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Chairman’s update: veterans summit/recent announcements from the minister of veterans affairs – new veterans charter reform

By: Brian N. Forbes
Chairman, Executive Committee, The War Amputations of Canada
Chairman, National Council of Veteran Associations in Canada

May 12, 2015 - The recent Veterans Summit was held on April 14, 2015 in Ottawa at the Canadian War Museum. There were in excess of twenty veterans’ organizations in attendance together with representatives from National Defence, the RCMP and various online organizations. The Summit was an all-day affair chaired by Veterans Affairs Canada Deputy Minister Walt Natynczyk with active participation from the new VAC Minister Erin O’Toole and senior staff from the Minister’s office together with Departmental officials.

As the day progressed it was difficult not to be impressed with the enthusiasm and energy brought to the gathering by the new Minister and Deputy Minister. Indeed, their positive engagement in the overall reform of the New Veterans Charter and the enhancement of the administrative culture within VAC was much appreciated by all in attendance. Both the Minister and the Deputy expressed a desire to be proactive in this particular process and, in all my years of involvement with regard to veterans’ concerns, I do not think that I have seen a more dynamic duo. Of course, time will tell as to whether these good intentions result in substantive improvements in the operation and administration of Veterans Affairs Canada.

As many of you will know, the Minister and “Deputy Walt” (as he likes to be called) have emphasized over recent weeks a Veteran-centric philosophy vis-à-vis the ongoing mandate and operation of the Department. Although much more needs to be done, there is little question, based on our experience of late, that our relationship to VAC has been much improved leading to far more responsiveness to the individual concerns expressed by our Service Bureau in dealing with specific issues and cases. In my recent personal dealings with VAC, I have noticed that the staff and employees of the Department have indeed been revitalized, and we may have passed through the “dark ages” which exemplified the level of communication and working relationship which existed over the last number of years.

As opposed to the state of denial and the abysmal levels of communication which previously existed in VAC, both the Minister and the Deputy, on countless occasions during their presentations to the forum, underlined their joint priority in being prepared to listen and consider the concerns and proposals of veteran stakeholder groups in upgrading veterans legislation including the New Veterans Charter.

In this context you will have noted that the Minister has made a number of announcements over the last six weeks which specifically deal with New Veterans Charter reform and staffing requirements within VAC. In addition, the Deputy has completed a cross-country tour of all district offices of VAC with the specific intent of improving the culture and administration of the Department. I am attaching a copy of the Press Release issued by the Minister’s office concurrent with the Veterans Summit entitled “Minister O’Toole speaks with Veterans’ Groups at Ottawa Summit.” This attachment will provide you with a substantive list of the recent announcements made by the Minister, together with appropriate background papers and the specific proposals laid out on the day of the Summit concerning increasing staffing levels with regard to case managers and new disability benefits employees. With reference to the staffing enhancement annunciated this week, there is little doubt that this announcement finally represents a recognition of reality; however, it must be said that this reversal of policy now being implemented reflects badly on previous Ministers and administrations within VAC. The validity of representations made in the past justifying the cuts and the assurances as to the ability of the Department to handle the volume of cases and applications are, to say the least, highly questionable.

It is fair to say that significant momentum and substantial traction has been developed through the various recommendations brought down by the Minister which are the Government’s attempt to respond to the proposals made by the National Council of Veteran Associations, the Standing Committee on Veterans Affairs, the Veterans Ombudsman and the Veterans Consultation Group with regard to New Veterans Charter reform.

Unfortunately, as I have stated in a number of interviews in national media, the Minister’s announcements reflect, in my judgement, “half measures” and are not fully responsive to the comprehensive recommendations made by the Standing Committee and the aforementioned multiple Advisory Groups including NCVA proposals.

After years of what I have described as unacceptable inertia within VAC, there are solid indications that the first phase of positive incremental change is taking place, and it is our job to maintain the pressure on the Government to complete this vital assignment in addressing the inequities which still remain in the New Veterans Charter.

I would like to make a number of comments and observations concerning these announcements from both a positive and negative perspective:

  • The clear focus on Seriously Disabled Veterans is commendable as it has consistently been the position of The War Amps of Canada/NCVA that the highest priority to the veterans’ community and the Government must be the seriously injured veteran. This prioritization is reflected in the Minister’s proposals particularly with regard to the new Retirement Income Security Benefit (RISB), Critical Injury Benefit (CIB), Family Caregiver Relief Benefit (FCRA) and the enhancements to the Permanent Impairment Allowance.
  • I would reiterate that, based on our experience over the last few months, there has indeed been significant improvement in the ongoing relationship between veterans’ stakeholder groups, the Minister/Deputy and the senior levels of the Department both from an operational and administrative viewpoint.
  • As I have stated, the true litmus test for judging the new hierarchy within VAC will rest on whether our new Minister will continue his commitment to treat the New Veterans Charter as a “Living Charter” and implement further measures to improve the overall culture of the Department. On a number of occasions at the Veterans Summit, Minister O’Toole expressed his commitment to the veterans’ organizations in attendance, and indicated that he would continue to welcome the input and proposals that the individual groups may wish to make in furthering this objective.
  • Bill C-58 has been placed before Parliament, spelling out the specific provisions arising from the Minister’s announcements in the statutory legislation which the Minister intends to have passed before the end of this Parliamentary sitting, i.e., June 2015. It is clear, upon a review of the Bill, that the devil will indeed be in the details, as there are a number of references in the Bill to regulations and policy guidelines which have yet to be formulated to support the general provisions of the Act. It is my considered opinion that, until these regulations et al are finalized, it will not be possible to evaluate the precise eligibility criteria for the newly proposed major benefits and the “factors to be considered” in the administration of the new Law.
  • It is also self-evident that budgetary constraints still exist, as it is my opinion, upon review of the announcements and Bill C-58, that the Minister’s proposals have been structured to “fit into” the budgetary envelope resulting in proposed benefits which are targeted to specific cohort veterans rather than the veteran population at large. The Government fixation with balancing the Budget in this election year remains a restraint on complete New Veterans Charter reform at this time.
  • As I stated to the Minister at the conclusion of the Veterans Summit, much more needs to be done to rectify the voids that have been readily identified in the Charter. The present state of development cannot be considered a total fait accompli but merely a significant first stage of remedial legislation.
    For those who wish more information on the additional areas of the Charter, which need to be addressed at this time:
    • See the NCVA Submission to the Standing Committee of April 2014 for the full scope and extent of the gaps and inequities submitted to the Standing Committee which were largely adopted in the Standing Committee Report of June 2014 “The New Veterans Charter Moving Forward.”
    • See also the NCVA Legislative Agenda of November 2014 approved at NCVA’s Annual General Meeting in Toronto for a comparison of the NCVA proposals, the Standing Committee recommendations and the reply of the former Minister.

In summary form, the following gaps and inequities in the New Veterans Charter remain unaddressed notwithstanding the enactment of Bill C-58:

  • The Earnings Loss Benefit should be elevated from 75% of former military income to 100% in accord with the longstanding and consistent recommendations of the New Veterans Charter Advisory Group, NCVA and the Veterans Consultation Group (or at least to 90% as proposed by the Veterans Ombudsman’s office).

    The current reduction of 25% in income is unacceptable particularly given that this loss of essential revenue is imposed when veterans and their families face a period of rehabilitation as they attempt to re-establish themselves in Canadian civilian society.

    The insurance industry has long taken the position that this form of income diminishment is necessary in relation to disability income replacement so as to ensure that the insured is fully committed to the rehabilitation program. This form of so called “disincentive” allegedly prevents the insured from merely accepting his or her former wage and not pursuing rehabilitation with appropriate effort.

    It has been the opinion of The War Amps/NCVA for many years that this philosophy should not be applied to disabled veterans who, to a large extent, in our experience, are fully engaged in re-establishing themselves insofar as civilian employment.

    Even more importantly, this by-product of the insurance culture has no place in veterans’ legislation when applied to permanently incapacitated veterans. Once it has been determined that a veteran is indeed permanently incapacitated (and not capable of obtaining gainful employment as a consequence of his or her pension disability) the Earnings Loss Benefit should recognize that such a veteran is entitled to 100% income replacement. Any sense of “disincentive” is totally inapplicable in such circumstances given the veteran’s inability, by definition, to return to the employment workplace.

    It is noteworthy that this fundamental proposal as to the increase of the Earnings Loss Benefit has not been addressed by the Government and indeed does not appear to be on the radar of VAC.

    It is also of significance that, in the situation of a permanently incapacitated veteran, once this determination is made, a “career probable earnings” approach should be implemented to ensure that the true impact of the projected career income loss is recognized. This proposal is in accord with the recommendations of the New Veterans Charter Advisory Group, the Standing Committee Report, NCVA and the Veterans Consultation Group and can be implemented by further reform of the Permanent Impairment Allowance/Permanent Impairment Allowance Supplement or, alternatively, a separate evaluation based on the mechanism used by the Canadian Civil Courts to ascertain future loss of income for severely injured plaintiffs.

  • The SISIP Long Term Disability policy needs to be eliminated from veterans’ legislation.

