Canadian Forces Members and Veterans Re-establishment and Compensation Act
Transitional Provisions
Earnings Loss Benefit
Disability Award and Death Benefit
Consequential Amendments
Children of Deceased Veterans Education Assistance Act
Pension Act
Income Tax Act
Coordinating Amendments
Coming into Force
SCHEDULE
Explanatory Notes
First Session, Forty-second Parliament,
64-65 Elizabeth II, 2015-2016
HOUSE OF COMMONS OF CANADA
BILL C-12
An Act to amend the Canadian Forces Members and Veterans Re-establishment and Compensation Act and to make consequential amendments to other Acts
FIRST READING, MARCH 24, 2016
MINISTER OF VETERANS AFFAIRS AND ASSOCIATE MINISTER OF NATIONAL DEFENCE
90792
RECOMMENDATION
His Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act to amend the Canadian Forces Members and Veterans Re-establishment and Compensation Act and to make consequential amendments to other Acts”.
SUMMARY
This enactment amends the Canadian Forces Members and Veterans Re-establishment and Compensation Act to, among other things,
(a) replace “permanent impairment allowance” with “career impact allowance”;
(b) replace “totally and permanently incapacitated” with “diminished earning capacity”;
(c) increase the percentage in the formula used to calculate the earnings loss benefit;
(d) specify when a disability award becomes payable and clarify the formula used to calculate the amount of a disability award; 
(e) increase the amounts of a disability award; and
(f) increase the amount of a death benefit.
In addition, it contains transitional provisions that provide, among other things, that the Minister of Veterans Affairs must pay, to a person who received a disability award or a death benefit under that Act before April 1, 2017, an amount that represents the increase in the amount of the disability award or the death benefit, as the case may be.
It also makes consequential amendments to the Children of Deceased Veterans Education Assistance Act, the Pension Act and the Income Tax Act.
Available on the Parliament of Canada Web Site at the following address:
http://www.parl.gc.ca
1st Session, 42nd Parliament, 
64-65 Elizabeth II, 2015-2016
HOUSE OF COMMONS OF CANADA
BILL C-12
An Act to amend the Canadian Forces Members and Veterans Re-establishment and Compensation Act and to make consequential amendments to other Acts
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
2005, c. 21
Canadian Forces Members and Veterans Re-establishment and Compensation Act
1 Paragraph 11(1)‍(b) of the Canadian Forces Members and Veterans Re-establishment and Compensation Act is replaced by the following:
(b) has determined, based on an assessment of the veteran under subsection 10(1), that the veteran would not benefit from vocational rehabilitation as a result of their having a diminished earning capacity that is due to the physical or mental health problem in respect of which the rehabilitation services were approved.
2 The portion of subsection 18(4) of the Act before paragraph (b) is replaced by the following:
Continuation of benefit
(4) If the Minister determines that the veteran has a diminished earning capacity that is due to the physical or mental health problem for which the rehabilitation plan was developed, the earnings loss benefit continues to be payable to the veteran after the plan has been completed or cancelled until the earlier of
(a) the day on which the Minister determines that the veteran no longer has a diminished earning capacity that is due to that health problem, and
3 The description of A in subsection 19(1) of the Act is replaced by the following:
A
is 90% of the veteran’s imputed income for a month; and
4 Subsection 20(1) of the Act is replaced by the following:
Examination or assessment
20 (1) The Minister may, for the purpose of determining whether a veteran may continue to receive an earnings loss benefit, require a veteran who, as a result of a determination that they have a diminished earning capacity, is in receipt of an earnings loss benefit under section 18 — or would, but for their level of income, be in receipt of it — to undergo a medical examination or an assessment by a person specified by the Minister.
5 Subsection 23(1) of the Act is replaced by the following:
Amount of benefit
23 (1) Subject to the regulations, the monthly amount of an earnings loss benefit under section 22 that is payable in respect of a member or a veteran is 90% of the member’s or veteran’s imputed income for a month.
