Table of Contents

• Executive Summary
• Introduction
• Methodology
• Background
  • The Rehabilitation Program
  • Additional Dependant Care
• Analysis and Findings
  • Finding 1
  • Recommendation 1
  • Finding 2
  • Recommendation 2
• Conclusion
• Recommendations to the Minister of Veterans Affairs
• References
• Annex A
• Annex B

Executive Summary

We launched this review after receiving a complaint from a Veteran about Additional Dependant Care reimbursement. The client attended an inpatient treatment program through the Veterans Affairs Canada (VAC) Rehabilitation Program and her dependant care costs were much higher than VAC could legally pay. This complaint raised concerns that the maximum rates for Additional Dependant Care cannot be exceeded for some clients, regardless of their circumstances, and that the maximum rates have not changed since 2006.

Why this issue is important

Additional Dependant Care is reimbursement for paid dependant care to help clients attend services through the VAC Rehabilitation Program. The purpose of the Rehabilitation Program is to provide services that meet the rehabilitation needs of the individual. However, the current rules for the maximum rates for Additional Dependant Care may disadvantage some clients. If the reimbursement of Additional Dependant Care does not meet the needs of Rehabilitation Program clients, their only options are to pay the extra cost out of pocket or exclude those services from their rehabilitation plan.

What we found

Our review found two fairness issues with the regulations’ rules around the maximum rates for Additional Dependant Care.

Key findings and recommendations

According to the Veterans Well-being Regulations, Rehabilitation clients attending rehabilitation services other than training cannot be reimbursed beyond the maximum rate for Additional Dependant Care in exceptional situations, unlike clients attending training. When we asked why this difference in the regulations existed, VAC did not give a clear reason. Our review found that this limitation is inconsistent with the purpose and design of the Rehabilitation Program, which is to be flexible and focused on the individual’s needs. This lack of flexibility is unfair because some Veterans attending rehabilitation services other than training can experience situations that greatly increase the cost of care, but VAC currently cannot exceed the maximum rate to meet their needs. The lack of discretion is more likely to affect some Rehabilitation Program clients more than others, such as clients attending longer programs, clients living in an area with high dependant care costs, clients with multiple dependants or dependants with high support needs, single-parent clients, and female clients.

Recommendation 1: Amend the Veterans Well-being Regulations to include discretion to exceed the maximum rate when circumstances warrant for Additional Dependant Care for clients attending rehabilitation services other than training.

Additional Dependant Care maximum rates have not been adjusted since they were introduced in 2006. The maximum rates’ lack of adjustment means they are not in line with other similar maximum rates and may not have kept up with actual costs. For example, the maximum rates for dependant care from the Canadian Armed Forces Long-Term Disability Vocational Rehabilitation Program are indexed to reflect the rising cost of care while Additional Dependant Care maximum rates are not. In addition, Canadian research suggests that the market rate cost of unsubsidized dependant care has risen over time.

Recommendation 2: Ensure that the regulatory provisions for Additional Dependant Care maximum rates do not result in clients bearing more of the cost of Additional Dependant Care over time.

Summary

Overall, we found that the Department’s lack of authority to exceed the maximum rate for Additional Dependant Care for clients attending rehabilitation services other than training is unfair to those clients because there is no flexibility to meet their individual needs. We are also concerned that the maximum rates for Additional Dependant Care, which were set out in the regulations in 2006 without any provisions to adjust them, may not have kept up with the cost of dependant care. Our recommendations seek to resolve these systemic fairness issues.

Introduction

We initiated this review because of systemic fairness issues identified during an investigation into a client complaint made to our Office. The Veteran client was a single mother who attended a 45-day inpatient treatment program through the Veterans Affairs Canada (VAC) Rehabilitation Program. While she was in treatment, the dependant care costs for the full-time care of her four dependants far exceeded the maximum of $75 per day that VAC could legally pay. Ultimately, VAC was able to reimburse this client for the remaining balance because she was eligible for funding through another program, but her complaint pointed to systemic fairness issues with Additional Dependant Care that could affect other clients. ^{Footnote 1}  Based on our findings of unfairness in this client’s case, we initiated a systemic review to assess the fairness of the regulatory provisions for the maximum reimbursement rates for Additional Dependant Care provided through the VAC Rehabilitation Program.

Methodology

One of the roles of the Office of the Veterans Ombud (OVO) is to identify and make recommendations to resolve systemic fairness issues with VAC programs, benefits, and services (Office of the Veterans Ombud, 2023). We evaluate systemic issues by assessing treatment, process, and outcome for fairness. ^{Footnote 2}  Our Office defines systemic unfairness as a practice, policy, procedure, rule, law, or gap therein that improperly discriminates ^{Footnote 3} against and negatively impacts a group of people who share a common attribute.

This review focuses on the fairness of Additional Dependant Care reimbursement through the VAC Rehabilitation Program.

To identify whether the rules around Additional Dependant Care maximum rates are fair, we reviewed and analyzed:

• OVO client complaints about dependant care
• Relevant VAC policies, documents, websites, legislation, and regulations
• VAC client data for the Rehabilitation Program and Additional Dependant Care ^{Footnote 4}
• VAC program rationales and design
• Academic literature on dependant care
• Other similar benefits in Canada and internationally
• Current costs for dependant care in Canada
• Child care subsidies and fee reductions in Canada

We applied a Gender-Based Analysis Plus (GBA Plus) lens to our project planning, research, and writing. GBA Plus is a tool for analysis that takes intersecting factors, including sex, gender, age, race, and other identity factors into account to support diversity-informed policy, including finding ways to mitigate barriers that certain groups may face in accessing or benefiting from government initiatives (Women and Gender Equality Canada, 2023).

