Vol. 149, No. 15 — July 29, 2015

Registration

SOR/2015-197 July 16, 2015

CANADIAN FORCES MEMBERS AND VETERANS RE-ESTABLISHMENT AND COMPENSATION ACT

Regulations Amending the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations

P.C. 2015-1100 July 16, 2015

His Excellency the Governor General in Council, on the recommendation of the Minister of Veterans Affairs, pursuant to subsections 40.1(5) (see footnote a), 40.2(5) (see footnote b), 40.3(5) (see footnote c) and 40.4(5) (see footnote d), section 41 (see footnote e), subsection 44.1(3) (see footnote f) and sections 63 (see footnote g), 65.4 (see footnote h) and 94 (see footnote i) of the Canadian Forces Members and Veterans Re-establishment and Compensation Act (see footnote j), makes the annexed Regulations Amending the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations.

REGULATIONS AMENDING THE CANADIAN FORCES MEMBERS AND VETERANS RE-ESTABLISHMENT AND COMPENSATION REGULATIONS

AMENDMENTS

1. Paragraph 22(c) of the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations (see footnote 1) is replaced by the following:

2. Paragraph 23(c) of the Regulations is replaced by the following:

3. The Regulations are amended by adding the following after section 46:

RETIREMENT INCOME SECURITY BENEFIT

46.1 For the purposes of paragraph 40.2(1)(a) of the Act, the prescribed date is July 1, 2025.

46.2 An application for a retirement income security benefit shall be in writing and shall include

46.3 (1) The following sources are prescribed for the purposes of the description of variable C in subsections 40.1(4) and 40.2(4) of the Act:

(2) Any benefits or amounts payable to the veteran for a dependent child or in respect of the veteran’s deceased spouse or common-law partner are not to be included under subsection (1).

46.4 (1) The following sources are prescribed for the purposes of the description of B in subsections 40.3(4) and 40.4(4) of the Act:

(2) Any benefits or amounts payable to the survivor for a dependent child are not to be included under subsection (1).

46.5 If an amount from a source referred to in subsection 46.3(1) or 46.4(1) is paid other than on a monthly basis during a calendar year, it is to be considered for the purpose of the calendar year in which it is paid and converted into an amount payable for a month by dividing the total amount paid for that year from that source by 12.

46.6 (1) A veteran or survivor who is in receipt of a retirement income security benefit shall

(2) For the purposes of section 40.6 of the Act, the Minister may suspend the payment of a retirement income security benefit to a person who fails to comply with paragraph (1)(b) until the information or documents are provided.

(3) Before suspending the payment, the Minister shall provide the person with written notification of the reasons for the suspension and the effective date of the suspension.

46.7 (1) For the purposes of section 40.6 of the Act, the Minister may cancel the payment of a retirement income security benefit to a person if

(2) On cancelling the payment, the Minister shall provide the person with written notification of the reasons for the cancellation, the effective date of the cancellation and their rights of review.

46.8 (1) The total value of A and B in subsections 40.1(4) and 40.2(4) of the Act shall be adjusted on January 1 of each year in accordance with the percentage increase to the Consumer Price Index for the year ending on September 30 of the previous year.

(2) The value of A in subsections 40.3(4) and 40.4(4) of the Act shall be adjusted on January 1 of each year in accordance with the percentage increase to the Consumer Price Index for the year ending on September 30 of the previous year.

(3) The Consumer Price Index is the average all-items Consumer Price Index for Canada (not seasonally adjusted) published by Statistics Canada.

4. The Regulations are amended by adding the following after section 48:

CRITICAL INJURY BENEFIT

48.1 An application for a critical injury benefit shall include medical reports or other records that document the member’s or veteran’s injury or disease, the diagnosis and the nature and duration of treatment received.

48.2 The presumptions set out in section 50 apply with any necessary modifications to applications for a critical injury benefit.

48.3 For the purpose of subsection 44.1(2) of the Act, the Minister shall consider whether the member or the veteran

48.4 For the purpose of subsection 44.1(1) of the Act, a sudden and single incident is a one-time event — including motor vehicle accidents, falls, explosions, gunshot wounds, electrocution, and exposure to chemical agents — in which the member is abruptly exposed to external factors.

5. The portion of section 62 of the Regulations before paragraph (a) is replaced by the following:

62. A person who receives a critical injury benefit, a detention benefit, a death benefit or a disability award equal to or greater than the amount set out in column 3 of Schedule 3 to the Act as adjusted in accordance with section 63, that corresponds to class 20 set out in column 1 of that Schedule is eligible, on application, for the payment or reimbursement of fees for financial advice, to a maximum of $500, relating to the award or benefit if

6. The portion of subsection 63(2) of the Regulations before paragraph (a) is replaced by the following:

(2) The amounts set out in column 2 of items 2.2, 3 and 4 of Schedule 2 to the Act and all the amounts in column 3 of Schedule 3 to the Act shall be adjusted on January 1 of every calendar year so that the amount payable for that year equals the product obtained by multiplying

7. The Regulations are amended by adding the following after section 65:

PART 3.1

FAMILY CAREGIVER RELIEF BENEFIT

65.1 An application for a family caregiver relief benefit shall be made in writing and shall include

65.2 For the purposes of paragraph 65.1(1)(d) of the Act, the veteran shall

65.3 For the purposes of subsection 65.1(2) of the Act, the Minister shall consider only whether the veteran’s state of physical, mental or cognitive health is not likely to substantially improve for at least 12 months.

