne charte la famille comptaient pour beaucoup.J'aimerais avoir une réponse . Merci

August 24, 2014 8:49 PM

Office of the Veterans Ombudsman

Thank you for your comment Sir, We are sorry to hear about your situation and invite you to contact our Office at 1-877-330-4343 to discuss this further. Our staff will do their best to provide you with information and assistance as need be. If you prefer, you can also use the "submit a complaint" function via our website at http://www.ombudsman-veterans.gc.ca/eng/complaint Thank you for taking the time to share your personal experience about VAC.

August 25, 2014 10:08 AM

Claude said:

Bonjour, la définition de déficience permanente est trop ambigue. Pour cité mon example: j ai 30% pour discopathie Lombaire, 20% pour discopathie Cervicale, 35 % pour dépression Majeure et PTSD et 10% pour problèmes gastro-intestinaux. Mon total est de 93% car j en ai a 4/5 de responsabilité. Je n ai pas atteint le 98% requis pour etre éligible!! Je ne peu surement plus travailler le reste de mes jours. Présentement je suis avec le programme de réadaptation avec un équivalence de 75% de mon salaire a ma libération. Mais ont me dit que ses allocations se termine apres 2 ans il me reste que 7 mois. Que-ce que je peu faire apres ??

August 21, 2014 12:14 PM

Office of the Veterans Ombudsman

We are sorry to hear about your situation and invite you to contact our Office at 1-877-330-4343 to discuss this further. Our staff will do their best to provide you with information and assistance as need be. If you prefer, you can also use the "submit a complaint" function via our website at http://www.ombudsman-veterans.gc.ca/eng/complaint Thank you for taking the time to share your personal experience about VAC

August 22, 2014 8:26 AM

Ron said:

I qualified for the ELB,but not the PIA or supplement,what's up with that

August 21, 2014 12:11 AM

Office of the Veterans Ombudsman

Thank you for your comment Ron. We recommend that you contact our office at 1-811-330-4343 to look into your situation. We will do our best to assist you in any way we can. Until next time!

August 21, 2014 9:53 AM

Old Silverback said:

You seem to leave the impression that the NVC is as good as the old pension system. It is clear to me and many others that the old tax free indexed for life disability pension was the best option and the fairest compensation for ALL rank levels. The PIA allowance and other benefits are not routinely awarded so they should not be included. Also the lump sum is for pain and suffering while the earning loss and PIA are for financial loss due to a serious injury and inability to work. These are two separate benefits for different reasons. Why can't you get a disability pension for your pain and suffering and get the earning loss for compensating for loss of lifetime income.

August 18, 2014 6:09 PM

Graham Godlien said:

The only reasonable, non political way to define the NVC, is very simple, and has been done several times... compare several cases, at all levels, against both systems and let the VOTERS decide what is acceptable is the only option a true Ombudsman has to provide evidence to the people he is defending and leaving the judgement as to whether the governments actions are acceptable to the voters and citizens of this country. Learned people have published numerous studies regarding this subject. Please address these investigations and do a true comparison, as you should, and let the VOTERS decide, your job terms of reference are detailed in the NVC.

August 16, 2014 8:56 PM

Murray said:

We should have had this type of explanation many years ago. You mention loss of the Earnings Loss at age 65. It seems that this is an urgent problem that should have been fast tracked as some of us would like to put that concern aside so we can live our last years in a peaceful manner and not like we do every day worrying about how we will be able to live. Good job Guy

August 16, 2014 12:04 AM

Graham Godlien said:

So ... you get to ask and answer your own questions ... answer some questions ... real questions ... be a man ...

August 15, 2014 10:26 PM

Sylvain said:

Guy, Let’s not mix up apples and oranges. Financially speaking when you compare the NEW and Lumps Sum. You are better off with the Pension Act. The Equitas lawyers said the Pension Act is better. The Clazton says its better and even the Audit Report from VAC 2010 says so. All programs under the NVC are avail to those under the pension act, Less monthly)

August 15, 2014 4:59 PM