Before publication, we submitted a draft of this report to VAC officials for comment and to confirm the accuracy of information related to VAC programming.

Background

The Rehabilitation Program

The VAC Rehabilitation Program provides eligible clients with funding for medical, psycho-social, and vocational rehabilitation services as well as related expenses to support them while they participate in these services. Canadian Armed Forces (CAF) Veterans with a health problem resulting primarily from service and, in some cases, their spouses or survivors can participate in the Rehabilitation Program. The goal of the program is to help clients identify and overcome barriers to re-establishment in civilian life to restore “physical, psychological, social and vocational functions to an optimal level following an injury or illness” (Government of Canada, 2005, p. 4224).

VAC established the Rehabilitation Program on April 1, 2006, with the introduction of the New Veterans Charter (NVC). ^{Footnote 5}  The NVC was designed to meet the needs of modern-day Veterans, with an emphasis on providing support for their transition to civilian life and shifting “the focus from one of disability to one of wellness” (Government of Canada, 2005, pp. 4213, 4214). ^{Footnote 6}

Additional Dependant Care

The Veterans Well-being Regulations set out provisions for Additional Dependant Care under the Rehabilitation Program. Additional Dependant Care refers to reimbursement ^{Footnote 7}  for paid care for a dependant when their primary caregiver attends services through the VAC Rehabilitation Program. ^{Footnote 8}  VAC compensates eligible clients for the paid care of minor children, disabled adults, and elderly adults, which can be provided by friends, relatives, or professional providers (VAC, 2012b, 2023). The purpose of Additional Dependant Care is to facilitate full participation in the program by removing dependant care as a barrier to accessing rehabilitation or vocational services. ^{Footnote 9}

A key requirement for reimbursement is that Additional Dependant Care must be in addition to any care already provided for the dependant (VAC, 2012b, 2023). For example, when a client in the Rehabilitation Program has a program-related appointment while their dependant is at their regular daycare program, VAC does not provide funding for that care. When a client has a program-related appointment at a time when they would otherwise be providing care for their dependant, VAC does provide funding for the care (provided the client meets the other eligibility requirements). In short, VAC reimburses clients for Additional Dependant Care costs incurred as a result of their participation in the Rehabilitation Program. ^{Footnote 10}

VAC compensates clients for Additional Dependant Care differently depending on whether they are attending training or services other than training (VAC, 2012b, 2023). ^{Footnote 11}  Clients attending training can be reimbursed for 50% of their costs up to $750 per month. However, under subsection 15(4) of the Veterans Well-being Regulations, VAC can exceed the maximum rate and percentage for clients attending training when more than three dependants require care, the availability or location of care increases the cost, or additional funding is required to support the client in meeting their occupational goals. For clients attending rehabilitation services other than training, different rules apply: clients attending rehabilitation services other than training can be reimbursed up to $75 per day, with no percentage maximum. In addition, the regulations ^{Footnote 12}  provide no discretion to exceed the maximum rate for clients attending rehabilitation services other than training, regardless of their circumstances (VAC, 2012b).

A very small number of clients in the Rehabilitation Program are reimbursed for Additional Dependant Care. Of 29,635 total Rehabilitation clients from April 1, 2018, to March 31, 2023, 195 clients were reimbursed for dependant care while attending training, and 151 clients were reimbursed while attending rehabilitation services other than training. ^{Footnote 13}  Clients can be compensated for Additional Dependant Care while attending both types of services during their participation in the Rehabilitation Program, so there is likely overlap in these groups, but it was not possible to identify how much.

Analysis and Findings

Finding 1: It is unfair that the regulations do not permit clients attending rehabilitation services other than training to be reimbursed beyond the maximum rate for Additional Dependant Care in unique or exceptional circumstances.

We base this finding on the following analysis.

1.1 No persuasive rationale supports the discretion to exceed Additional Dependant Care maximums only for clients attending training and not for clients attending rehabilitation services other than training.

To understand the reason for the difference in Additional Dependant Care funding structures, we asked VAC for the rationale that supports why the Department has regulatory discretion for clients attending training but not for those attending rehabilitation services other than training. VAC explained that they conducted a review of vocational training expenses in 2013 that led to the addition of specific discretion to exceed the maximum rate and percentage for Additional Dependant Care for clients attending training because they may incur higher costs due to “unique or extraordinary circumstances.” ^{Footnote 14 Footnote 15} VAC clarified that they did not include services other than training in the 2013 review that led to this change to the regulations. ^{Footnote 16}  This explanation speaks only to why changes were made for clients attending training and does not explain why clients attending rehabilitation services other than training would not require comparable latitude to exceed the maximum rate in those same compelling circumstances. The Department’s explanation for the disparity in discretion does not furnish evidence or a policy argument to support the difference and thus does not constitute a sound rationale.

Finding that this explanation did not justify the difference, we assessed whether the Department’s rationale for the overall difference in maximums between the two reimbursement schemes could potentially justify the difference in discretion. In response to our question about the difference in the regulations’ maximum rates between the two streams, ^{Footnote 17} VAC explained that training can require full-time attendance and therefore may require full-time dependant care, while services other than training are generally of a shorter duration and do not require full-time dependant care. ^{Footnote 18} However, as our client case illustrates, services other than training can last many days or even months and can require full-time care. As a more general example, we conducted a rapid scan of currently available mental health and addiction inpatient and outpatient programs in Canada which identified a variety of inpatient programs requiring 24-hour attendance lasting 4 to 12 weeks ^{Footnote 19} and an array of intensive outpatient programs requiring attendance for 6 to 45 hours per week for 1 to 16 weeks ^{Footnote 20 Footnote 21} . Thus, longer programs that fall under services other than training, such as inpatient and intensive outpatient programs, can require clients to be away from home for extended periods and therefore can necessitate fulltime Additional Dependant Care for weeks or months. Importantly, even if this assumption about differences in duration can be shown to be true as a generality, as evidenced by our client case, there will always be exceptions that justify exceeding the maximum rate on a case-by-case basis because of individual client circumstances. The Department’s explanation for the regulations’ overall difference between the two funding structures thus similarly fails to justify the disparity in discretion between the two streams and as a result, we conclude that this difference is not justified by a reasonable policy rationale.

