Soldiers squander disability payouts

[Rifleman62]

While a department survey showed the majority of disabled veterans like the lump-sum system and used or invested the money wisely and efficiently, it is among the most frequently criticized aspects of the New Veterans Charter ....

I would love to see all the details, including the demographs, of every self preservation survey done by VAC.

 

[Pusser]

I wouldn't be too quick to call this self-preservation at all.  When you think about it, it is far more beneficial to VAC's future to maintain monthly payments and the whole infrastructure required to support them, than it is to make lump sum payments.  It requires a lot fewer people and systems to deal with a file only once than to have to deal with it monthly for the rest of someone's life.  Reducing VAC's workload (which a lump sum payment system does) only makes it easier to eliminate them as redundant.  This is not self-preservation at all.

 

[Rifleman62]

It requires a lot fewer people and systems to deal with a file only once than to have to deal with it monthly for the rest of someone's life.

Sorry, disagree with the above. The monthly is spit out by computer and is not reviewed again unless the recipient appeals a deterioration of the disability. I do believe VAC can review the entitlement, as so warned (threatened) when appealing.

I posted here years ago. Almost all of the WWI Vets were gone (now gone), WWII Vets were in their 80's, Korea Vets where five years behind. What would happen to VAC's huge infrastructure and thousands of employees? The career paths, the power.

Well, make everyone a Vet, and piss off more generations of deserving ex service people.

 

[Brutus]

I wouldn't be too quick to call this self-preservation at all.  When you think about it, it is far more beneficial to VAC's future to maintain monthly payments and the whole infrastructure required to support them, than it is to make lump sum payments.  It requires a lot fewer people and systems to deal with a file only once than to have to deal with it monthly for the rest of someone's life.  Reducing VAC's workload (which a lump sum payment system does) only makes it easier to eliminate them as redundant.  This is not self-preservation at all.

Financial settlements for disabilities are only one aspect of VA's services. I don't really think the lump sum system was implemented to save time and money for the reasons you stated.

 

[Pusser]

Sorry, disagree with the above. The monthly is spit out by computer and is not reviewed again unless the recipient appeals a deterioration of the disability. I do believe VAC can review the entitlement, as so warned (threatened) when appealing.

Have you ever actually worked in this area?  Computers only make it easier to manage records.  They shift, but do not eliminate work.  If you can close a file completely with a single transaction (i.e. a single lump sum payment), workload is reduced considerably.  Monthly payments, even if computer generated, still need to be monitored, audited, updated, approved, etc.  Furthermore, monthly payments cost money to issue.  Whether it's a cheque, a PWGSC allotment or an electronic funds transfer to a bank account, there are charges for each transaction, which add up pretty quickly. 

Financial settlements for disabilities are only one aspect of VA's services. I don't really think the lump sum system was implemented to save time and money for the reasons you stated.

Perhaps not, but my comment was in reference to another poster stating that a VAC survey which showed veterans are in favour of lump sum payments was an exercise in self preservation.  My argument is that lump sum payments are actually detrimental to the future of VAC (i.e. reduction in workload = opportunity to reduce workforce and perhaps eliminate the Department with another, which is/was being considered) and, therefore, a survey result that supports lump sum payments is not self-preserving.  Whether VAC intended lump sum payments to achieve savings in this way is irrelevant to my point.

 

[Rifleman62]

No Pusser I have not worked in the area. I over simplified spit out of a computer in my post. I will state that you are correct, and my opinion is wrong.

 

[prairefire]

In 1987 I was injured in a parachute accident that resulted in permanent nerve damage to my spine that has left me with random attacks of sciatica and severe and debilitating pain and occasional lack of motor control to my left leg. While this has impacted my overall quality of life I consider myself lucky that I received a pension under the old provisions of the DVA pension benefits. Using the 2010 table as a simple base for comparison it is easy to see that I am much better off than had I had a similar injury today.  Maybe I am missing something but if I live to 78 years of age I think the old system will leave me much better off. I also believe the only reason for the Veterans Charter was to save the govt money.

Married with 2 children born after the injury

Basic Pension at 20%     $479.56
Additional Amount for Married     $119.88
Additional Amount for 1st child       $62.36
Additional Amount for 2nd child    $45.56
Total Montly Pension     $707.36

Injured at age 30 in 1987
Granted 20% Disability Pension in 1990 at age 33
Assume Average Life Expectancy of 78 years
Basic Pension payable for 45 years
Use 2010 as a base figure for averaging basic benefits  45 years X 12months x 479.56
Life time basic benefit is $258,962.40
Married Benefit over 45 years         45 years X 12 months X 119.98
Life Time Married Benfit is $64,735.20
18 years of child benefit         18 years X 12 months X (62.36+45.56)
Life Time child benefit is $23,310.72
Total DVA Pension Benefit is $347,008.32
Veterans Charter Payment $55,215.94
Net Additional Benefit over life $291,792.38

 

[CallOfDuty]

Using the 2010 table as a simple base for comparison it is easy to see that I am much better off than had I had a similar injury today.  Maybe I am missing something but if I live to 78 years of age I think the old system will leave me much better off. I also believe the only reason for the Veterans Charter was to save the govt money.

