Pension settling soon

[Lardofthedance]

  Looking for help with some VAC questions. I've been on their web site and I'm having trouble obtaining some info. I'm being awarded a monthly pension under the old system. The question I have is can that amount be paid out in part or full, paid over a fixed term or paid at the specifeied rate until death? I've been looking but I can't find a decent reference. Thanks in advance.

 

[Jimmy_D]

Where you say you are on the old pension system. This would be the table to look at:

www.legion.ca/_PDF/SBureau/Rates2012_DisabilityPension.pdf

 

[Lardofthedance]

Thanks, but I know what the percentages and monthly payments are. What I'm not completely sure of is if that pension can be settled as a lump or partial sum or if it fixed as monthly payments only.

 

[Jimmy_D]

As old system, if they are going to pay you via the old system, then it should be a monthly settlement. If it is done via new system it would be your choice of lump sum, partial lump sum and annually, or annually.

Other than that your best bet would be to call VAC and ask them.

 

[Occam]

Thanks, but I know what the percentages and monthly payments are. What I'm not completely sure of is if that pension can be settled as a lump or partial sum or if it fixed as monthly payments only.

Monthly payments only.

 

[maniac]

Monthly under old charter.  That is what everyone wants to go back to.  You will receive more overtime than new charter without question.

 

[Wookilar]

With the amendments done to the NVC we now have a few options for the awards:

1) Lump Sum;
2) Partial Lump Sum and monthly amount (ability to cash out at any time); and
3) Monthly amount (ability to cash out at any time).

 

[Occam]

With the amendments done to the NVC we now have a few options for the awards:

1) Lump Sum;
2) Partial Lump Sum and monthly amount (ability to cash out at any time); and
3) Monthly amount (ability to cash out at any time).

It's important to note that regardless of the payment choices above, you end up with the same amount of cash in the end.  It's just the same sum divided up differently.

 

[Wookilar]

And it's not considered income, so honestly I don't know why anyone would take the monthly payout. You could put the award into investments (which VAC pays up to $500 for the financial planning professional) and gain much more over time than you ever would getting it monthly for the next 7 years or whatever.

 

[Occam]

Well, I think the reason the additional options were created was because there were situations where folks were coming back from deployments suffering from OSIs and not necessarily making sound financial judgments when they were suddenly awarded large sums of money.  Taking a payment option gave them a "brake" on the money, much like leaving your credit card at home if you know you have trouble with impulse buying.

 

[Wookilar]

Seen, never thought of it that way.

 

[blackberet17]

And it's not considered income, so honestly I don't know why anyone would take the monthly payout. You could put the award into investments (which VAC pays up to $500 for the financial planning professional) and gain much more over time than you ever would getting it monthly for the next 7 years or whatever.

Wookilar, here's one way of looking at it...and why so many folks are against the NVC and the lump-sum award. Say you're a younger CF member, 25 average age let's go with, and you get injured in Afghanistan. Let's also say your injuries amount to a 50% total assessment.

Pick one:

a) 50% under the NVC - whichever way you want to slice it up with those options, works out to $146 654.21 (2012 rate of 100% at $293 308.42). Lump sum, spread over X, doesn't matter. It's still just under $146k. This is Charlie's scenario.

b) 50% under the Pension Act, works out to 1273.74 (single person, no wife, no kids) per month. This is Bob's scenario.

Now, a) looks pretty good, right? Charlie's got enough to start a life, buy a truck, a house, etc. He doesn't really think of investing or putting away for a rainy day.

But do some math, and it's a different story. Let's say Charlie and Bob live to 81, the latest stats show. That's 56 years. Let's round it to 55, since that $146k may well be spent in that first year.

Charlie's got a truck, a house (or a downpayment towards one, depending on the truck, community he's looking to live in, etc.). But he didn't put anything in investments or plan ahead. And he's still got 55 years to live.

Bob gets 1273.74 a month. $15 284.88 a year. Sure, he may have to make payments on the truck to get it, but it'll be paid off in six years. Anyway. Now, the rate also goes up every year, too, but I'm keeping the math simple. There are also increases for when he gets married, has kids...

55 years at $15 284.88 = $840 668.40. For a difference between Charlie and Bob of -$694 014.19.

For an older veteran, who may only have a life expectancy of another 10 to 15 years, okay, maybe the lump sum makes sense, he's already got his pension, house is paid for, etc. He can use the lump sum to travel, make a renovation, help his kids out, whatever.

But for Charlie, it isn't so great.

And as Occam points out, that lump sump, when suffering from an OSI, can quickly disappear.

There are advantages and disadvantages to both systems, and neither one is perfect. Even a melding of the two at this time would not create a perfect system.

Monthly rates
Lump sum rates

 

[Infanteer]

As this was linked to, I'll resurrect with a question for blackberet17.

Good comparison, but how does the money work when you lump the other benefits under the NVC in?  From my understanding, the old system was a pension and that's about it.  The NVA has the payout you've referred to plus a bunch of other benefits.  Is an NVC trooper as disadvantaged when those are added in?

 

[Teager]

The other benefits all have criteria which the majority of injured/ill soldiers do not meet. I can't remember but there was an article with the stats showing the number of vets that were accessing the different benefits. I'm going off of memory but I think some benefits only had 3 or 4 vets using that particular benefit. As mentioned in the other thread VAC has now stopped there 24 months of school. For example a soldier who is suffering PTSD and is unable to use the SISIP schooling due to the deadline because they are still rehabilitating will not get any schooling paid for.