1.2 A lack of discretion to exceed the maximum rate for Additional Dependant Care in exceptional circumstances for clients attending rehabilitation services other than training is inconsistent with key elements of the purpose and design of the Rehabilitation Program.

Modelled on best practices in disability management, the Rehabilitation Program is intended to be flexible and based on the needs of the individual (VAC, 2012b; Government of Canada, 2005). When Government introduced the program in 2006, it articulated one of the program’s core principles as a “focus on individual needs” (Government of Canada, 2005, p. 4226). The Rehabilitation Program aspires to adhere to this principle through key pillars such as case management and individualized rehabilitation goals that are identified by and with the client. Accordingly, reimbursement of eligible expenses such as Additional Dependant Care is also intended to meet clients’ individual needs to support their participation in the program: per VAC policy, “reimbursement decisions need to be broad and flexible to facilitate the individual's access to these services” (VAC, 2012b). Because the Veterans Well-being Regulations do not include the discretion to exceed the maximum Additional Dependant Care rate for clients attending rehabilitation services other than training, case managers’ ability to be flexible in these reimbursement decisions is limited by the firm maximum of $75 per day. As our client case illustrates, Additional Dependant Care costs in a given individual situation may far exceed that maximum rate, but the regulations provide no flexibility to meet these needs within the Rehabilitation Program. Thus, the lack of a discretion provision in the Veterans Well-being Regulations for clients attending rehabilitation services other than training compromises the program’s focus on flexibility to meet individual needs and may jeopardize the participation aims behind reimbursement of rehabilitation-related expenses.

In addition to the goals of providing flexible and individualized services and reimbursement, rehabilitation services are also intended to work together to support re-establishment in civilian life (Government of Canada, 2005, p. 4217). When needed, services other than training are used to improve the mental and physical health of participants. Once clients are medically and psychosocially stable enough to focus on returning to work, they can participate in vocational services, including training, to improve their employability (VAC, 2024). Even where employment through vocational training may be the client’s ultimate goal, their success with services other than training may be a determining factor in achieving that goal. In other words, a lack of flexibility in one component of the program may compromise the client’s chances for success in other components of the program, because these components are intended to work together. This program design points to the need to prevent disparities across program components: adequate and equitable reimbursement support in each component of the program, including services other than training, is important to maximize the client’s chances of success in the program overall.

1.3 Some client groups may be more likely than others to be affected by a lack of discretion to exceed the maximum rate for Additional Dependant Care for clients attending rehabilitation services other than training.

We completed a GBA Plus analysis of the potential client groups most likely to be negatively impacted by the lack of discretion to exceed the Additional Dependant Care maximum rate of $75 per day for clients attending rehabilitation services other than training. As discussed above, we found that individuals attending longer programs, such as inpatient or intensive outpatient programs, may be more affected by the lack of discretion because they can require Additional Dependant Care for 24 hours a day for extended periods, leading to high dependant care costs. Along with the duration of the program the individual is attending, the location of the dependant care can also greatly impact the cost. Median fees for child care vary widely by city, with parents in cities in Quebec paying only about 10% of the fees that parents in Toronto were paying in 2019 and 2021 (MacDonald & Friendly, 2020, 2022). ^{Footnote 22} Consequently, due to the greater cost of care, clients attending longer programs or living in areas with higher-than-average dependant care costs may incur costs that greatly exceed the maximum rate, pointing to the need for a provision that allows decision-makers to consider circumstances such as these for exceptional reimbursement above the maximum.

In addition to the duration and location of care, dependant care costs are also impacted by the number of dependants requiring care and their level of support needs. In most cases, the cost of dependant care increases with each dependant requiring care because the cost of care is typically charged per dependant, leading to higher care costs for primary caregivers with multiple dependants; these higher costs are evidenced by such things as per-child income tax provisions for child care expense deductions (Canada Revenue Agency, 2018). In parallel, primary caregivers with dependants who have high levels of support needs tend to pay a premium for dependant care. For example, the cost of elder care varies greatly depending on the level of assistance needed. ^{Footnote 23} Of the provinces and territories where home care is not entirely funded by subsidies, the lowest hourly rate for highly skilled elder care was $65 per hour and the highest was $125 per hour in 2022 (Sunlife, 2022a-2022m). ^{Footnote 24}  For clients with an elderly dependant requiring a high level of care in provinces with high home care costs such as these, the maximum rate of $75 per day would not cover a single hour of care. Therefore, clients with multiple dependants or dependants with a high level of support needs may also require increased reimbursement for Additional Dependant Care to mitigate the higher cost of care.