65.4 For the purposes of subsection 65.1(3) of the Act, the Minister shall consider only whether, when the person referred to in paragraph 65.1(1)(c) of the Act is unavailable,

65.5 The family caregiver relief benefit shall be paid in a single payment.

65.6 The annual amount referred to in section 65.2 of the Act is to be adjusted on January 1 of each year in accordance with the percentage increase to the Consumer Price Index for the year ending on September 30 of the previous year.

65.7 (1) For the purposes of paragraphs 65.1(1)(b) and (c) and subsections 65.1(2) and (3) of the Act, “care” means any activity that is necessary for the health, welfare, maintenance and protection of a person.

(2) For the purposes of paragraph 65.1(1)(c) and subsection 65.1(3) of the Act, “home” in relation to a veteran, means the dwelling, other than a health care facility, in which the veteran normally resides.

8. Subsection 68(1) of the Regulations is replaced by the following:

68. (1) An application referred to in section 83 of the Act shall be in writing and, unless circumstances beyond the applicant’s control necessitate a longer period, shall be made not later than 60 days after

COMING INTO FORCE

9. (1) These Regulations, except for sections 1, 2, 4, 5, 6 and 8, come into force, or are deemed to have come into force, on July 1, 2015.

(2) Sections 1, 2, 4, 5, 6 and 8 come into force on the later of July 1, 2015 and the day on which these Regulations are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: Veterans Affairs Canada has identified areas for improvement in its benefits which would improve its capacity to meet the need of Canadian Armed Forces members, veterans and survivors. To address these areas, the Canadian Forces Members and Veterans Re-establishment and Compensation Act has been amended to include three new benefits and authorities to help streamline the transition process from military to civilian life. To support these initiatives, regulatory changes were required to the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations (the Regulations).

Description: These amendments to the Regulations support implementation of three new benefits: the retirement income security benefit, the critical injury benefit and the family caregiver relief benefit. The regulatory changes also allow the 60-day period to apply for a review of a decision made prior to release to begin the day after the member’s release from the Canadian Armed Forces (the review period for decisions made after the release will continue to be the day on which the applicant receives the notice of the decision).

Cost-benefit statement: Over the first 10 years of implementation, these regulatory changes are expected to benefit annually up to 635 retirement income security benefit recipients and 471 family caregiver relief benefit recipients, as well as a total of 132 critical injury benefit recipients. This results in a net present value cost of $67.4 million to Veterans Affairs Canada. All costs related to these amendments will be incurred by the Department, and all benefits related to these amendments will be received by the eligible Canadian Armed Forces members, veterans and survivors.

“One-for-One” Rule and small business lens: The “One-for-One” Rule does not apply to these amendments, as there is no administrative cost to business. The amendments do not impose administrative burden or compliance costs on small business.

Background

The Canadian Forces Members and Veterans Re-establishment and Compensation Act, commonly referred to as the New Veterans Charter (NVC), came into force in 2006. The NVC was designed to meet the evolving needs of Canadian Armed Forces (CAF) members, veterans and their families, and offers a wide range of benefits and services to ensure that these men and women receive the care and support that they need and deserve. The Canadian Forces Members and Veterans Re-establishment and Compensation Regulations (the Regulations) were also implemented in 2006 to support the NVC. Since the NVC’s implementation, findings from parliamentary committees, advisory groups, veterans’ organizations, the Veterans Ombudsman, as well as the research and evaluations of Veterans Affairs Canada (VAC), have identified gaps in benefits and services. Some of these concerns have been addressed through the inclusion of the following three new benefits and transition provisions in the NVC.

Retirement income security benefit

A number of programs and services are currently in place to ensure that the health, rehabilitation and financial needs of Canada’s veterans are met. These benefits include targeted financial supports like the Earnings Loss (EL) benefit, which can provide financial compensation until age 65 for the economic impact career-ending injuries can have on a veteran’s earning capacity. However, the Government of Canada recognizes that service-related injuries and illnesses can directly impact a veteran’s ability to save for retirement.

The new Retirement Income Security Benefit (RISB) addresses that challenge head-on by providing financial stability to moderately to severely disabled CAF veterans — those who are receiving the EL benefit due to being “totally and permanently incapacitated” as a result of their service to Canada. The RISB provides lifelong, taxable monthly income support beginning at age 65, when the EL benefit comes to an end. The RISB ensures that an eligible veteran’s total annual income is at least 70% of what he or she received in VAC financial benefits before age 65. Monthly payments would be calculated on a case-by-case basis, taking into account how much the veteran was receiving before age 65 and other sources of income he or she may have beyond age 65.

It is critical that veterans have peace of mind when it comes to support for their families. That’s why this income support would also be extended to families through continued monthly payments to the veteran’s survivor. In keeping with VAC’s veteran-centric approach, most veterans and survivors will be contacted by VAC when they become eligible for this benefit.

Critical injury benefit

The new Critical Injury Benefit (CIB) provides a $70,000 tax-free award for CAF members and veterans who, since April 2006, experienced a severe and traumatic injury or developed an acute disease caused by a sudden and single event which resulted in an immediate and severe impairment and interference in quality of life. This benefit is in recognition of the immediate stress and hardship a CAF member or veteran experiences after a traumatic incident. It spans the time between the initial incident and when the CAF member or veteran becomes medically stable.

The CIB payment will be paid directly to the CAF member or veteran and is separate and apart from disability award payments. The CIB focuses on those who need it the most: veterans who endure sudden and severe injury or disease while in the line of duty.