I think the majority of vets recieve the VIP program, lump sum, and whatever bit of medical care they get for the injury. Other than that I don't see much use of the other benefits due to the criteria being so strict.

Mods maybe some of these threads should be merged?

 

[Occam]

Just to give some context, I have a 15% disability under the Pension Act for hearing loss and tinnitus.  Under the Pension Act, I receive $536.82/month (wife and one child), VAC pays for my hearing aid and any consequential treatment.  Had I applied one day later than I did and been covered under the NVC, I would have received $44,788 as a lump sum, and they also would have paid for my hearing aid and any consequential treatment.

I'm 47 now, and I passed the "break even" point back five months ago in April where the sum of my monthly Pension Act payments would have equalled the NVC Disability Award.  I think the member who applied the day after I did is getting seriously ripped off, because we both have the same disability at the end of the day.

 

[blackberet17]

As this was linked to, I'll resurrect with a question for blackberet17.

Good comparison, but how does the money work when you lump the other benefits under the NVC in?  From my understanding, the old system was a pension and that's about it.  The NVA has the payout you've referred to plus a bunch of other benefits.  Is an NVC trooper as disadvantaged when those are added in?

The Pension Act (PA) had a number of advantages the NVC does not.

First of all, the effective date. Say you applied two years agoand finally, the Minister renders a decision. Under the PA, the effective date of your pension can go back to the date you first applied two years ago, meaning you may receive a few thousand dollars in retro pay. Under the NVC, the Minister's decision is effective the date of the decision, no retro. It doesn't matter if it's an assessment or an entitlement, under the NVC, all decisions are efffective the date of the decision.

Under the PA, there are: VIP, Attendance Allowance, Clothing Allowance, Exceptional Incapacity Allowance.

Under the NVC, there are: Clothing Allowance, Education Assistance Program.

Since its inception, and specially in the last two-three years, the Government has been throwing additional funds and programs at the NVC to try to make up for the general disatisfaction many have towards the NVC. It would take me a while to draw up a table comparing the PA and NVC, with their sub-programs and additional benefits, and to have a comprehensive table of what is currently provided by the NVC.

The interesting part in all of this to me is...go back to 1916-17, when the Borden government was trying to come up with a program for returning soldiers, and look at the one brought in by MacKenzie King. Back, there were re-training and education programs. How many of our Veteran parents from the SWW went to university thanks to the programs available? I read somewhere that at one point, university classrooms had as many returned soldiers as they did regular students. How many took advantage of the (I think it was called) Land Act, which gave (apparently crappy, but...) land for farming and start up funds to returning soldiers?

They were still imperfect programs and systems. The rise of the RCL back in the between war years is thanks in part to disgruntled veterans and their beefs with the government of the day and the compensation given to injured soldiers.

Anyway, I digress.

What I can say is this: the majority of the unhappiness towards the NVC is due to the lump sum. It is a big disadvantage towards younger soldiers, who have many more years of life expectancy and future hardship to go through, compounded by a loss of future earnings capacity and gravely disabling injuries, mental and physical.

It is extremely difficult - and would be insulting really - to compare a "simple" injury such as hearing loss (I've got it too, so) to more traumatic injuries such as PTSD or loss of limb and the funds awarded for those different injuries to one another. Yet, IMO, to "award" a 25 yo soldier who has lost both his legs to a mine in Afghanistan a $145 000 lump sum (yes, with all the other benefits as well, treatment, clothing, etc), which will be eaten up in having to make his home wheelchaire-accessible in the first place, as opposed to a lifetime monthly pension IVO $1200/mo, it makes me think...

 

[dapaterson]

It is extremely difficult - and would be insulting really - to compare a "simple" injury such as hearing loss (I've got it too, so) to more traumatic injuries such as PTSD or loss of limb and the funds awarded for those different injuries to one another. Yet, IMO, to "award" a 25 yo soldier who has lost both his legs to a mine in Afghanistan a $145 000 lump sum (yes, with all the other benefits as well, treatment, clothing, etc), which will be eaten up in having to make his home wheelchaire-accessible in the first place, as opposed to a lifetime monthly pension IVO $1200/mo, it makes me think...

Bad example.  The CBIs provide for payment for home modificaiton for a member - CBI 211.01 provides the details.

 

[Teager]

Bad example.  The CBIs provide for payment for home modificaiton for a member - CBI 211.01 provides the details.

This is a bad example. I'm sorry but just because a piece of paper says it provides does not mean it does. I have known guys who have been waiting years and years for approval and sometimes have been denied. We are talking about VAC here not benefits covered by the military. If you are released those benefits are irrelevant.

Should a guy in a wheel chair have to wait multiple years to have his house modified? No, thus the member goes ahead and does it themselves with the lump sum and are not reimbursed.

 

[prairefire]

I have a pension under the act for a back injury at 20%. I have a disability award under the NVA for hearing loss. One of the benefits under the Pension Act which does not apply to those under the NVA is Treatment Allowance. Since 1991 I have twice had to go in for extensive rehab and treatment so that I was able to walk without assistance and be able to gain useful employment. The first instance was for 3 months and I received at the end of each month the equivalent of a 100% disability pension less the 20% I was already receiving. Effectively I was 100% temporarily pensioned while in treatment. The second time was several years later and was for 2 months.

The link here explains in detail: http://www.veterans.gc.ca/eng/department/policy/document/1224

VAC clients who have a NVC disability award are not eligible for this program.

This is one example of the benefits lost under the NVC. This is a short duration but easily accesible program that for me was of great benefit. Trying to go into full time treatment and rehab for a couple of months so that I could strengthen my core and gain or keep full time employment is critical to ones quality of life.