Finally, certain sociodemographic factors such as marital status and sex may impact an individual’s need for Additional Dependant Care reimbursement. For instance, single parents may need more financial support for Additional Dependant Care than coupled parents because they tend to have substantially lower household incomes (Statistics Canada 2022a, 2024) ^{Footnote 25} , while also being primarily responsible for the care of their children. In the Veteran population specifically, female Veterans are more likely to be single parents, have three or more children (Statistics Canada, 2023), and spend a majority of their time caregiving compared to male Veterans (Maclean et al., 2018, 2019). ^{Footnote 26} With respect to VAC clients, we found that from fiscal year 2018 to 2023, among female clients reimbursed for Additional Dependant Care while attending rehabilitation services other than training, a disproportionate number were single. ^{Footnote 27 Footnote 28} During the same timeframe, we also found that female clients disproportionately required Additional Dependant Care reimbursement: while only 20% of clients enrolled in the Rehabilitation Program were female, 37% of Additional Dependant Care recipients were female. ^{Footnote 29 Footnote 30} Thus, single clients and female clients attending rehabilitation services other than training may have a greater need for Additional Dependant Care reimbursement including beyond the maximum rate.

In effect, these GBA Plus insights broadly support the existing regulatory criteria that allow the Department to consider exceeding the maximum Additional Dependant Care rate for clients attending training (when more than three dependants require care, when necessary as a result of the availability or location of care, or as necessary to enable the person to achieve their rehabilitation goals). While we do not wish to foreclose the possibility that VAC may choose to expand or adjust these criteria upon review, we note that our client case would have qualified for consideration to exceed the maximum rate if comparable criteria applied to both streams. As it was, the client instead incurred costs that caused her significant financial hardship. In our view, the existing criteria that allow the Department to consider exceeding the maximum Additional Dependant Care rate for clients attending training reflect good policy that is GBA-Plus-informed, and through regulatory amendments these criteria could be adapted to apply to both streams.

Conclusion

In summary, the Rehabilitation Program aims to be flexible and based on the needs of the individual, and the regulations’ lack of discretion to exceed the maximum rate for Additional Dependant Care for clients attending rehabilitation services other than training is misaligned with this goal. While a strong rationale might provide a reasonable argument for why the regulations lack discretion for these clients, we found that the Department’s rationale for the difference did not clearly explain or justify the lack of discretion. Discretion to exceed the maximum rate is important because some clients may incur higher-than-average costs while attending rehabilitation services other than training and, currently, their only options if they need to attend these services are to absorb those extra costs or exclude those services from their rehabilitation plan. Clients who may have higher dependant care costs include those who attend longer programs, live in an area with above-average dependant care costs, have multiple dependants or dependants with high support needs, are single parents, or are female. In light of this analysis, we conclude that the Additional Dependant Care needs of clients attending rehabilitation services other than training cannot be met in all cases without regulatory discretion to exceed the maximum rate in exceptional circumstances.

Accordingly, we find that it is unfair that the regulations do not permit clients attending rehabilitation services other than training to be reimbursed beyond the maximum rate for Additional Dependant Care in unique or exceptional circumstances.

Recommendation 1: Amend the Veterans Well-being Regulations to include discretion to exceed the maximum rate when circumstances warrant for Additional Dependant Care for clients attending rehabilitation services other than training.

This recommendation intends to resolve the unfairness caused by the regulations’ lack of discretion to exceed the maximum rates for Additional Dependant Care for clients attending rehabilitation services other than training. One possible solution would be to take the existing criteria that allow the Department to consider exceeding the maximum rate in the case of training and, through regulatory amendments, adapt these criteria to apply to both streams.

Finding 2: The regulations’ fixed Additional Dependant Care maximum rates create a disparity with comparable programs and could make it less likely that these rates will keep up with dependant care costs.

We base this finding on the following analysis.

2.1 Other comparable rate maximums from VAC and the Canadian Armed Forces Long-Term Disability Vocational Rehabilitation Program are indexed or do not have individual maximums, and no persuasive rationale supports this disparity.

When Government introduced the VAC Rehabilitation Program in 2006, it specifically noted that reimbursement of expenses, including Additional Dependant Care, was meant to be comparable to similar reimbursement offered by the CAF Long-Term Disability Vocational Rehabilitation Program (CAF LTD VRP) (Government of Canada, 2005, p. 4225). However, the regulations’ Additional Dependant Care maximum rates have not changed since being set in 2006, while those in the counterpart CAF LTD VRP are adjusted annually to keep pace with rising costs. ^{Footnote 31} Although VAC and CAF LTD VRP dependant care maximum rates are intended to be aligned with one another, in 2024, clients attending training through the CAF LTD VRP ^{Footnote 32} can be reimbursed up to $260 more per month than a client in the VAC Rehabilitation Program attending training, assuming both clients are reimbursed within the maximum rates (Canadian Forces Morale and Welfare Services, 2024). ^{Footnote 33} VAC Additional Dependant Care maximum rates are now almost twenty years behind the CAF LTD VRP rates and the two programs no longer have reimbursement parity, contrary to the original intent.

In addition to their disparity with CAF LTD VRP, the maximum rates for Additional Dependant Care are unique within the VAC Rehabilitation Program itself. For clients attending training, all training-related expenses except for Additional Dependant Care are included in an overall maximum reimbursement amount (VAC, 2023; Government of Canada, 2013, p. 2124). The regulations have no per-item maximums for other training expenses (for example, for books or software costs), affording case managers the flexibility to allocate the available funding in a way that meets clients’ individual needs. In contrast, Additional Dependant Care is the only training-related expense that has its own individual maximum rate. Meanwhile, for non-training expenses, all reimbursement rates are periodically adjusted ^{Footnote 34} except for Additional Dependant Care which has a maximum that has not changed since it was introduced in 2006. In other words, Additional Dependant Care is the only expense in the Rehabilitation Program where reimbursement is subject to an individual maximum that is also not periodically adjusted. Because Additional Dependant Care reimbursement does not benefit from the flexibility of inclusion in an overall maximum but is instead subject to individual maximums that are also not adjusted, its maximum rates are uniquely static in the Rehabilitation Program, remaining unchanged since 2006 and thus less able to respond to increases in actual costs borne by clients.