As part of the Department’s continued commitment to veteran-centric care, and in order to reduce wait times, VAC employees will proactively contact veterans who have experienced a severe service-related injury or disease to discuss this new benefit.

Family caregiver relief benefit

VAC created the Family Caregiver Relief Benefit (FCRB) to recognize the vital contribution of informal caregivers to the health and well-being of veterans with a severe and permanent service-related injury. The new FCRB will provide eligible veterans with an annual tax-free grant of $7,238. In line with efforts to streamline programs and eliminate red tape, this new benefit has been designed to avoid as much paperwork as possible for those who need it. It will provide informal caregivers relief while ensuring that veterans continue to get the support they need.

Informal caregivers, who are usually spouses, common-law partners, adult children, parents or other family members, support veterans with a severe and permanent injury by doing things like arranging direct care for the veteran, making appointments, coordinating household tasks and providing basic assistance with daily living. This benefit would allow the caregiver to take time off and recharge if needed, knowing that someone else will be providing the vital services and support they have been providing. This funding could be used for relief options such as covering the cost of having a professional caregiver come into the home or covering the cost for another family member or friend to travel to the veteran’s home.

Transition

To improve the transition process, the NVC was amended to provide the Minister, where not already provided, the authority to consider and make eligibility decisions for NVC benefits and services from CAF members prior to the member’s release from the CAF, as opposed to waiting until the member is released. For those deemed eligible, the provision of these benefits and services does not begin until the day following the member’s release from the CAF. If a person is dissatisfied with a decision made by the Minister, the Regulations provide for a 60-day time period to apply for a review of that decision, unless exceptional cases warrant a longer period. Before these regulatory amendments were made, the 60-day period for review of all applications began on the date the person received notification of the initial decision.

Issues

The creation of the RISB, the CIB and the FCRB has been achieved through amendments to the NVC. These amendments require or authorize that certain aspects of these three new benefits be detailed in the Regulations to support the benefits and explain how they are to be implemented. Without these regulatory changes, these benefits would not have been implemented in the intended manner.

In addition, the 60-day time period to apply for a review disadvantaged some CAF members who received an eligibility decision for a NVC benefit or service prior to their release. This is because pertinent information which may affect the outcome of their review may not be available until after their release.

Objectives

The objectives of these regulatory amendments are to

Description

The regulatory amendments related to the RISB and the FCRB were deemed to have come into force on July 1, 2015 and the remaining regulatory amendments came into force on the day the Regulations were registered. They contain the following elements.

Administrative amendment

The Regulations have been updated to reference relevant provincial (Quebec) legislation, that is, the name of the Quebec Pension Plan legislation.

Retirement income security benefit

The new section of the Regulations entitled “Retirement Income Security Benefit” supports the RISB provisions of the NVC by prescribing information necessary to administer and calculate the benefit.

Given the similarity in benefits between VAC and the Service Income Security Insurance Plan–Long Term Disability (SISIP–LTD), and the fact that some veterans may have chosen to receive their benefit solely through SISIP–LTD, the Regulations provide a RISB eligibility to the SISIP–LTD veterans who have reached 65 years of age on or after April 1, 2006, but before July 1, 2025. The date of July 1, 2025, will provide sufficient time for all current and future CAF veterans to be made aware of the RISB and be enrolled in VAC programs.

As per the NVC, where VAC has sufficient information to determine the eligibility of a veteran for RISB, the requirement for a formal application would be waived, in order to reduce administrative burden. For those cases where a veteran chooses to apply, for example, the application requirements for the RISB are included in the Regulations. Applications are to be made in writing; must include a declaration verifying the accuracy of the information; and, upon request, must include any other information or documentation that may be needed. Providing this information will assist VAC in establishing RISB eligibility and the amount of the benefit to be paid to CAF veterans or survivors.

The Regulations list sources of income to be considered when calculating the amount of the RISB payable to a CAF veteran or survivor, such as retirement, employment, and social benefits provided by the Government of Canada; EL benefits and permanent impairment allowance benefits under the NVC; employer-sponsored pension plans and long-term disability plans (including SISIP–LTD); economic loss benefits under the Government Employees Compensation Act and provincial workers’ compensation legislation; and employment earnings. Information regarding income from other federal government programs would be accessed, when possible, directly from the applicable department to relieve the burden for the veteran. These sources of income are considered in the RISB calculation to ensure that financially vulnerable CAF veterans and survivors receive additional financial support, since they were unable to save sufficiently for retirement. Veterans who participate in the labour market prior to and/or following the end of their military career are more likely to have made contributions to retirement programs and, thus, have other sources of income in retirement. However, private savings, such as Registered Retirement Savings Plans (RRSPs) and other investments, have not been included in the incomes to be considered in calculating the RISB. As well, incomes that the veteran receives for a dependent child or as a result of the veteran’s deceased spouse/common-law partner will be exempt from these deductions. Similarly, income paid to the survivor in respect of the veteran will be considered in the calculation of the survivor’s RISB, but not income received for a dependent child.

Any deductions referenced above that are not paid on a monthly basis (e.g. only once or a few times per year), will be converted into a monthly amount, for the purpose of that calendar year, by dividing the total amount for that year by 12. This will assist in ensuring consistent RISB payments month over month.