2011, c. 12, s. 8(1)
6 (1) Subparagraph 38(1)‍(b)‍(ii) of the Act is replaced by the following:
(ii) the disability award is not yet payable in accord­ance with section 53.
2011, c. 12, s. 8(2)
(2) Subsections 38(2) and (3) of the Act are replaced by the following:
Amount of allowance
(2) The Minister shall determine the amount of the career impact allowance that may be paid to the veteran in a year, taking into account the potential impact of the permanent and severe impairment on the veteran’s career advancement opportunities. The minimum career impact allowance shall be the amount set out in item 1, column 2, of Schedule 2, and the maximum career impact allowance shall be the amount set out in item 2, column 2.
Diminished earning capacity
(3) The Minister may, on application, increase the career impact allowance that may be paid under subsection (2) by the amount set out in item 2.‍1, column 2, of Schedule 2, if the Minister determines that the veteran has a diminished earning capacity.
7 Subsection 40(2) of the English version of the Act is replaced by the following:
Non-compliance
(2) If a veteran who is required by the Minister to undergo a medical examination or an assessment fails without reasonable excuse to do so, the Minister may cancel the career impact allowance.
8 (1) Paragraph 41(b) of the Act is replaced by the following:
(b) respecting what constitutes a barrier to re-establishment in civilian life and a diminished earning capacity;
(2) Paragraph 41(g) of the French version of the Act is replaced by the following:
g) concernant, pour l’application de l’article 38, ce qui constitue une déficience grave et permanente et la méthode pour établir l’existence et l’ampleur d’une telle déficience chez le vétéran.
9 The description of B in subsection 52(1) of the Act is replaced by the following:
B
is the amount set out in column 3 of Schedule 3 that corresponds to what was, immediately before the disability award becomes payable, the member’s or veteran’s extent of disability, as set out in column 2 of that Schedule, in respect of the aggregate of all of the member’s or veteran’s disability assessments and deemed disability assessments under this Act.
10 Section 53 of the Act is replaced by the following:
When award payable
53 A disability award under section 45, 47 or 48 becomes payable when both of the following conditions are met:
(a) in the opinion of the Minister, the disability has stabilized;
(b) an assessment of the extent of the disability has been made.
11 The Act is amended by adding the following after section 94:
Transitional provisions — April 1, 2017
94.‍01 The Governor in Council may make regulations
(a) respecting the provision of information or documents to the Minister by a person who may be entitled to an amount under any of sections 21 to 24 of An Act to amend the Canadian Forces Members and Veterans Re-establishment and Compensation Act and to make consequential amendments to other Acts; and
(b) providing for the reimbursement of fees for financial advice obtained by a person in relation to an amount that is paid or payable to them under any of sections 21 to 24 of that Act.
12 Section 98 of the Act is repealed.
13 Schedule 1 to the Act is amended by replacing the references after the heading “SCHEDULE 1” with the following:
(Section 37 and paragraphs 41(d) and 94(c))
2015, c. 36, s. 224
14 Schedule 2 to the Act is amended by replacing the references after the heading “SCHEDULE 2” with the following:
(Subsections 38(2) and (3), section 44.‍2, subsection 58(1), sections 61 and 65.‍2 and paragraph 94(c))
2011, c. 12, s. 19
15 The portion of item 2.‍1 of Schedule 2 to the Act in column 1 is replaced by the following:
Career impact allowance supplement for diminished earning capacity
16 The portion of item 3 of Schedule 2 to the Act in column 2 is replaced by the following:
360,000.‍00 (lump sum)
17 Schedule 3 to the Act is replaced by the Schedule 3 set out in the schedule to this Act.
Replacement of “permanent impairment allowance”
18 The Act is amended by replacing “permanent impairment allowance” with “career impact allowance” in the following provisions:
(a) the definition compensation in subsection 2(1);
(b) the heading before section 38;
(c) the portion of subsection 38(1) before paragraph (a) and subsection (1.‍1);
(d) the portion of section 39 before paragraph (a);
(e) subsection 40(1);
(f) the description of B in subsection 40.‍1(4);
(g) the description of B in subsection 40.‍2(4);
(h) subsection 40.‍5(1);
(i) the portion of subsection 88(4) before paragraph (a);
(j) paragraph 94(e); and
(k) items 1 and 2 of Schedule 2.