When we asked why the Veterans Well-being Regulations do not provide for adjusting these rates, VAC again explained that changes were made to the regulations in 2013, which added specific discretion to exceed the maximum reimbursement percentage and amount for Additional Dependant Care for clients attending training in some exceptional situations. ^{Footnote 35} This rationale does not apply to clients attending rehabilitation services other than training. More importantly, discretion to exceed a maximum rate in exceptional circumstances does not negate the need for maximum rates to keep pace with current costs in typical circumstances that may not qualify for exceptional consideration. The Department’s rationale for why the maximum rates for Additional Dependant Care are not indexed or otherwise adjusted is insufficient to support static maximum rates for Additional Dependant Care, and we conclude that the anomaly of the regulations’ unchanging Additional Dependant Care maximum rates does not appear to be justified by a strong policy rationale.

2.2 The maximum rates for Additional Dependant Care may no longer be sufficient to cover clients’ costs given these rates have not changed since 2006.

While we know that the Additional Dependant Care maximum rate for clients attending training was based on the rates reimbursed by CAF LTD VRP, as discussed above, VAC could not provide the analysis on which they based the maximum rates for clients attending rehabilitation services other than training. In response to our question about how VAC determined the $75 per day maximum rate for these clients, VAC explained that they were unable to identify the specific information and data that was used, but cited the “variability of individual circumstances and the cost of care across the country.” ^{Footnote 36} VAC also clarified that there is no percentage cap associated with this maximum rate and instead a case manager determines a “reasonable amount, up to $75 per day” to reimburse. Because VAC could not provide the data or analysis used to determine the maximum rate for clients attending rehabilitation services other than training and has not defined the proportion of clients’ costs this maximum rate is intended to cover, we were not able to conduct a comparative analysis to determine whether the regulations’ static maximum rates set out in 2006 are still sufficient relative to the original sources that VAC used to establish them.

Although we could not duplicate the Department’s original analysis, the limited available Canadian research suggests that unsubsidized market rate dependant care costs have risen over time. Data on the cost of dependant care in Canada from 2006 to 2024 is quite sparse, ^{Footnote 37} but the Canadian Centre for Policy Alternatives has released yearly reports that track the cost of child care for parents across the country since 2013. These reports found that for each year between 2013 and 2018, the median monthly cost of child care rose faster than the rate of inflation in most of the cities examined across the country (Macdonald & Klinger, 2015; Macdonald & Friendly, 2014, 2016, 2017, 2019). ^{Footnote 38} From 2019 on, the reported rates decreased due to provincial and federal child care subsidies and other fee reduction programs, later including the Canada-wide Early Learning and Child Care Plan (Macdonald & Friendly, 2020, 2022, 2023a, 2023b). However, we would not consider subsidized and fee-reduced costs to be the maximum rates’ relevant benchmark for several reasons: first, many clients may not meet the eligibility criteria for the subsidies or fee reductions, or be able to find eligible spaces, and the implementation of these measures is different across the provinces (Beach et al., 2023, p. 272, 307-309; Friendly et al. 2024, pp. 125-126; MacDonald & Friendly, 2023a). Second, VAC does not require clients to access subsidies, fee reductions, or any other sources of funding for Additional Dependant Care before they may access VAC funding for these costs. ^{Footnote 39} Finally, these subsidies and fee reduction programs generally apply to caregivers’ regular care arrangements in regulated child care centres (Friendly et al. 2024, p. 11), and may be less applicable to the eligibility requirements for Additional Dependant Care, which reimburses for paid care that is in addition to any regular arrangements that a caregiver may have. For instance, the cost of in-home elder or child care is much higher on average than the cost of centre-based child care or day programs for elderly individuals. In 2022, parents paying for care by a non-relative in their home paid the most of any paid child care arrangement, with an average cost of $106 per day for a single child between the ages of 0 to 5, compared to an average of $31 per day for daycare for the same child (Guèvremont & Findlay, 2023). In 2022, in-home elder care can cost as much as $125 per hour in Canada, depending on the location and type of care required, compared to $0 to $22 per day for adult day care programs (Sunlife, 2022a-2022m). While this is a snapshot of dependant care costs in 2022 that does not speak to how these costs may have risen over time, these costs clearly eclipse the $75 per day maximum and would take only a few days of paid care to eclipse the 50% up to $750 per month maximum. Unfortunately, the available research on child care costs over time from 2019 onward does not report on unsubsidized market rate costs, and data on the cost over time of other types of dependant care, such as elder care, does not appear to be publicly available.

Even if Canadian data on the market rate cost of unsubsidized care for children, elderly adults, and disabled adults over time was available, it would not offer direct insight into whether the regulations’ maximum rates for Additional Dependant Care are meeting the needs of Rehabilitation Program clients. To understand the specific needs of these clients, we requested VAC statistical client data related to Additional Dependant Care reimbursement. Relevant statistics available for the training stream were minimal, and while more information was available for services other than training, VAC advised that this information did not include whether and how many times clients had reached the maximum rate. ^{Footnote 40} As a result we could not assess whether more clients were reaching or exceeding the maximums over time, nor whether the Additional Dependant Care maximum rates covered a decreasing proportion of actual client costs year over year. ^{Footnote 41} However, we understand that VAC anticipates greater data granularity and availability with the recent move to the new Rehabilitation contractor. ^{Footnote 42} Because we understand that the necessary reimbursement statistics will be available in future, VAC is well positioned to determine whether the regulations’ maximum rates for Additional Dependant Care are keeping up with the cost of care over time.