 
  Exactly......that's why the ombudsman is putting the big push on now for getting rid of the lump sum payments.  Let's hope that things change for the better.

 

[Pusser]

Please note that I'm not defending the lump sum payment as I agree that a lifetime pension benefit is more appropriate

However, one thing that I think people are missing is that the lump sum payment is not intended to be placed under a mattress and provide sufficient funds for the rest of one's life.  The intent is that it is to be invested and the interest is supposed to provide income for the rest of one's life.  Presumably, the lump sum payment is of sufficient amount to purchase an annuity that would provide a monthly payment of about the same amount of the older pension plan.

Unfortunately, doing this requires a certain amount of financial discipline that many of us lack.  There is a real possibility that someone will spend all the money without investing it and be left with nothing in the end. Therein lies the problem.

 

[prairefire]

The more realistic problem is that if my assumption of the $55K payout for an equivalent injury to mine is correct under the Veterans Charter there is a very definite problem.  I would like you to find me and insurance product, annuity or such other financial instrument that will yield an immediate monthly net pension such I am currently receiving and have been since 1990. You would require a return on investment of at least 12% to 15% that was tax free and even then I do not believe it would come close.

 

[dapaterson]

You can get 5% from dividend-paying stocks, which reduces but does not eliminate the tax bill.  On $55K, that would be $2750 per year or about $220/month, before taxes.

 

[observor 69]

You can get 5% from dividend-paying stocks, which reduces but does not eliminate the tax bill.  On $55K, that would be $2750 per year or about $220/month, before taxes.

I guess one of your points is to note that dividend stocks have a tax advantage, true.
As for a dividend -paying stock that one could purchase with confidence that it would pay out 5% per annum it would be quite difficult in these times to find such a stock.
Even if you took a large time frame window on returns one would have to appreciate that the stock market is a gamble on the risk/return involved.
My choice would be a properly asset allocated portfolio of index funds. Many experts regard this as an average approx. 5% return.

 

[dogger1936]

Investing into stocks is a great idea. However what about all those bills when you unemployed and too broke to work. I keep seeing
excellent ideas presented, or precieved excellent idea's. Yet most don't bother to factor in realities of the injured. From what I seen here only the injured or those close to the injured are absolutely angry.

 

[CallOfDuty]

  Pusser, when you're injured and receive a lump sum benefit, there is absolutely no mention of what to do with the money, except for anything over 12,000 they do offer you 500$ worth of financial planning.  If you choose to take it.
 

 

[Greymatters]

Good financial planning is only part of the issue; choice of lifestyle and housing location also plays a big part. 

Most of the same principles that apply to higher level financing are the same ones you apply to good lower level spending practices. 

Are you paying for what you need or what you want?
When buying are you paying the higher price or could you buy it cheaper somewhere else?
Does it really have to be 'name brand'?
How much are you paying in unnecesary bank or financing fees?
Are you getting the best interest rate for your money?
Are you getting the lowest interest rate for your loans/debts?
Are you letting someone else manage your money or are you doing it yourself?
Have you gotten rid of (or at least control of) your 'small debt' prior to signing on for 'big debt' (i.e. mortgage)?

Lots of other questions to ask yourself before getting involved in the stock market or any other high level ventures...

 

[jollyjacktar]

You can get 5% from dividend-paying stocks, which reduces but does not eliminate the tax bill.  On $55K, that would be $2750 per year or about $220/month, before taxes.

And if your "investment choice" did not tank as many others did over the last couple of years, you are still behind the eight ball and losing.  The only winner here is VA with all the bucks they save.  Any time they trumpet that they are doing something for our benefit, like this NCV usually it's BS and all smoke and mirrors.  I really hope that I never need the services of these clowns.  It's like the insurance industry, you may wish to suck it up as they will hammer you for putting in a claim and cut to ribbons what you do claim.

 

[Tank Troll]

And if your "investment choice" did not tank as many others did over the last couple of years, you are still behind the eight ball and losing.  The only winner here is VA with all the bucks they save.  Any time they trumpet that they are doing something for our benefit, like this NCV usually it's BS and all smoke and mirrors.  I really hope that I never need the services of these clowns.  It's like the insurance industry, you may wish to suck it up as they will hammer you for putting in a claim and cut to ribbons what you do claim.

That is it in a nut shell

 

[Greymatters]

It's like the insurance industry, you may wish to suck it up as they will hammer you for putting in a claim and cut to ribbons what you do claim.

Ive had several insurance claims and so far havent had a problem, which has surprised me. I suppose they'll get me eventually on a future one...

 

[Pusser]

  Pusser, when you're injured and receive a lump sum benefit, there is absolutely no mention of what to do with the money, except for anything over 12,000 they do offer you 500$ worth of financial planning.  If you choose to take it.

So what's your point?  There is financial counselling available.  Take advantage of it.

 

[dogger1936]

I'll be taking advantage of it and posting the results here. I really want to hear what they want me to do with it. Pay off normal bill's to become debt free for a easier transition or invest etc.

I will gladly post what I am getting and what they are gonna suggest. Plus Ill take their 500 dollars just cause.