The reason we selected the totally and permanently incapacitated category to determine the cohort of veterans who are potentially at risk financially is that these are the ones who are assessed by Veterans Affairs Canada as being unable to generate wealth during their working years because they cannot engage in suitable gainful employment.
Here is another way to visualize the demographic data I have just given you. Each person on this slide represents 4,000 veterans. The clients of Veterans Affairs Canada are in blue. Thirteen per cent of the total number of Canadian Forces' veterans is in blue, and the number of veterans who are totally and permanently incapacitated is in red. As you can see, a very small number of veterans are totally and permanently incapacitated.
When we were looking at ways to fill the gaps in financial support, we used five scenarios in order to see what the impact would be. These scenarios represent veterans who are totally and permanently incapacitated at varying degrees of disability, various ages, rank, etc. I should point out that these scenarios represent real veterans. Real veterans were used in each of these scenarios.
Veterans often compare whether they would be better off under the Pension Act or under the new Veterans Charter, but to have a useful conversation about the adequacy of financial benefits, we believe you need to separate the benefits into two parts: the economic benefits and the non-economic benefits, which we refer to as compensation for pain and suffering.
This slide shows this breakdown. The three bar graphs on the left show the total monetary value of the benefits provided over the life of the corporal in scenario one. This was a 24-year-old who was 80% disabled. This should be provided over the life of the corporal under the Pension Act—the left bar—with the Manuge court decision and the new Veterans Charter. I would just remind you that the court decision removed the disability pension as an offset in calculating the income support, which explains why the blue line in the second bar is higher than the one on the left.
On this slide you can clearly see the effect of the court decision.
The three bar graphs on the right show the value of the compensation for pain and suffering: the disability pension is in yellow, and the disability award is in blue. You can see that the value of the pension is higher than the value of the lump sum.
Finally, the centre graphs show the value of the economic support benefits. You can see that the value of the new Veterans Charter economic support benefits is greater than that of the Pension Act benefits when the allowances, the permanent impairment allowance and the permanent impairment supplement, are provided. A discussion on how well the Pension Act and the new Veterans Charter compensate a veteran really depends on what you are actually comparing.
These graphs show the effects of the economic support benefits over time for scenarios one and five. The veteran in scenario five is a veteran without the allowances. The graphs clearly show how the economic support benefits drop off at the age of 65. When you compare the graphs, the graph on the left shows the effects of providing the allowances. The Pension Act benefits drop off because we are considering only the economic support benefits, and the pension is compensation for pain and suffering.
I would like now to quickly cover the three program areas at issue for veterans and their families.
First is financial supports. There are five shortcomings with regard to financial support, which were mentioned by Monsieur Parent. First of all, there is insufficient economic financial support after age 65 for totally and permanently incapacitated veterans who are at risk financially. Second, there's a reduction in salary after the veteran is medically released, which complicates an already challenging transition from military to civilian life. There's the unfair calculation of income support for part-time reservists. The earnings loss benefit for part-time reservists is based on a fixed amount rather than on the salary at that rank level. Over 50% of totally and permanently incapacitated veterans are not receiving the permanent impairment allowance and the supplements. Even though the enhanced new Veterans Charter improved the eligibility for these benefits, access remains a problem for some of the most seriously disabled veterans. Finally, the disability award has not kept pace with original benchmarks and specifically the maximum Canadian court awards for pain and suffering.
The following are some of the options we believe Veterans Affairs Canada should consider to address the shortcomings.
First, improve financial support after age 65 for totally and permanently incapacitated veterans, to ensure that the sum of their financial support from various government sources is at 70% of their pre-release salary. The reason we chose 70% is that it is a commonly recognized benchmark to maintain the same standard of living during retirement as you had during your working years.
Second, increase the earnings loss benefit from 75% to 90% of pre-release salary. By doing that, it equates to 100% of net salary, because while you're receiving the earnings loss benefit, you are not paying into CPP, EI, and superannuation.
Third, improve access to the permanent impairment allowance and the supplements.
Finally, increase the maximum non-economic compensation for pain and suffering to $350,000, and then conduct a comprehensive review to determine what the appropriate maximum compensation that should be provided is.
The second program area is vocational rehabilitation and assistance.
First, the program criteria of building on existing experience, skills, and training is too rigid and constrains education upgrade and employment options. While the department has recently improved the flexibility to access funding for vocational rehab and reduced red tape in this area, the program needs to be more flexible in allowing veterans to embark on new career paths that interest them, rather than shepherding them into career paths based on their past experience, skills, and training.
Second, the performance measurement to track whether veterans find employment and stay employed is inadequate. Veterans Affairs Canada needs to do better at measuring program outcomes, not just program outputs and cost, and they need to know whether, after completing the program, veterans find a job and actually stay employed.
Third, there are two programs, one from DND, the SISIP, service income security insurance plan, and one from Veterans Affairs Canada, that provide similar income support and vocational rehabilitation. This can create confusion for transitioning veterans, and it's unclear how beneficial and cost-effective this is. We believe we need to conduct an independent review of this dual program construct, to determine whether it is the best way to deliver vocational rehab and income support to veterans.
Finally, there are issues with support to families, notwithstanding that the new Veterans Charter provides more programs to families than ever before, and most advisory committees have stated that more needs to be done to support families.
Here are the main shortcomings, and most of these would require very little funding to address.
First of all, we need to provide more counselling to families, better outreach and communication, and follow-up to make sure their needs are actually being met.
We need to provide more support to help families transition to community care, and for those who can't find a family doctor, to help them with that.
The reduction of family support after the transfer from military life to Veterans Affairs Canada also needs to be improved, so we can better harmonize the support provided through the Canadian Armed Forces and Veterans Affairs Canada.
We need to compensate family members who provide primary care to their seriously disabled veterans. A number of spouses put their careers on hold or stop working completely to care for a disabled veteran. We believe they need to be compensated for the support and the sacrifices they make.
There's no access to a pension or dental service plan for a certain small group of veterans. We believe that needs to be addressed. Veterans Affairs Canada can provide a public service health care plan to veterans, and they need to make that extra step and provide the dental care for the small group of veterans who do not have it.
Finally, after the death of a veteran, there's an overly restrictive time limit of one year for a surviving spouse to apply for vocational rehabilitation and assistance support. In some cases, the spouse has small children at home and is not prepared to go back to work immediately. By having a one-year artificial limit, it basically prevents them from accessing vocational rehabilitation after that one year expires.
To conclude, there are some very positive effects that can be achieved if the new Veterans Charter shortcomings I've mentioned are addressed.
Veterans will have sufficient economic financial support during the rehabilitation period for those who can return to work, and for life for those who can no longer work. All veterans will be treated fairly and consistently for service-related injury and illness. Veterans will require the skills, training, and education they need to embark on new careers that interest them, which may, in the long term, reduce long-term dependence on Veterans Affairs Canada and other government benefits and services.
Families will be properly supported and will be able to help veterans adjust to their medical condition. They will be able to support their transition to civilian life.
Finally, veterans will achieve economic independence. They will experience improved health, wellbeing and quality of life.
Thank you, Mr. Chairman.
We stand ready for questions.