In addition, the Regulations require those receiving the RISB to inform VAC of any changes to their sources of income (a reminder will be included in regular correspondence related to the RISB). For example, if the person’s situation changed and there was no longer employment income, by informing VAC of the change, employment income would no longer be considered in the RISB calculation. This would result in an increase to, or possibly the commencement of, the RISB payment. Also, upon request, any other documents or information necessary to help in assessing the person’s continued eligibility or the amount of the RISB would need to be provided. If VAC’s request for additional documents or information is not met, then payment of the RISB may be suspended. If after six months from the date of the suspension the request for information or documents is still not met, or if it is found that false or misleading information was provided, the RISB may then be cancelled. Under the Regulations, VAC would advise the person in writing of the reasons for and the date of the suspension or cancellation and the person’s rights to review of a decision to cancel the RISB. These provisions allow VAC to administer the benefit while ensuring CAF veterans and survivors receive the RISB for which they are entitled.

Lastly, the regulatory amendments provide for the amount of the RISB to be adjusted each January 1, using the percentage increase to the Consumer Price Index for the previous year. The annual adjustment would be applied to the guaranteed income levels established for CAF veterans and survivors at age 65. Indexing the guaranteed income levels (in the same manner as other financial benefits under the NVC) will allow the RISB to keep pace with the cost of living.

Critical injury benefit

A new section in the Regulations entitled “Critical Injury Benefit” bolsters the provisions of the NVC pertaining to the CIB, by detailing the information and other requirements necessary to implement this benefit. For example, as per the NVC, where VAC has sufficient information to determine the eligibility of a veteran for CIB, the requirement for a formal application would be waived in order to reduce administrative burden. If VAC is unable to waive the application requirements, the Regulations include the requirement for CIB applications to include any reports or records that document the injury or disease and the treatment received. As well, the treatment of evidence as it relates to the application will be governed by the same presumptions as those used for the disability award. These two provisions will ensure that VAC has the documentation required and the guidance needed for determining eligibility to the CIB.

Factors and additional information relevant to interpreting the eligibility provisions set out in the NVC are also contained in the Regulations. In determining the severity of the CAF member’s or veteran’s impairment and impact on quality of life, VAC will consider the existence of a number of factors relating to the nature and extent of the injuries sustained (e.g. amputation, blindness), the duration and type of the medical care received (e.g. length of hospital admittance or admission to an intensive care unit) and the type of care required (e.g. assistance with personal care needs). These factors were chosen based on a file and literature review of the most serious injuries, and analysis of like benefits in other jurisdictions. The Regulations define a “sudden and single incident” as a one-time event where the CAF member is abruptly exposed to external factors and provide some examples, thereby clarifying for those eligible, as well as for departmental decision makers, the types of incidents this benefit is meant to cover.

The Regulations provide for an annual increase (i.e. indexing) to the CIB. The CIB will be indexed in the same manner as other benefits contained in Part 3 of the NVC, all of which relate to compensation for service-related injuries and disease. Finally, the Regulations provide that individuals who receive the CIB will be eligible for reimbursement of fees for financial advice up to a maximum of $500. The reimbursement of these fees is also provided to recipients of other lump-sum NVC benefits such as the death benefit and disability award, and will assist those eligible for the benefit with obtaining advice on how to manage the CIB payment.

Family caregiver relief benefit

The new section of the Regulations entitled “Family Caregiver Relief Benefit” supports the creation of the FCRB in the NVC by specifying information and requirements necessary for the provision of the benefit. For example, the Regulations state that FCRB applications must be made in writing and include: the name and date of birth of the unpaid caregiver; a declaration verifying the accuracy of the information provided; and, upon request, any other information or documentation necessary to help establish eligibility. Including this requirement in the Regulations will assist VAC in determining eligibility in a timely manner.

The Regulations provide additional FCRB eligibility requirements as permitted by the NVC. In order to be eligible, the CAF veteran must attest each year that the money will be used to provide relief to the caregiver. The need to attest to the use of the funds was made an eligibility requirement, to ensure that the FCRB paid to the veteran is used to provide relief to the informal caregiver. The CAF veteran must also require at least one of the following: a level of care/supervision, without which, the veteran would be required to be admitted to an institution (i.e. nursing home, long-term care facility); help/guidance with personal care needs such as dressing, eating, bathing; direction/supervision when completing these personal care needs; or daily supervision and is not safe when left alone. These eligibility requirements were selected to help identify veterans, who while still living at home, would require an informal caregiver. They also reflect the nature and intensity of the care that the informal caregiver would provide or coordinate, without which the veteran would not be able to remain at home.

Additionally, the Regulations contain criteria, factors, and definitions relevant to interpreting the eligibility provisions set out in the NVC. For example, in determining if the veteran requires ongoing care, VAC will consider whether the veteran’s state of health is unlikely to substantially improve for at least 12 months. In deciding if the unpaid caregiver plays an essential role in the veteran’s ongoing care, VAC will consider whether the provision or coordination of the care would be compromised by the caregiver’s absence and the health of the veteran placed at risk. The use of the words “care” and “home” for the purposes of the FCRB are also defined in the Regulations, which provides clarity to both applicants and departmental officials on their meaning and how these words are to be interpreted.

Lastly, a provision that explains that the FCRB payment will be made in a single amount and that the annual increase (i.e. indexation) to the FCRB will be the same as the previous year’s increase to the Consumer Price Index is contained in the Regulations. This annual adjustment mechanism was chosen to be consistent with the method of indexation used for most other financial benefits provided under the NVC.