Transitional Provisions
Earnings Loss Benefit
Period before October 1, 2016
19 (1) For greater certainty, the amount of an earnings loss benefit that is payable in respect of a period before October 1, 2016 is to be determined in accordance with subsection 19(1) or 23(1) of the Canadian Forces Members and Veterans Re-establishment and Compensation Act and the regulations made under subsection 19(2) or 23(4) of that Act, as those provisions of that Act and those regulations read during the period in respect of which the benefit is payable, regardless of the date on which the benefit is paid.
Period after September 30, 2016
(2) The amount of an earnings loss benefit that is payable in respect of a period after September 30, 2016 is to be determined as if subsections 19(1) and 23(1) of the Canadian Forces Members and Veterans Re-establishment and Compensation Act and the regulations made under subsections 19(2) and 23(4) of that Act — as those provisions of that Act and those regulations read during the period in respect of which the benefit is payable — had been in force since April 1, 2006, regardless of whether or not the veteran or the member’s or veteran’s survivor or orphan was in receipt of an earnings loss benefit before October 1, 2016.
Disability Award and Death Benefit
Definitions
20 The following definitions apply in this section and sections 21 to 32.
Act means the Canadian Forces Members and Veterans Re-establishment and Compensation Act. (Loi)
dependent child has the same meaning as in subsection 2(1) of the Act. (enfant à charge)
Minister means the Minister of Veterans Affairs. (ministre) 
survivor has the same meaning as in subsection 2(1) of the Act. (survivant) 
Member or veteran who received disability award
21 (1) The Minister must pay to a member or a veteran who received, in whole or in part, a disability award under section 45, 47 or 48 of the Act before April 1, 2017, and who is alive on April 1, 2017, an amount determined in accordance with the formula
A − B
where
A
is the amount set out in column 3 of Schedule 3 to the Act, as that Schedule read on April 1, 2017, that corresponds to the member’s or veteran’s extent of disability, as set out in column 2, for which the disability award was received, reduced — for every calendar year from2016 until the year in which the disability award was received — by a percentage calculated in accordance with the method of calculating the percentages by which the amounts set out in Schedule 3 to the Act are periodically adjusted; and
B
is the amount of the disability award that was payable to the member or the veteran under subsection 52(1) of the Act.
Death of member or veteran before amount paid
(2) If the member or veteran dies before the amount is paid under subsection (1), the Minister must pay that amount, in accordance with section 55 of the Act, to a survivor or a person who was, at the time of the member’s or veteran’s death, a dependent child.
Death of member or veteran before April 1, 2017
22 If a member or a veteran who received, in whole or in part, a disability award under section 45, 47 or 48 of the Act before April 1, 2017 dies before that day, the Minister must pay, in accord­ance with section 55 of the Act, to a survivor or a person who was, at the time of the member’s or veteran’s death, a dependent child — if that survivor or person is alive on April 1, 2017 — an amount determined in accordance with the formula
A − B
where
A
is the amount set out in column 3 of Schedule 3 to the Act, as that Schedule read on April 1, 2017, that corresponds to the member’s or veteran’s extent of disability, as set out in column 2, for which the disability award was received, reduced — for every calendar year from 2016 until the year in which the disability award was received — by a percentage calculated in accordance with the method of calculating the percentages by which the amounts set out in Schedule 3 to the Act are periodically adjusted; and
B
is the amount of the disability award that was payable to the member or the veteran under subsection 52(1) of the Act.