Conclusion

In summary, the regulations’ maximum rates for the Department’s Additional Dependant Care stand in contrast to the maximum rates for dependant care reimbursement from CAF LTD VRP, as well as the reimbursement of other VAC Rehabilitation expenses, because they are not adjusted or included in a flexible overall maximum. Unfortunately, VAC was not able to provide statistical client data that would allow us to identify whether the submitted costs for Additional Dependant Care also demonstrate that clients are bearing more of the cost over time. Nevertheless, our analysis showed that static maximum rates for Additional Dependant Care may be inappropriate because the available Canadian longitudinal research on the market rate cost of unsubsidized child care suggests costs have risen substantially since 2006 (Macdonald and Klinger, 2015; Macdonald and Friendly, 2014, 2016, 2017, 2019).

Accordingly, we find that the regulations’ lack of adjustment of Additional Dependant Care maximum rates creates a disparity with other comparable programs and could make it less likely that these rates will keep up with dependant care costs.

Recommendation 2: Ensure that the regulatory provisions for Additional Dependant Care maximum rates do not result in clients bearing more of the cost of Additional Dependant Care over time.

This recommendation intends to encourage VAC to analyze more granular client information, including GBA Plus factors, as this information becomes available through data improvements, to identify whether the regulations’ maximum rates for Additional Dependant Care have kept pace with the cost of care over time. Depending on the results of that analysis, further actions from VAC may be necessary to fulfill this recommendation and ensure the adequacy of Additional Dependant Care maximum rate provisions.

Conclusion

We initiated this review because of a client complaint made to our office that pointed to potential systemic fairness issues with the Department’s reimbursement of Additional Dependant Care costs. We reviewed VAC client data, OVO complaints, academic and government research, and other sources to determine whether the rules around reimbursement for Additional Dependant Care are fair. Our analysis resulted in two findings.

First, we find it unfair that the regulations do not permit clients attending rehabilitation services other than training to be reimbursed beyond the maximum rate for Additional Dependant Care even in unique or exceptional circumstances. The regulations’ lack of discretion to exceed the maximum rate for Additional Dependant Care for these clients is problematic because it is inconsistent with the purpose of the Rehabilitation Program. In addition, the Department was unable to offer a defensible reason why the regulations failed to provide decision-makers with discretion to exceed the maximum rates for Additional Dependant Care for clients attending rehabilitation services other than training. Discretion is necessary because clients can face unique circumstances (for example, a greater number of dependants requiring care) that lead to substantially higher dependant care costs, and affected clients must absorb the expenses themselves if they need to attend the VAC rehabilitation services that result in these dependant care costs.

Second, the regulations’ lack of adjustment of Additional Dependant Care maximum rates creates a disparity with other comparable programs and may make it difficult for these rates to keep up with dependant care costs over time. While maximum rates for Additional Dependant Care have remained the same since 2006, other comparable rate maximums from CAF LTD VRP and the VAC Rehabilitation Program are either indexed or are included in a flexible overall maximum. This lack of adjustment means that the static Additional Dependant Care maximum rates may result in clients bearing increased costs over time, with potential implications for client participation and success in the Rehabilitation Program. Unchanging maximum rates for Additional Dependant Care may not be adequate because Canadian longitudinal research on the cost of child care suggests that unsubsidized market rate costs have risen over time. Unfortunately, VAC was not able to provide statistical client data that could show whether and how often clients were reaching or exceeding the maximum rates, but VAC may soon be able to conduct such a review using data available through the most recent Rehabilitation contract.

In summary, the Veterans Well-being Regulations disadvantage clients attending rehabilitation services other than training because they do not give the Department any flexibility to provide increased reimbursement for the Additional Dependant Care costs of Veterans and their families in unique or exceptional circumstances. We are also concerned that the maximum rates set out in 2006 have not been adjusted in the last 18 years and may not have kept pace with clients’ actual costs. Our recommendations seek to resolve these systemic fairness issues.

Recommendations to the Minister of Veterans Affairs

• Amend the Veterans Well-being Regulations to include discretion to exceed the maximum rate for Additional Dependant Care when circumstances warrant for clients attending rehabilitation services other than training.
• Ensure that the regulatory provisions for Additional Dependant Care maximum rates do not result in clients bearing more of the cost of Additional Dependant Care over time.

References

Andy’s House Treatment Centre. (2024). Intensive outpatient program. https://andyshouse.com/intensive-outpatient-program/

BACA Eating Disorder Treatment Clinic. (2024). Intensive treatment programs for adults. https://cliniquebaca.com/en/intensive-treatment-programs-for-adults/

Beach, J., Friendly, M., Nguyễn, N., Borges-Nogueira, P., Taylor, M., Mohamed, S., Rothman, L., & Forer, B. (2023). Early childhood education and care in Canada 2021. Child Care Resource and Research Unit. https://childcarecanada.org/publications/ecec-canada/23/04/early-childhood-education-and-care-canada-2021

Canada Revenue Agency. (2018). Income Tax Folio S1-F3-C1, Child care expense deduction. https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-1-individuals/folio-3-family-unit-issues/income-tax-folio-s1-f3-c1-child-care-expense-deduction.html

Canadian Council of Parliamentary Ombudsman. (2022). Fairness by design: An administrative fairness assessment guide. (2nd ed.) https://ombudsman.novascotia.ca/sites/default/files/Fairness_by_Design-June17-900_2022.pdf

Canadian Forces Morale and Welfare Services. (2024). Vocational rehabilitation program. Canadian Armed Forces, Government of Canada. https://cfmws.ca/insurance-finance/insurance/disability-insurance/vocational-rehabilitation-program

Davidson Institute. (2024). 6-week OSI program. https://davidsoninstitute.ca/6-week-osi-program/