Transition

The amendment to section 68(1) of the Regulations allows for the 60-day time period for a person to apply for a review of a decision, made prior to release, by the Minister on NVC benefits and services to begin the day following the member’s release from the CAF, as opposed to the day they receive notice of the decision. This applies only in cases where the decision was made prior to the member’s release, and where the benefit or service begins to be payable or provided the day following their release from the CAF. For decisions made after release, the review period will continue to begin the day on which the applicant receives the notice of the decision. This amendment will support CAF members in obtaining information relevant to the review of the decision, which may only be available closer to, or after, their release from the CAF.

Regulatory and non-regulatory options considered

VAC considered two options: maintaining the regulatory status quo or updating the Regulations to provide the necessary regulatory framework and supports for the new benefits outlined in the NVC.

Status quo approach — Without these regulatory amendments, the three new benefits (the RISB, the CIB and the FCRB) could not be implemented. The benefit of this approach would be that no new financial costs would be incurred by the Government of Canada. However, some “totally and permanently incapacitated” CAF Veterans with service-related injuries/conditions would continue to be financially at risk after the age of 65; severely injured CAF members and veterans would continue to feel that the impact of their service-related injury/disease prior to stabilization is not recognized; some CAF veterans would not have the additional funds to provide their caregiver relief while ensuring their continued care; and CAF members who applied to VAC for a review of a decision made prior to the member’s release on some NVC benefits or services could continue to be disadvantaged, as they might not have sufficient time to gather relevant documentation affecting the review prior to release. This approach was not chosen.

Regulatory approach — The three new benefits, as created by the NVC, require supporting regulations in order to be implemented. Under this recommended option, these three new benefits may be paid to eligible CAF members, veterans and survivors. The provisions regarding eligibility ensure that the new benefits accrue to their intended recipients, for the intended purposes. As well, the Regulations ensure consistency in consideration among applicants for each benefit and also some uniformity in certain aspects of the new benefits (e.g. indexation, application requirements) with other NVC benefits. The amendments also provide a reasonable amount of time to apply for a review of a decision made prior to the member’s release on some NVC benefits or services, which could only be achieved through amending the existing provision of the Regulations (section 68) dealing with certain reviews of decisions.

Benefits and costs

The following analysis provides an overview of the costs and benefits of the regulatory amendments. The table below highlights the benefits and costs, factoring in a discount rate of 7% per year as recommended by the Treasury Board of Canada Secretariat. The present value (PV) of total benefits is valued at $66.5 million over the 10-year period, while costs are valued at $67.4 million, yielding a ratio of the benefits-to-costs of 0.99.

Cost-benefit statement (see footnote 2)
  First Year 2015–16 Final Year 2024–25 Total (PV) Annualized Equivalent
A1. Quantified impacts (in millions of Canadian dollars, 2015–16 constant dollars)
Benefits Eligible CAF members, veterans and survivors $10.6 $14.1 $66.5 $9.5
Costs Government of Canada (VAC) $11.5 $14.1 $67.4 $9.6
Net benefits ($0.9) ($0.1)
B. Quantified impacts in non-dollars (in number of recipients of the new benefits)
Positive impacts Retirement income security benefit — Eligible CAF veterans and survivors 120 635 N/A 325
Critical injury benefit — Eligible CAF members and veterans 114 2 N/A 13
Family caregiver relief benefit — Eligible CAF veterans 245 471 N/A 362
Negative impacts None identified
C. Qualitative impacts
Eligible CAF members, veterans and eligible survivors
  • New compensation and improved support;
  • Increased comfort and well-being; and
  • Better recognition of the impacts of service-related injuries.
Families, Canadians and Veterans Ombudsman/veterans stakeholder groups
  • Increased peace of mind; and
  • Satisfaction in knowing CAF members, veterans and eligible survivors have access to improved benefits and services.
Government of Canada (VAC)
  • Continuance of the Government’s commitment to support those who have served Canada.

Footnote 2 The table presents the results of benefits and costs over the 10-year period starting from July 1, 2015, through the end of the fiscal year 2024–25, using a discount rate of 7%. Figures may not add up due to rounding.
 

Benefits

Over the first 10 years of implementation, these regulatory changes are expected to benefit annually up to 635 RISB recipients and 471 FCRB recipients. Additionally, a total of 132 CAF members and veterans are expected to benefit from the CIB over the first 10 years. The methodology for determining these individuals, as well as how they will be positively impacted, follows.

Retirement income security benefit

The number of CAF veterans and survivors expected to benefit annually from the RISB was determined for three groups: veterans who are eligible for EL benefits (referred to below as “EL veterans”); SISIP–LTD veteran clients; and survivors.

Prior to determining the number of clients to benefit, the eligible population for EL veterans and SISIP–LTD veteran clients was determined as follows:

First, to estimate the number of EL veterans to benefit, March 2014 “totally and permanently incapacitated” client data was analyzed, as well as forecasts for new permanent impairment allowance clients based on April 1, 2015, regulatory changes. The population of clients in receipt of the permanent impairment allowance was looked at separately from the population of clients not in receipt of the permanent impairment allowance, to facilitate calculation of the estimated total cost of RISB set out in the “Costs” section below (eligible veterans in receipt of the permanent impairment allowance will receive a substantially lower monthly RISB payment, as the permanent impairment allowance continues to be payable after age 65).

