Veterans Affairs Committee on May 6th, 2010

[Judy Sgro, Liberal, York West, ON]

How many lump-sum awards are there in an average year?

[Anne-Marie Pellerin, Director, Disability Programs and Income Support, Department of Veterans Affairs]

The total number of disability awards granted since 2006--and this is to unique clients--would be in the range of 16,700. The number is in the deck that was provided, but it's about 16,000.

[Judy Sgro, Liberal, York West, ON]

It's approximately 16,000.

Have you done some follow-up to see how those individuals have managed with that lump-sum payment and where they are today?

[Ken Miller]

There's presently a survey being undertaken. Our minister in fact referred to it, but I don't recall if it was at this committee or before the Senate. It is not complete at this point. We have some early indicators, but that will be ongoing over the course of the summer. I believe our minster indicated that results would be available at some point through the summer or into the fall.

[Judy Sgro, Liberal, York West, ON]

With reference to the reduction in the amount at a 75% level, how was the 75% determined?

[Ken Miller]

A variety of factors were considered during the design. First, it's important to recognize that there is a principle established in disability management that the amount of support provided by EL--this is the earnings lost program that you're referring to--will be somewhat less than the amount an individual was earning when he or she was actually earning. I know you understand there are principles related to that.

We looked at other programs. There are other points of comparability, such as workers' compensation and so on. Around 70% is a fairly common amount, but we went to 75%. One of the reasons was that it echoes the amount that was already built into the pre-existing program that SISIP offers. A factor we had to consider was that with the new Veterans Charter, we could well have veterans with similar types of disability and similar levels of disability variously entering the SISIP program or the VAC program, so from a Government of Canada perspective it was important to have some consistency to have equity around that. Those are some of the main factors that were considered.

[Judy Sgro, Liberal, York West, ON]

Was there any consideration given to the fact that ten years into the career of that individual, had he not been injured, he would have had natural increases in his salary level and his compensation levels?

[Ken Miller]

Yes, there very much was.

As I'm sure you can appreciate, it is difficult to see into the future and anticipate where somebody may arrive in a career, but it's a real factor. We recognize that to have somebody halted at the point where they were doesn't compensate them fairly into the future. That was one of the key reasons for the creation of the permanent impairment allowance.

The feeling was that we should focus it on those who are most seriously disabled, and the criteria related to it are focused around the more significant injuries. The specific policy objective of the permanent impairment allowance program is to recognize the impact that it can have on career progression and advancement. Now, one could argue whether it fully compensates and fully recognizes, but it does in some measure, and that was certainly the intention.

[Judy Sgro, Liberal, York West, ON]

With reference to financial benefits to children and spouses under the new charter, what are the financial benefits to spouses and children to compensate for unpaid care?

[Ken Miller]

There have been many comparisons made between the approach under the new Veterans Charter and what existed under the Pension Act. As you know, under the Pension Act there were additional amounts paid for dependants, spouses, and children.

When the new Veterans Charter was designed, the approach was to relate income replacement to the amount of income an individual was earning at the time of release from the forces. That's an amount with which they were supporting their families and an amount to which they had become accustomed.

It was based on 75% for all. It applies 75% for all. In that way, no matter what amount they had before, everyone has a similar percentage. If you think about it that way, you could argue that the benefits are built into that percentage, but you're quite right: there were no specific amounts, either in relation to EL or in relation to the disability award, that specifically recognized dependants in that.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Miller, and thank you, Madam Sgro.

Go ahead, Monsieur Vincent, for seven minutes.

[Robert Vincent, Bloc, Shefford, QC]

Thank you, Mr. Chair. We will try to ask short questions in the hope of getting short answers.

I would like to know to what extent you can make changes to the Veterans Charter under your mandate.

[Ken Miller]

Of course the authority for the charter is set both in statute and in regulation. We have a certain latitude within the scope of the policy to adjust how we operate the program, but the fundamentals--the benefits and how they operate--are established in law, so that's very much a question for ministers to consider. The basis of it would be a matter to be considered in the House. Regulations are considered by the cabinet, of course, so....

[Robert Vincent, Bloc, Shefford, QC]

So, we are talking about the negative effects of this new charter. Just now, you said that your base rate was to give veterans 75% of their salary. You know that, in Quebec, a workplace accident victim gets 90% of his net salary. I do not know what workplace accident victims get in other provinces, nor what you are basing your rate of 75% on. Is it the net salary or the before-tax salary? Really, the 75% that you are giving to veterans, which is taxable as well, leaves very little in their pockets. They might be left with 45% of their salary. I do not see anyone surviving decently on 45% of their salary after an accident that has disabled them for the rest of their lives.

If I understand the system correctly, if a person is disabled for the rest of his life, he gets a lump sum of $274,000 or $276,000—I do not recall the exact amount—plus a gross income that corresponds to 75% of the amount he used to earn. For a 20-year-old with 45 years to go before getting a pension, $276,000 is not a lot on an annual basis. And if that person receives 75% of what he used to earn, how is going to live, to pay for his house, his groceries, his car and everything else? If we listen to you, these people are living like kings, but that it not what is happening in reality. I would like to know what you think.

[Ken Miller]

Thank you for the question.

The 75% that I referred to is set in statute, so that is law. One could talk about whether the amount is right or not, but that is the amount we have authority to operate on. It is based on the gross pre-release salary of the individual and it's indexed forward in time. It is taxable, as you point out; that's not defined by Veterans Affairs but by colleagues in another department, who determine what constitutes income and is therefore subject to tax.

I should point out, though, that in addition to the $276,000 there is the permanent impairment allowance. The $276,000 is not intended to replace income; it is intended to provide recognition to the individual who's been injured, to provide some level of compensation for the pain and suffering they have sustained, and to provide them some opportunity.