    One of the priority recommendations of the New Veterans Charter Advisory Group, the Standing Committee and the Veterans Ombudsman’s office has been to suggest that SISIP LTD should only apply to non-service related disability. The fundamental proposition that the insurance culture needs to be removed from the compensation made available to veterans and their families is an essential conclusion to this analysis. The compensation of veterans and their dependants should not be a function of the insurance industry whose mandate, in many situations, is to minimize exposure of the insurer’s policy when applied to injured or disabled individuals

    One of the fundamental commitments made by the Government at the time of the enactment of the New Veterans Charter was the recognition that the SISIP LTD program should be eliminated and fully replaced by a liberalized Earnings Loss Benefit when applied to service related disability. The constraints placed on the New Veterans Charter by the restrictive provisions of the SISIP LTD program are still felt to this day and should be removed as soon as possible. This Government commitment made by the Minister and Deputy of the day was part and parcel of the understanding between the veteran stakeholder community and VAC in consideration of the immediate passage of the Charter by Parliament in 2006.

  • Disability awards commensurate with Civil Court’s general damages should be facilitated by VAC.

    This would amount to an increase of approximately $50,000 to the overall grid with appropriate impact on all those receiving disability awards in the adjudicative system.

    It is to be noted that, in lieu of implementing this longstanding recommendation of the aforementioned multiple advisory groups, the Minister has opted to propose a new Critical Injury Benefit in the amount of $70,000. This CIB is limited to the specific circumstances of a transitionally incapacitated veteran and to high end disability award recipients. In effect, Bill C-58 provides that the CIB is payable to a member or veteran who:

    “... establishes that they sustained one or more severe and traumatic injuries or developed an acute disease and that the injury or disease a) was a service related injury or disease; b) was the result of a sudden and single incident that occurred after March 31, 2006; and c) immediately caused a severe impairment and severe interference in their quality of life...”

    It is noteworthy, in this regard, that the CIB is fraught with definitional issues as to who is eligible for this benefit and what “factors are to be considered” by adjudicators in determining the scope and extent of this new provision.

    Although we support the establishment of this innovative CIB in recognition of the plight that Seriously Disabled Veterans confront insofar as the level of impairment and impact on their quality of life, the choice of VAC to compensate only this particular class of veterans as opposed to incrementally increasing all pensions in the disability award system is of concern. The recommendations of all of the multiple advisory groups together with the Standing Committee have suggested, as a basic principle, that the entire grid should be elevated to equate to the general damages awarded by the Canadian Civil Courts.

    It is not without significance that one of our major recommendations to the Standing Committee was that VAC adopt the Exceptional Incapacity Allowance concept founded under the Pension Act in regard to seriously impaired high end veteran pensioners. This allowance has traditionally addressed the impact of a disability suffered by 100% veteran pensioners with reference to their difficulty to cope with their overall incapacity. The introduction of EIA in our judgement to the Charter would augment the limitations of the PIA particularly in the circumstance where a Seriously Disabled Veteran confronts the ravages of age.

  • Improved access to Permanent Impairment Allowance and entitlement to higher grade levels of the allowance needs further evaluation.

    It will be recalled that the Veterans Ombudsman, in his empirical study of the Charter, identified that 50% of Seriously Disabled Veterans were not receiving PIA (and consequently PIAS) and that 90% of these veterans receiving the award were only obtaining grade 3 (the lowest grade).

    The Minister’s proposal to widen the regulatory definition of PIA eligibility to those veterans suffering mobility and self-help concerns (paragraph F) is commendable, but once again does not fully satisfy all aspects of the reform of this important allowance. This is particularly so for those Seriously Disabled Veterans who fail to satisfy the criteria for PIA but also of great significance when one considers that the amount of PIA is a major element of the new Retirement Income Security Benefit (post 65).

    It is recognized that further study by VAC is to take place with the collaboration of the Veterans Ombudsman’s Office to provide more clarity and certainty as to the fundamental access to PIA and the higher grade levels of the allowance. Given our close working relationship with Guy Parent’s team, we hope to have appropriate input in this analysis of PIA eligibility criteria and grade level enhancement.

    I continue to strongly feel that our NCVA proposal to the Standing Committee in this regard is the best approach to improving this access to PIA; i.e., once a veteran is deemed to be permanently incapacitated, the Disability Award received by such a veteran should be the major determinant in assessing his or her grade level of PIA:

    • over 78% Disability Award should equate to a grade 1 PIA
    • between 48% and 78% Disability Award should equate to a grade 2 PIA.

    This form of adjudicative presumption would provide a more simplistic methodology to an overly complex provision of the New Veterans Charter. Not only would this provide administrative efficiency, but also would incorporate the utilization of the Disability Award as a trigger to the higher grade levels for PIA.

  • The Family Caregiver Relief Benefit (FCRB) requires further re-evaluation as it fails to comprehensibly provide adequate financial support for the families of Seriously Disabled Veterans where significant needs of attendance must be provided by a caregiver.