This analysis determined that 75% of the eligible EL veteran population was in receipt of the permanent impairment allowance and 25% was not. Analysis conducted by the Office of the Chief Actuary of income levels for this group then allowed VAC to determine, for those in receipt of the permanent impairment allowance, that 39% would be eligible for at least some amount of a RISB payment, and for those clients not in receipt of the permanent impairment allowance, that 15% would be eligible for some amount of a RISB payment. Given the RISB is payable at age 65, an estimate of EL veteran clients turning 65 in each of the forecast years was determined based on the age distribution of March 2014 “totally and permanently incapacitated” clients. This percentage was then applied to the population of those eligible for the RISB to arrive at the number of EL veterans who would benefit each year. It is estimated that 50 EL veterans would benefit from the RISB in 2015–16, rising to 530 in 2024–25.

Second, to estimate the number of SISIP–LTD veteran clients who will benefit, VAC assumed that 100% of the eligible SISIP–LTD veteran population was not in receipt of the permanent impairment allowance, and income analysis conducted by the Office of the Chief Actuary determined that 63% would be eligible to the RISB. Since this client group is already over the age of 65, no age distribution was applied. It is estimated that 65 SISIP–LTD veterans would benefit from the RISB in 2015–16, falling to 48 in 2024–25.

Third, to estimate the number of survivors who will benefit, each survivor sub-group was determined.

It is estimated that five survivors in total would benefit from the RISB in 2015–16, rising to 57 in 2024–25.

Clients to benefit — Retirement income security benefit
Fiscal year 2015–16 2016–17 2017–18 2018–19 2019–20 2020–21 2021–22 2022–23 2023–24 2024–25
EL veterans 50 80 125 174 241 317 426 460 495 530
SISIP–LTD veteran clients 65 63 61 59 57 55 53 51 49 48
Survivors 5 8 14 19 24 31 38 44 51 57
Total clients to benefit 120 151 200 252 322 403 517 555 595 635

The monetized benefit to this group is assumed to be equal exactly to the program costs for VAC (see the “Costs” section below). Although the RISB will result in money being provided to CAF veterans and eligible survivors, which contributes to improving their overall well-being, this benefit has not been monetized. Instead, the program costs related to the regulatory amendments which create this new benefit have been used as a direct proxy, given the program costs will be the amount provided directly to CAF veterans and eligible survivors.

Critical injury benefit

The number of CAF members and veterans expected to benefit annually from the CIB was determined based on the results of a file review that VAC conducted of a random sample of CAF members who sustained a “serious injury” or “very serious injury” while in service between April 2002 and November 2012. This allowed VAC to determine that about 114 CAF members and veterans would likely experience a sudden, single and serious injury making them eligible for CIB in 2015–16. This number is mainly due to the accumulation of CAF members and veterans who would receive the benefit because of involvement in combat incidents which occurred as part of the Afghanistan war.

To forecast the number expected to benefit on a go-forward basis, VAC assumed that Canada will be in a non-combat role in future years. The review revealed that 14% of seriously and very seriously injured CAF members would meet the CIB criteria during a non-combat period. In addition, the average annual incidence of serious and very serious injuries during a non-combat period would be 12 per year. The non-combat eligibility rate for the CIB (14%) was multiplied by the average annual incidence of serious and very serious injuries (12) to determine that about two CAF members or veterans per year would become eligible for the CIB starting in 2016–17.

Clients to benefit — Critical injury benefit
Fiscal year 2015–16 2016–17 2017–18 2018–19 2019–20 2020–21 2021–22 2022–23 2023–24 2024–25
CAF members and veterans 114 2 2 2 2 2 2 2 2 2

The monetized benefit to this group is assumed to be equal exactly to the program costs for VAC (see the “Costs” section below). Providing additional funds to eligible CAF members and veterans through the creation of the CIB will contribute to improving their overall well-being. However, this benefit has not been monetized, as the program costs related to the regulatory amendments which create this new benefit have been used as a direct proxy, because the program costs will be the amount provided directly to eligible CAF members and veterans.

Family caregiver relief benefit

The number of veterans expected to benefit annually was determined by using a proxy population, which was deemed to have similar levels of incapacity leading to the requirement for caregiver support. This proxy population was the number of veterans in receipt of a disability award only (not in receipt of a disability pension under the Pension Act, as those eligible clients in need of attendance could receive the attendance allowance), with a disability assessment of 98% or greater as of March 2014. This group represented 0.6% of the disability award only population. This percentage was applied to the 2015–16 forecast of veterans in receipt of a disability award only, and then multiplied by a 99% take up rate, as it was assumed that most clients with this level of disability would not be living independently and would have some type of caregiver support. Because these calculations are applied to the cumulative population of forecasted veterans in receipt of a disability award only, FCRB intakes and exits are included in the figures. It is estimated that 245 CAF veterans would benefit from the FCRB in 2015–16, rising to 471 in 2024–25.

Clients to benefit — Family caregiver relief benefit
Fiscal year 2015–16 2016–17 2017–18 2018–19 2019–20 2020–21 2021–22 2022–23 2023–24 2024–25
CAF veterans 245 272 300 327 352 378 403 427 449 471

The monetized benefit to this group is assumed to be exactly equal to the program costs for VAC (see the “Costs” section below). Providing seriously disabled CAF veterans with funding to assist the informal caregiver with taking time off, while knowing that someone else would provide these vital services and support to the veteran in their absence, will contribute to improving their overall well-being. However, this benefit has not been monetized; instead, the program costs related to the regulatory amendments which create this new benefit were used as a direct proxy, given the program costs will result in direct spending on those who will benefit from these changes.

Costs

Government of Canada — All costs related to these regulatory changes will be borne by the Government of Canada. The net present value costs, both program and administration, to be paid by the Government of Canada are valued at $67.4 million, or an average of $9.6 million per year over 10 years from fiscal year 2015–16 to fiscal year 2024–25.

