Vol. 147, No. 21 — October 9, 2013
Registration
SOR/2013-158 September 27, 2013
WAR VETERANS ALLOWANCE ACT
Regulations Amending the Veterans Allowance Regulations
P.C. 2013-935 September 27, 2013
His Excellency the Governor General in Council, on the recommendation of the Minister of Veterans Affairs, pursuant to section 25 (see footnote a) of the War Veterans Allowance Act (see footnote b), makes the annexed Regulations Amending the Veterans Allowance Regulations.
REGULATIONS AMENDING THE VETERANS ALLOWANCE REGULATIONS
AMENDMENT
1. Section 28 of the Veterans Allowance Regulations (see footnote 1) is repealed.
COMING INTO FORCE
2. These Regulations come into force on October 1, 2013, but if they are registered after that day, they come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Background
On May 1, 2012, the Federal Court ruled in Manuge v. the Queen that the offset of the Pension Act disability pension from the Department of National Defence (DND) Service Income Security Insurance Plan-Long Term Disability (SISIP-LTD) benefit was in breach of this insurance contract. The Court concluded that SISIP can only deduct income replacement benefits. Since disability pensions are an entitlement for loss of personal amenities, and not a form of income replacement, they cannot be deducted in the calculation of SISIP-LTD benefits. In rendering its decision, the Federal Court indicated that programs at Veterans Affairs Canada (VAC) were not affected by its decision.
On May 29, 2012, the ministers of Veterans Affairs and National Defence announced that the Government of Canada would not appeal the Federal Court’s decision, and that the Government would take further action by no longer deducting the Pension Act disability benefits in the calculation of three types of VAC benefits: Earnings Loss (EL), Canadian Forces Income Support (CFIS), and War Veterans Allowance (WVA) benefits. The decision for the Government of Canada to apply the Federal Court of Canada’s ruling to VAC’s benefits was based on respecting the spirit of the Court’s verdict and harmonizing the calculation methods for similar DND and VAC benefits.
Veterans Affairs Canada’s EL benefit is an income replacement to ensure that those who do not qualify for SISIP-LTD benefits receive a comparable level of financial benefits from VAC while undergoing a VAC rehabilitation program. VAC’s CFIS benefit provides an income supplement for modern-day veterans who have successfully completed a VAC-approved rehabilitation program and whose EL benefit has ended, yet have a very low family income. The WVA benefit acts as a social safety net providing income support to assist low income veterans of the Second World War and the Korean War, and their eligible survivors and orphans in meeting their basic needs.
As of July 1, 2012, offsetting of VAC’s Pension Act disability pension from the SISIP-LTD benefit ceased. As of October 1, 2012, this same offset ended for VAC’s EL and CFIS benefits. On June 26, 2013, Bill C-60 received royal assent, making the necessary legislative changes to the War Veterans Allowance Act (WVA Act) to cease deducting VAC’s disability pension benefits when calculating WVA benefits. These legislative changes came into effect on October 1, 2013.
In addition to providing benefits to veterans, VAC also has legislated responsibilities to provide benefits to certain civilian groups in recognition of their close support of Canada’s Armed Forces during wartime. One of the most relevant pieces of legislation, the Civilian War-related Benefits Act (CWRB Act), authorizes the provision of disability pension benefits in accordance with the Pension Act, and income support benefits in accordance with the WVA Act to individuals who served in recognized civilian groups (e.g. Canadian salt water fishers, auxiliary services personnel, Newfoundland Overseas Forestry Unit), as well as their survivors.
Veterans Affairs Canada also has legislative responsibility to those who receive pensions, grants or allowances paid in respect of death or injury sustained in the 1917 Halifax Explosion, under the Halifax Relief Commission Pension Continuation Act (HRCPC Act). This Act, passed in February 1976, repealed the parent Act respecting the Halifax Relief Commission, and authorized the continuation of pensions, grants or allowances paid by the Halifax Relief Commission to those who suffered as a result of the explosion. The legislation appears spent, as there are no known persons living who are in receipt of, or might qualify for, the benefits.
The disability pensions paid to these individuals under the CWRB and HRCPC acts is deducted from the calculation of income support benefits received from VAC.
Issue
Currently, calculations to pay similar VAC income support and income supplement benefits are being done differently. Benefits provided to veterans (EL, CFIS and WVA benefits) have ceased offsetting disability pension benefits in their calculations; however, disability pension benefits continue to be offset for eligible individuals under the CWRB Actand the HRCPC Act. This practice is inequitable.