Disability award received by survivor or dependent child
23 The Minister must pay, in accordance with section 55 of the Act, to a person who received a disability award under subsection 50(1) or (2) of the Act before April 1, 2017, and who is alive on April 1, 2017, an amount determined in accord- ance with the formula
A − B
where
A
is the amount set out in column 3 of Schedule 3 to the Act, as that Schedule read on April 1, 2017, that corresponds to the member’s or veteran’s extent of disability, as set out in column 2, for which the disability award was received, reduced — for every calendar year from 2016 until the year in which the disability award was received — by a percentage calculated in accordance with the method of calculating the percentages by which the amounts set out in Schedule 3 to the Act are periodically adjusted; and
B
is the amount of the disability award that was payable under subsection 52(1) of the Act.
Death benefit
24 The Minister must pay, in accordance with section 59 of the Act, to a person who received a death benefit under section 57 of the Act before April 1, 2017, and who is alive on April 1, 2017, an amount determined in accordance with the formula
A − B
where
A
is the amount set out in item 3, column 2, of Schedule 2 to the Act, as that Schedule read on April 1, 2017, reduced — for every calendar year from 2016 until the year in which the death benefit was received — by a percentage calculated in accordance with the method of calculating the percentages by which the amount set out in item 3, column 2, is periodically adjusted; and
B
is the amount of the death benefit that was payable under subsection 58(1) of the Act.
Application
25 Sections 21 to 23 apply in respect of each disability award received by or in respect of a member or a veteran.
Amount of award or benefit equal to zero
26 For the purposes of sections 21 to 24, a person is considered to have received a disability award or a death benefit even if the amount that was paid to them was equal to zero.
Lump sum
27 An amount that is to be paid under any of sections 21 to 24 is to be paid as a lump sum.
Power to require information
28 The Minister may, for the purposes of establishing a person’s entitlement to an amount under any of sections 21 to 24, require a person who may be entitled to an amount to provide to the Minister the information or documents set out in the regulations made under the Act.
Information to be made available to Minister
29 Personal information, as defined in section 3 of the Privacy Act, held by a government institution, as defined in that section, is, if requested by the Minister, to be made available to the Minister for the purposes of sections 21 to 24.
Entitlement ceases on death
30 If a person to whom an amount is to be paid under any of sections 21 to 24 dies before the amount is paid, that person’s entitlement to the amount ceases on their death.
Amount deemed to be compensation
31 An amount paid or payable under any of sections 21 to 24 is deemed, for the purposes of sections 89 and 90 of the Act, to be compensation as defined in subsection 2(1) of the Act.
Income Tax Act
32 An amount paid or payable under any of sections 21 to 24 is deemed, for the purposes of paragraph 81(1)‍(d.‍1) of the Income Tax Act, to be a disability award or a death benefit, as the case may be, payable to the taxpayer under Part 3 of the Act.
Consequential Amendments
R.‍S.‍, c. C-28; 1990, c. 43, s. 43
Children of Deceased Veterans Education Assistance Act
2005, c. 21, s. 99(2)
33 Subparagraph (f)‍(iii) of the definition student in section 2 of the Children of Deceased Veterans Education Assistance Act is replaced by the following:
(iii) the member’s or veteran’s extent of disability, in respect of the aggregate of all of the member’s or veteran’s disability assessments under that Act and, if applicable, the Pension Act, is equal to or greater than the lowest extent of disability set out in column 2 of Schedule 3 to the Canadian Forces Members and Veterans Re-establishment and Compensation Act in respect of a rate of award of 50%.‍ (étudiant)
R.‍S.‍, c. P-6
Pension Act
2011, c. 12, s. 20
34 Subsection 72(1.‍1) of the Pension Act is replaced by the following:
Ineligibility — career impact allowance
(1.‍1) A member of the forces who is eligible for a career impact allowance under the Canadian Forces Members and Veterans Re-establishment and Compensation Act is not eligible to be awarded an exceptional incapacity allowance.