Retirement income security benefit

Program costs were determined by multiplying the number of annual clients (as described above in the “Benefits” section) in each specific eligible group by the estimated average RISB payment for such group for such year.

To determine the average RISB payment, VAC estimated the income from VAC financial benefits that a veteran received (or would have been eligible to receive) pre-age 65, and the income offsets that the veteran would have at age 65, for each of the following eligible groups: EL veterans in receipt of the permanent impairment allowance; EL veterans not in receipt of the permanent impairment allowance; SISIP–LTD veteran clients; and survivors.

The average RISB payment for a veteran, whether an EL veteran or a SISIP–LTD veteran, was determined by taking 70% of the average annual income for that eligible group (threshold for RISB payment), and then subtracting the offsets of the permanent impairment allowance and permanent impairment allowance supplement (if applicable to that group), Canada Pension Plan, CAF pension and Old Age Security.

A similar approach was used to determine the average annual RISB payment for survivors. The veteran’s 70% threshold was multiplied by 50%, to determine the survivor’s 50% threshold, minus the offsets of the Canada Pension Plan and the CAF pension paid to the survivor in respect of the veteran.

There are no new administration costs associated with the RISB as existing resources are available to establish and implement this new benefit.

Program and administrative costs — Retirement income security benefit
Fiscal year / Dollars in millions 2015–16 2016–17 2017–18 2018–19 2019–20 2020–21 2021–22 2022–23 2023–24 2024–25 Total Total PV (7%)
Program costs $1.3 $2.1 $2.8 $3.5 $4.5 $5.7 $7.4 $8.0 $8.7 $9.5 $53.5 $36.2
Administrative costs $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Total $1.3 $2.1 $2.8 $3.5 $4.5 $5.7 $7.4 $8.0 $8.7 $9.5 $53.5 $36.2

Note: Figures may not add due to rounding.
Critical injury benefit

Program costs were determined by multiplying the CIB amount ($70,000) by the annual number of clients expected to benefit (as described above in the “Benefits” section), and then by applying the annual inflationary factor assumed in the annual disability awards forecast, as provided by the Office of the Chief Actuary.

In addition, administration costs (rounded to the nearest $100,000) were based on the need for an additional 7.3 temporary full-time equivalent public service resources in 2015–16 only, in order to establish and implement this new benefit, which include program management and policy personnel, as well as IT software development and privacy contractors. Ongoing administration costs after 2015–16 will be covered by existing resources.

Program and administrative costs — Critical injury benefit
Fiscal year / Dollars in millions 2015–16 2016–17 2017–18 2018–19 2019–20 2020–21 2021–22 2022–23 2023–24 2024–25 Total Total PV (7%)
Program costs $8.0 $0.1 $0.1 $0.1 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $9.5 $9.0
Administrative costs $0.9 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.9 $0.9
Total $8.9 $0.1 $0.1 $0.1 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $10.4 $9.9

Note: Figures may not add up due to rounding.
Family caregiver relief benefit

Program costs were determined by multiplying the FCRB amount ($7,238) by the annual number of clients expected to benefit (as described above in the “Benefits” section), and then applying the annual inflationary factor assumed in the “Other Health Purchased Services Forecast,” as provided by the Office of the Chief Actuary in its annual report on veterans’ benefits as of March 31, 2014. There are no new administration costs as existing resources are available to establish and implement this new benefit.

Program and administrative costs — Family caregiver relief benefit
Fiscal year / Dollars in millions 2015–16 2016–17 2017–18 2018–19 2019–20 2020–21 2021–22 2022–23 2023–24 2024–25 Total Total PV (7%)
Program costs $1.3 $2.0 $2.3 $2.6 $2.9 $3.2 $3.5 $3.8 $4.1 $4.4 $30.1 $21.3
Administrative costs $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Total $1.3 $2.0 $2.3 $2.6 $2.9 $3.2 $3.5 $3.8 $4.1 $4.4 $30.1 $21.3

Note: Figures may not add up due to rounding.
Non-quantified benefits

These regulatory amendments will positively impact a number of stakeholder groups.

CAF Members, veterans and survivors — These individuals will be positively impacted as follows.

Retirement income security benefit

CAF veterans and survivors will benefit by having greater financial security and peace of mind knowing that they receive this monthly benefit into their retirement years; and increased satisfaction because the Government of Canada recognizes that some veterans with a service-related disability have had a reduced capacity to sufficiently plan for a post-age 65 income.

Critical injury benefit

CAF members and veterans will benefit by having access to compensation for the non-economic effects of a severe and traumatic service-related injury/disease; and increased peace of mind knowing that the Government of Canada recognizes, in a tangible way, the impacts that a sudden and traumatic service-related injury has on their lives and their families.

Family caregiver relief benefit

CAF veterans will benefit by having greater flexibility in providing relief to their caregivers, who are often spouses, common-law partners, adult children, parents or other family members; additional funds to obtain needed care, if required, while their caregiver recharges and takes a break from their caregiving duties; and increased fulfilment knowing that the contribution of their caregiver, which may be a family member, and the personal demand on them as a result of their caregiving efforts, is recognized.

Members’/veterans’ families — Some family members will benefit from having a sense of security by knowing that their family member, who is a CAF member or veteran, will receive lifelong financial support continuing after the age of 65, thereby removing possible barriers to a continued successful transition from military to civilian life; be financially recognized by the Government of Canada for the pain and suffering that their loved one endured during their recovery period from a service-related injury/disease that occurred while serving in the CAF; and be able to access alternative care while their caregiver (who is often family member) is able to take a well-deserved break.