Objectives
The regulatory amendment ensures equity in the calculation of VAC benefits for both veterans and other individuals who are eligible for VAC income support and income supplement benefits.
Description
The Veteran Allowance Regulations, which outline the purposes and provisions of the WVA Act, include a provision to allow the offsetting of disability pension benefits paid under the CWRB and HRCPC acts.
This proposal repeals section 28 of the Veterans Allowance Regulations to allow VAC to cease deducting disability pension benefits when determining income support benefits payable to eligible individuals under the CWRB Act and the HRCPC Act.
Consultation
There were no formal consultations with respect to this proposal. However, this amendment is relieving in nature.
Veterans’ organizations have expressed that they are pleased with the Federal Court ruling regarding the deduction of the Pension Act disability benefits from the Canadian Forces’ SISIP-LTD benefit, and that VAC will no longer consider disability pensions when calculating VAC benefits for veterans. They will also be pleased that VAC is extending this to those civilian groups who are receiving benefits from VAC in recognition of their support to the Canadian Armed Forces during wartime.
“One-for-One” Rule
The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.
Small business lens
This regulatory proposal does not increase or decrease administrative burden or compliance costs on small businesses.
Rationale
Veterans Affairs Canada has provided services and benefits to certain civilian groups who served alongside the Canadian Armed Forces during wartime in recognition and appreciation for their contributions and personal sacrifice during often difficult and dangerous conditions.
Given that VAC has made the required amendments to cease offsetting VAC pension benefits when calculating the EL, CFIS and WVA benefits for veterans, the same is extended to these civilian groups. This will ensure consistency in how these benefits are calculated in that they will all cease deducting disability pension benefits in the calculations of income support and income supplement benefits.
Veterans Affairs Canada has determined there are currently no recipients of benefits under the HRCPC Act. However, given the unlikely scenario that a new applicant may come forward, and to maintain consistency in how benefits are calculated, this proposal will also amend the Veterans Allowance Regulations to cease offsetting disability benefits payable under the HRCPC Act.
The amendment will provide eligible CWRB civilians the opportunity to improve and/or maintain their quality of life by providing them with additional financial resources. There are over 500 civilians eligible for benefits under the CWRB. It is estimated that in 2013–14, an additional 50 civilians previously unable to receive the income support benefit due to excess income as a result of receiving disability pension benefits will be eligible to receive these benefits because of this regulatory change. In addition, as CWRB serves as a gateway for certain civilians to access other health care benefits, some may also become eligible for other VAC benefits, such as treatment benefits, long-term care and Veterans Independence Program services.
The financial cost to VAC of the regulatory amendment is estimated at an average annual cost of $72,800 over the next 10 fiscal years. Given the advanced age of these eligible civilians, the cost is expected to decline over the next number of years to $37,000 by 2023–24.
By continuing to make improvements to existing programs, the Government of Canada further demonstrates that it continues to evolve its programs to meet the needs of older clients in conjunction with the ever-changing social requirement.
Implementation, enforcement and service standards
The regulatory changes will come into force on October 1, 2013.
Upon implementation, VAC will re-adjudicate and review the financial information available on file of existing recipients, or request updated income information from those civilians who may become eligible to receive income support benefits under the CWRB Act, due to pension benefits no longer serving as an offset. For both groups, VAC will issue individualized letters explaining any changes in their benefit payments. Any new applications for CWRB benefits received after October 1, 2013, will be adjudicated in accordance with the updated regulatory change so that disability pension benefits will not offset VAC-provided income support benefits.
The existing service delivery infrastructure will be utilized to implement the proposed change with minor operational changes being required to current policies, processes, systems and applications, letters and forms.
Veterans Affairs Canada’s Audit and Evaluation Division conducts annual audits and evaluations of VAC’s programs. Results are published on VAC’s Web site regularly. In addition, VAC’s service standards for processing times for new applications and requests for review of previous decisions and are available on the Department’s Web site (www.vac-acc.gc.ca).
Contact
Janice Burke
Senior Director
Strategic Policy Integration
Veterans Affairs Canada
161 Grafton Street
P.O. Box 7700
Charlottetown, Prince Edward Island
C1A 8M9
Telephone: 902-566-8160
Email: Janice.Burke@vac-acc.gc.ca
- Footnote a
S.C. 2000, c. 34, s. 80 - Footnote b
R.S., c. W-3 - Footnote 1
C.R.C., c. 1602