Edgewood Health Network. (2024a). Depression, bipolar disorder, and anxiety treatment. https://www.edgewoodhealthnetwork.com/locations/bellwood/programs/inpatient-depression-bipolar-disorder-anxiety-treatment-centre-in-toronto/

Edgewood Health Network. (2024b). Obsessive-compulsive disorder program. https://www.edgewoodhealthnetwork.com/locations/bellwood/programs/obsessive-compulsive-disorder-program/

Foothills Centre for Change. (2024). Foothills Centre for Change treatment programs. https://www.foothillscentre.com/programs/

Friendly, M., Beach, J., Aruran, G., Cossette, A., Lillace, J., & Forer, B. (2024). Early childhood education and care in Canada 2023. Childcare Resource and Research Unit. https://childcarecanada.org/publications/ecec-canada/24/08/early-childhood-education-and-care-canada-2023

Government of Canada. (2005). Canadian Forces Members and Veterans Re-establishment and Compensation Regulations Regulatory Impact Analysis Statement. Canada Gazette, Part I 139(51), 4213–4247. https://publications.gc.ca/gazette/archives/p1/2005/2005-12-17/pdf/g1-13951.pdf

Government of Canada. (2013). Regulations amending the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations. Canada Gazette, Part II (147)(21), 2120–2131. https://gazette.gc.ca/rp-pr/p2/2013/2013-10-09/pdf/g2-14721.pdf

Guèvremont, A., & Findlay, L. (2023). Estimates of parental child care expenses in January to February 2022. Statistics Canada, Government of Canada. https://www150.statcan.gc.ca/n1/pub/36-28-0001/2023007/article/00001-eng.htm

Homewood Health Centre. (2024a). Addiction medicine program – Substance use. https://homewoodhealthcentre.com/treatment-programs/addiction-medicine-program-amp-su/

Homewood Health Centre. (2024b). Eating disorder programs. https://homewoodhealthcentre.com/treatment-programs/eating-disorder-program-edp/

Homewood Health Centre. (2024c). Integrated mood, anxiety and addictions concurrent program – Plus. https://homewoodhealthcentre.com/treatment-programs/integrated-mood-anxiety-and-addictions-concurrent-program-plus/

Homewood Health Centre. (2024d). Traumatic stress injury and concurrent program – Cornerstone. https://homewoodhealthcentre.com/treatment-programs/traumatic-stress-injury-and-concurrent-program-tsicp-cornerstone/

Horizon Health Network. (2024a). Intensive day treatment program. https://horizonnb.ca/services/addictions-mental-health/adult-services/intensive-day-treatment-program-idt/

Horizon Health Network. (2024b). Recovery centre. https://horizonnb.ca/services/addictions-mental-health/adult-services/recovery-centre/

Macdonald, D., & Friendly, M. (2014). The parent trap: Child care fees in Canada’s big cities. Canadian Centre for Policy Alternatives. https://policyalternatives.ca/publications/reports/parent-trap

Macdonald, D., & Friendly, M. (2016). A growing concern: 2016 Child care fees in Canada's big cities. Canadian Centre for Policy Alternatives. https://policyalternatives.ca/publications/reports/growing-concern

Macdonald, D., & Friendly, M. (2017). Time out: Child care fees in Canada 2017. Canadian Centre for Policy Alternatives. https://policyalternatives.ca/timeout

Macdonald, D., & Friendly, M. (2019). Developmental milestones: Child care fees in Canada’s big cities 2018. Canadian Centre for Policy Alternatives. https://policyalternatives.ca/publications/reports/developmental-milestones

Macdonald, D., & Friendly, M. (2020). In progress: Child care fees in Canada 2019. Canadian Centre for Policy Alternatives. https://policyalternatives.ca/publications/reports/progress

Macdonald, D., & Friendly, M. (2022). Game changer: Will provinces and territories meet the new federal child care fee targets? Canadian child care fees 2021. Canadian Centre for Policy Alternatives. https://policyalternatives.ca/gamechanger

Macdonald, D., & Friendly, M. (2023a). Not done yet: $10-a-day child care requires addressing Canada’s child care deserts. Canadian Centre for Policy Alternatives. https://policyalternatives.ca/publications/reports/not-done-yet

Macdonald, D., & Friendly, M. (2023b). Measuring matters: Assessing Canada’s progress toward $10-a-day child care for all. Canadian Centre for Policy Alternatives. https://monitormag.ca/reports/measuring-matters/

Macdonald, D., & Klinger, T. (2015). They go up so fast: 2015 Child care fees in Canadian cities. Canadian Centre for Policy Alternatives. https://policyalternatives.ca/publications/reports/they-go-so-fast

MacLean, M.B., Clow, B., Ralling, A., Sweet, J., Poirier, A., Buss, J., Pound, T., & Rodd, B. (2018). Veterans in Canada released since 1998: A sex-disaggregated profile. Veterans Affairs Canada, Government of Canada. https://cimvhr.ca/vac-reports/fr/data/reports/MacLean%202018_Veterans%20in%20Canada%20Released%20since%201998%20Sex-disaggregated%20Profile.pdf

MacLean, M.B., Keough, J., Poirier, A., McKinnon, K., & Sweet, J. (2019). Labour market outcomes of Veterans. Journal of Military, Veteran and Family Health, 5(1):58–70. https://doi.org/10.3138/jmvfh.2017-0016

Office of the Veterans Ombud. (2023). Our approach. Veterans Affairs Canada, Government of Canada. https://ombudsman-veterans.gc.ca/en/learn-more/our-approach

Searidge Foundation. (2022). Addiction recovery focused drug rehab in Nova Scotia. https://searidgedrugrehab.com/