Canadians — The Canadian public have expressed their support of the Government of Canada’s provision of benefits and services to veterans in assisting with their transition to civilian life, and supporting those who are ill or injured as a result of their military service. Canadians will be satisfied to know that disabled veterans and eligible survivors will receive continued financial assistance in the form of a monthly income support payment that would begin at age 65; CAF members and veterans will be recognized and compensated for the immediate stress and hardship they experienced after a traumatic incident suffered while courageously serving Canada; and the contributions of a disabled veteran’s caregiver toward their personal health and well-being are being acknowledged.

Veterans Ombudsman and Veterans stakeholder groups — Similar to the Canadian public, the Veterans Ombudsman and veterans stakeholders groups will benefit from the knowledge that VAC is making improvements to, and addressing gaps in, benefits and services offered under the NVC. These organizations have long been lobbying the Government to take action to address their concerns with the lack of certain benefits provided under the NVC.

Government of Canada — These regulatory amendments will allow the Government of Canada to fulfill certain commitments made in the Government response to the third report of the Standing Committee on Veterans Affairs, The New Veterans Charter: Moving Forward. The improvements also align with commitments made in Budget 2015 which stated “the Government of Canada is dedicated to ensuring that veterans and their families receive the support they need. These changes reaffirm the Government’s ongoing commitment to veterans and will help ensure that the New Veterans Charter continues to meet the increasingly complex and diverse needs of Canada’s veterans and their families.”

“One-for-One” Rule

The “One-for-One” Rule does not apply to these amendments, as there is no administrative cost to business.

Small business lens

These amendments do not increase or decrease administrative burden on or compliance costs to small businesses.

Consultation

These regulatory amendments were developed in response to some of the recommendations that have been made by veterans stakeholder groups, such as the Veterans Ombudsman and the Standing Committee on Veterans Affairs. As part of its outreach with veterans stakeholder groups, on May 29, 2015, the proposed factors then being considered for the CIB were shared, and feedback received was generally positive. VAC has further committed to providing additional information and to answering questions on these regulatory changes at regular meetings with stakeholder groups.

Rationale

VAC exists, in part, to assist those whose courageous efforts gave us our legacy and contributed to our growth as a nation. VAC achieves this mandate by providing benefits and services, through the NVC and other legislation, that respond to the needs of CAF members, veterans and their families. VAC is committed to making ongoing enhancements to these benefits to better meet the needs of veterans and their families.

Additionally, although the cost-benefit statement demonstrates that, from a financial perspective, the costs to the Government of Canada slightly exceed the monetized benefits provided to eligible CAF members, veterans and survivors, the non-quantified benefits indicate that the benefits outweigh the financial costs.

Lastly, these amendments also respond to concerns identified by some veterans stakeholder groups, and will help confirm to the Canadian public that the Government continues to stand by those who have defended, and continue to defend, Canada with pride.

Implementation, enforcement and service standards

The regulatory amendments related to the RISB and the FCRB were deemed to have come into force on July 1, 2015, and the remaining regulatory amendments came into force on the day on which the Regulations were registered. As of these dates, VAC has been able to consider applications for the RISB, the CIB and the FCRB. To facilitate a smooth implementation for both VAC staff and eligible recipients, VAC has created internal working groups to oversee all aspects of the implementation process for the three new benefits.

VAC will be using the existing service delivery framework in place for other NVC programs to provide RISB, CIB and FCRB payments to eligible CAF members, veterans and survivors. However, some systems re-design work is required to incorporate these new benefits into VAC systems. Terms and conditions, policies, business processes, guidelines, application forms and letters have also been created to support the three new benefits. As well, during the first year of implementation of the CIB, additional human resources will assist in expediting claims for individuals who were critically injured between April 1, 2006, and July 1, 2015, and initializing applications. In future years, CIB payments would be processed within existing resources. The RISB and the FCRB are being managed and delivered within existing resources.

Ongoing communication with VAC staff will be an integral component to the successful implementation of these new benefits. Messaging and training plans have been delivered to VAC staff prior to the new benefits being implemented so they are well informed and can effectively assess applications, respond to questions, and provide information and advice. To better serve those veterans most in need, VAC will guide veterans through the enrollment process for these new benefits, in an effort to eliminate unnecessary administrative burden for the most seriously disabled veterans.

As with other benefits and services offered under the NVC, VAC has established service standards for the three new benefits. With a target of 80%, they are

Performance measurement and evaluation

Reviews will be conducted in accordance with the performance measurement strategies developed to guide the selection, development, and ongoing use of performance measures. The purpose of these strategies is to assist VAC to

As the RISB falls under the umbrella of financial benefits provided under the NVC, the performance measurement strategy for financial benefits has been updated to include the RISB. The CIB has been incorporated into the disability benefits performance measurement strategy. Also, a performance measurement strategy has been created to support the FCRB. These performance measurement strategies will be used in the ongoing monitoring and evaluation of the three new benefits.

VAC’s Audit and Evaluation Division also conducts audits and evaluations of all VAC benefits and services, which will include the RISB, the CIB and the FCRB. Results are published regularly on VAC’s external Web site.

Contact

Katherine Morrow
Manager
Cabinet Business Unit
Policy Division
Veterans Affairs Canada
P.O. Box 7700
Charlottetown, Prince Edward Island
C1A 8M9
Telephone: 902-566-8960
Email: Katherine.Morrow@vac-acc.gc.ca