There is that, and there is the 75% of the earnings loss, but in addition, as in the example that you cited, if somebody is seriously, permanently disabled for life, then in most cases that person would also be eligible for the permanent impairment allowance. That's an allowance that pays at three different grade levels, from a little over $500 a month to a little over $1,600 per month. That's a monthly amount, and it pays for life. If you add that to the amounts that you've already cited, that is a fairly strong level of financial support for the individual.

I should point out, though, something equally important. It may not be something that you add up in terms of dollar value, but the support available through rehabilitation and the various health interventions, as well as other supports that are made available to the family, are also worthy of note.

[Robert Vincent, Bloc, Shefford, QC]

I understand that perfectly well; you are including a lot of things. But you are talking about an extreme case. In other cases, people will have a really hard time financially. Take the example of a person who has a 15% disability and who goes through a rehabilitation program, after which he is not successful in finding a job. All that person will get is 75% of his salary. In that case, he does not even get a disability award. If he cannot find a new job, he will continue to receive just 75% of his salary.

From the experience you have gained after years of working with this Veterans Charter, do you not think that it would have been preferable to help people like that by topping up the 75% of gross salary a little, say? In that way, we could compensate them for taking a job at minimum wage.

Let me give you a specific example to make it clearer. Take the case of an army corporal who made $15 per hour and now drops to 75% of his gross salary, not his net salary. If he found a minimum wage job, you could offer to make up the difference to $15 per hour so that he would not lose anything. We would only be making up a small part of his salary. That gives the veteran an incentive to get back into the job market, much more than knowing that he will always get 75% of his gross salary, never more, never less, whether he goes back to work or not.

Ms. Pellerin, you work in rehabilitation; you should be in a position to answer the question.

[Anne-Marie Pellerin]

My colleague Brenda MacCormack will be here next week. She's the director of the rehabilitation program.

But a client with a lower-level salary in the military and perhaps not a serious disability would get a lump-sum payment and go into the rehabilitation program, where there would be a concerted effort to focus on the vocational potential of that individual. They would work with that individual to find suitable employment in the civilian sector that would result in a wage comparable to what the individual earned previously.

[The Chair, Conservative, David Sweet]

Do you have anything to add, Mr. Miller?

[Ken Miller]

I think it's very important, in responding to Monsieur Vincent's comments, to point out that the whole design of the new veterans charter is needs-based. The objective is not simply to provide money to individuals in the absence of need; it is to provide the support they need when the need exists.

To use your example, Monsieur Vincent, most individuals with a lower level of disability, such as 15%--not that you can say everybody with a 15% disability is going to reintegrate--will be able to retrain, reintegrate, and become independent and capable of supporting themselves. That's the goal. It's not to create dependency in individuals so that for the rest of their lives they are dependent on payments from the government. Not everybody can do that, but for those who can that's ideally the goal. It's to provide the right level of support when they need it to get them to that point. It's important to recognize that and not think simply about how much money transfers to them over a lifetime.

One of the significant problems with the old pension act and the disability pension payment was the amount of money that was provided in relation to the time when it was needed. Paradoxically, it didn't provide enough when they were younger, raising families, and really needed it. In many cases they will get more later in life, but that's not when they actually need it. So I just want to make that important point about the needs-based provision.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Miller.

Before we go on to Mr. Stoffer, you made a comment that 75% is indexed. Is it indexed to the CPI?

[Ken Miller]

It's based on the CPI and capped at 2%.

[The Chair, Conservative, David Sweet]

Thank you.

Mr. Stoffer has five minutes.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you, Mr. Chair.

Thanks again, folks, for appearing before the committee.

Mr. Miller, I say the following with great respect. When we talked about the lump sum at the concluding remarks to my colleague Judy, you indicated “to the extent that there may be a problem”. I'm here to tell you that there is a problem. There's no maybe about it. It is quite serious. We've had some very serious people from very serious organizations tell us that the lump sum is a problem. There's no “may” to it.

I believe that the new Veterans Charter is an improvement--there is no question--but it is a living document, and we need improvements to it.

Victor Marshall of the Gerontological Advisory Council made 16 recommendations to DVA well over a year ago. I'm wondering how many of those 16 recommendations have actually been acted upon.

[Ken Miller]

Thank you, Mr. Stoffer.

The department is able to act on recommendations that are made and that can be achieved within existing authorities. To the extent that we can do that, we certainly try to. We try to make those improvements.

It's important to appreciate that many of the recommendations from Mr. Marshall's report and from others, such as the recent report on the new Veterans Charter, are recommendations that involve changes to authorities. Those are matters for ministers and for government to consider. They're important recommendations, I agree, but they're certainly not recommendations that the department can act on unilaterally.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

You had also indicated, sir, that when it comes to post-traumatic stress disorder, sometimes years later a person can be diagnosed with that.

One of the problems I find my office is dealing with is that many veterans, for example World War II veterans, Korean veterans, Bosnian veterans, or Gulf War veterans, many years later are now feeling the effects of what happened to them. They go to try to make a claim to the DVA, through the various boards, and they're being turned down repeatedly because nothing on their medical file from during their time of service indicated there was a problem.

One of the most difficult things to prove is whether or not they actually have PTSD, even though they've been clinically diagnosed with it and the doctor will say that there's a high probability that the person's concerns are possibly related to their military service.

I have yet to hear of a case where a person has been, many years later, diagnosed with PTSD from a service-related thing and has actually gotten a benefit. Is there any evidence of that? Of all the cases I've dealt with, every single one so far has been denied.