Stable Grounds. (2024). Our programs. https://thestablegrounds.com/programs-offered/

Statistics Canada. (2022a). Disaggregated trends in poverty from the 2021 Census of Population. Government of Canada. https://www12.statcan.gc.ca/census-recensement/2021/as-sa/98-200-X/2021009/98-200-X2021009-eng.cfm#a4

Statistics Canada. (2022b). More than half of women provide care to children and care-dependant adults in Canada, 2022. Government of Canada. https://www150.statcan.gc.ca/n1/daily-quotidien/221108/dq221108b-eng.htm

Statistics Canada. (2023). Table 98-10-0147-01 Military family structure and household living arrangements: Canada, provinces and territories, census metropolitan areas and census agglomerations with parts. Government of Canada. https://doi.org/10.25318/9810014701-eng

Statistics Canada. (2024). Table 11-10-0013-01 Census families by total income, family type and number of children. Government of Canada. https://doi.org/10.25318/1110001301-eng

Sunlife. (2022a). Long-term care costs in Alberta 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/ab-ltci-summary-en.pdf

Sunlife. (2022b). Long-term care costs in British Colombia 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/bc-ltci-summary-en.pdf

Sunlife. (2022c). Long-term care costs in Manitoba 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/mb-ltci-summary-en.pdf

Sunlife. (2022d). Long-term care costs in New Brunswick 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/new-brunswick-ltci-summary-en.pdf

Sunlife. (2022e). Long-term care costs in Newfoundland and Labrador 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/nfld-ltci-summary-en.pdf

Sunlife. (2022f). Long-term care costs in Northwest Territories 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/nwt-ltci-summary-en.pdf

Sunlife. (2022g). Long-term care costs in Nova Scotia 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/ns-ltci-summary-en.pdf

Sunlife. (2022h). Long-term care costs in Nunavut 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/nunavut-ltci-summary-en.pdf

Sunlife. (2022i). Long-term care costs in Ontario 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/on-ltci-summary-en.pdf

Sunlife. (2022j). Long-term care costs in Prince Edward Island 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/pei-ltci-summary-en.pdf

Sunlife. (2022k). Long-term care costs in Quebec 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/qc-ltci-summary-en.pdf

Sunlife. (2022l). Long-term care costs in Saskatchewan 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/sk-ltci-summary-en.pdf

Sunlife. (2022m). Long-term care costs in the Yukon 2022. https://suncentral.sunlife.ca/content/dam/sunlife/regional/canada/documents/insurance-solutions/yukon-ltci-summary-en.pdf

Sweet, J., Poirier, A., Pound, T., & Van Til, L. (2020). Well-being of Canadian regular force Veterans, findings from LASS 2019 survey. Veterans Affairs Canada, Government of Canada. https://publications.gc.ca/collections/collection_2020/acc-vac/V3-1-7-2020-eng.pdf

Veterans Affairs Canada. (2012a). Definitions for VAC rehabilitation and vocational services and related compensation benefits. Government of Canada. https://www.veterans.gc.ca/eng/about-vac/legislation-policies/policies/definitions/995#vocassistance

Veterans Affairs Canada. (2012b). Rehabilitation related expenses - Other than training. Government of Canada. https://www.veterans.gc.ca/en/about-vac/reports-policies-and-legislation/policies/rehabilitation-related-expenses-other-training

Veterans Affairs Canada. (2023). Vocational rehabilitation and vocational assistance: Training expenses. Government of Canada. https://www.veterans.gc.ca/en/about-vac/reports-policies-and-legislation/policies/vocational-rehabilitation-and-vocational-assistance-training-expenses

Veterans Affairs Canada. (2024). Rehabilitation services and vocational assistance plan: Assessments, development and implementation. Government of Canada. https://www.veterans.gc.ca/en/about-vac/reports-policies-and-legislation/policies/rehabilitation-services-and-vocational-assistance-plan-assessments-development-and-implementation

Veterans Well-being Act, SC 2005, c.21. https://laws-lois.justice.gc.ca/eng/acts/c-16.8/

Veterans Well-being Regulations, SOR/2006-50. https://laws-lois.justice.gc.ca/eng/Regulations/SOR-2006-50/index.html

Women and Gender Equality Canada. (2021). What is Gender-based Analysis Plus. Government of Canada. https://women-gender-equality.canada.ca/en/gender-based-analysis-plus/what-gender-based-analysis-plus.html

Annex A: Requirements for Accessing Additional Dependant Care

For Additional Dependant Care to be reimbursed under the Rehabilitation Program, the following requirements must be met:

• The person taking part in the Rehabilitation Program usually provides unpaid care to the dependant
• It is their responsibility to find “paid temporary substitute care”
• The care is needed to ensure the health and safety of the dependant or to “maintain their activities of daily living”
• The substitute care is necessary when the client is participating in the program, and
• The care is in addition to the paid care that was already provided to the dependant before the caregiver began the program (VAC, 2012b, 2020).

Annex B: Hourly rates for adult home care, lowest and highest level of care needs by province or territory in 2022

Hourly rates by province or territory

Province/Territory	Hourly Rate (Lowest Level of Care Need)	Hourly Rate (Highest Level of Care Need)
Alberta	$31	$70
British Columbia	$25	$75
Manitoba	$23	$80
New Brunswick	$21.50	$75
Newfoundland and Labrador	$25	$65
Northwest Territories	No fees	No fees
Nova Scotia	$18.00	$80
Nunavut	No fees	No fees
Ontario	$10	$100
Prince Edward Island	$31	$70
Quebec	$14	$125
Saskatchewan	$18	$69
Yukon	No fees	No fees

Data taken from Sunlife 2022a-2022m