    The newly announced Family Caregiver Relief Benefit will provide eligible veterans with a tax free annual grant of $7,238.00 so that their caregivers – who are often their spouse or other family member – will have flexibility or relief as required.

    This benefit is commendable insofar as it goes as a targeted support so as to allow caregivers appropriate respite or relief, but represents, in my judgement, only one element of the overall concerns confronting the caregivers of Seriously Disabled Veterans in need of attendance. Such families are also facing, in many cases, a significant diminishment in income due to the fact that the caregiver spouse has been forced to give up his or her employment that, when coupled with the veteran’s 25% loss of income under the ELB/SISIP LTD program, often results in a financial crisis in the overall family budget.

    It was my clear position at the Veterans Summit that VAC need not “reinvent the wheel” with regard to such caregiver allowances as the Attendance Allowance, founded under the Pension Act, which has been in place for many decades and is a far more generous provision producing $15,000-$20,0000 a year of non-taxable benefits to those veterans in significant need of attendance.

    It is also highly noteworthy that DND, through its “Attendant Care Benefit” program, provides reimbursement to Seriously Disabled Veterans for payments made to an attendant to look after the Canadian Armed Forces member on a full time basis. This benefit is paid to the CAF member at a daily rate of $100.00 ($3,000.00 a month – $36,000.00 a year). This benefit implicitly represents a recognition that the financial costs of attendants far exceed the need to address respite. More importantly, the serious question remains in the context of the veteran’s transition from DND to VAC as to whether the financial assistance to such families will dramatically drop from the DND program to the VAC FCRB.

    In our considered opinion, unfortunately the VAC FCRB program reflects a half measure at best, and fails to comprehensibly provide adequate financial recognition of the cost to a family where significant levels of attendance must be provided by a caregiver spouse or other family member.

  • Further review of the implications of the Retirement Income Security Benefit (RISB) is required to ensure that seriously disabled veterans have sufficient post 65 financial security.

    The Minister’s announcement as described in Bill C-58 provides specific veterans with a post 65 benefit consisting of 70% of the Earnings Loss Benefit (or SISIP LTD payment) together with 70% of the Permanent Impairment Allowance that the veteran has been receiving from Veterans Affairs, less certain deductions yet to be prescribed by regulation. This provision is somewhat difficult to evaluate without the answers to a number of rather significant questions as to the eligibility criteria and the actual components that would be required under the RISB to determine the various outcomes with regard to individual hypothetical cases.

    What is crystal clear is that the effectiveness of the RISB is contingent on appropriate enhancements to the PIA/PIAS and ELB (SISIP LTD) provisions of the Act. Without such complementary amendments to provide, for example, improved access to PIA and higher grade levels for the allowance, it is clear that a number of moderately or Severely Disabled Veterans at age 65 will be essentially receiving 70% of the Earnings Loss Benefit, which was originally awarded at 75% of previous military service income indexed with a cap of 2% per annum. In our judgement, this would result in less than a satisfactory form of financial security in the traditional retirement years for such disabled veterans. We would have much preferred that the Earnings Loss Benefit be continued for life and that the Earnings Loss Benefit be established at 90%-100% of previous military service income, particularly given the fact that the principal recipients of this post 65 “pension” will be totally incapacitated veterans.

    In our considered judgement, to apply a 70% formula to the post 65 period for a permanently incapacitated veteran, based on a public/private sector pension model, is not appropriate when it is recognized that the plight of such Seriously Disabled Veterans post 65 remains unchanged, and his or her financial costs of living continue to be essentially the same.

I would further mention that, as part of the afternoon session at the Veterans Summit, working groups were established to review not only New Veterans Charter concerns but also other priorities of the veterans’ community. As a consequence, I had an opportunity to underline specific elements of the NCVA Legislative Agenda approved at last year’s Annual Meeting.

One interesting discussion related to the whole question of cutting red tape within VAC and the various tools that could be employed to reach this objective. You will have noted that both the Minister and the Deputy have adopted a philosophy which is rather compelling in that VAC should “get to yes faster.” Implicit in this affirmative pronouncement is the fact that layers of bureaucracy and undue red tape within the Department must be eliminated to create a more administratively efficient VAC.

In my view, our submission on red tape cutting is highly material in that our proposals largely focus on the utilization of presumptions to improve the speed and results to be achieved from the adjudicative branch of the Department.

I am pleased to advise that the Deputy has enthusiastically engaged in this process and we will be holding meetings over the course of the next few weeks with senior officials of VAC to further these initiatives.

I will keep you apprised as to developments on all fronts, as the newly conceived legislation, regulations and policy statements proceed to full implementation over the course of the next few months.

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Danita Chisholm
Executive Director, Communications  
1 877 606-3342