R.‍S.‍, c. 1 (5th Supp.‍)
Income Tax Act
35 Paragraph 6(1)‍(f.‍1) of the Income Tax Act is replaced by the following:
Canadian Forces members and veterans income replacement benefits
(f.‍1) the total of all amounts received by the taxpayer in the year on account of an earnings loss benefit, a supplementary retirement benefit or a career impact allowance payable to the taxpayer under Part 2 of the Canadian Forces Members and Veterans Re-establishment and Compensation Act;
Coordinating Amendments
2012, c. 19
36 (1) In this section, other Act means the Jobs, Growth and Long-term Prosperity Act.
(2) If section 18 of this Act comes into force before subsection 683(2) of the other Act, then
(a) section 228 of the Economic Action Plan 2015 Act, No. 1 is repealed; and
(b) on the day on which that subsection 683(2) comes into force, paragraph 94(e) of the Canadian Forces Members and Veterans Re-establishment and Compensation Act is replaced by the following:
(e) respecting the provision of any information, declaration or document to the Minister by any person who applies for or is in receipt of rehabilitation services, vocational assistance, an earnings loss benefit, a Canadian Forces income support benefit, a career impact allowance, a retirement income security benefit, a clothing allowance, a family caregiver relief benefit, or a payment or reimbursement of fees in respect of career transition services under this Act, and authorizing the Minister to suspend the delivery of the services or assistance, the payment of the benefit or allowance or the payment or reimbursement of fees until the information, declaration or document is provided;
(3) If section 18 of this Act and subsection 683(2) of the other Act come into force on the same day, then that section 18 is deemed to have come into force before that subsection 683(2) and subsection (2) applies as a consequence.
Coming into Force
April 1, 2017
37 (1) Sections 1, 2, 4, 6 to 18 and 20 to 35 come into force on April 1, 2017.
October 1, 2016
(2) Sections 3, 5 and 19 come into force on October 1, 2016.
SCHEDULE
(Section 17)
SCHEDULE 3
(Subsection 52(1) and paragraph 94(c))
Disability Award
Column 1
Column 2
Column 3
Rate of Award
Extent of Disability
Lump Sum Amount
(%)
(%)
($)
100
98-100
360,000.‍00
95
93-97
342,000.‍00
90
88-92
324,000.‍00
85
83-87
306,000.‍00
80
78-82
288,000.‍00
75
73-77
270,000.‍00
70
68-72
252,000.‍00
65
63-67
234,000.‍00
60
58-62
216,000.‍00
55
53-57
198,000.‍00
50
48-52
180,000.‍00
45
43-47
162,000.‍00
40
38-42
144,000.‍00
35
33-37
126,000.‍00
30
28-32
108,000.‍00
25
23-27
90,000.‍00
20
18-22
72,000.‍00
15
13-17
54,000.‍00
10
8-12
36,000.‍00
5
5-7
18,000.‍00
4
4
14,400.‍00
3
3
10,800.‍00
2
2
7,200.‍00
1
1
3,600.‍00
Published under authority of the Speaker of the House of Commons
EXPLANATORY NOTES
Canadian Forces Members and Veterans Re-establishment and Compensation Act
Clause 1: Relevant portion of subsection 11(1):
11 (1) The Minister may, on application, provide rehabilitation serv­ices and vocational assistance to a veteran’s spouse or common-law partner if the Minister
.‍.‍. 
(b) has determined, based on an assessment of the veteran under subsection 10(1), that the veteran would not benefit from vocational rehabilitation as a result of being totally and permanently incapacitated by the physical or mental health problem in respect of which the rehabilitation services were approved.
Clause 2: Relevant portion of subsection 18(4):
(4) If the Minister determines that the veteran is unable to engage in suitable gainful employment as a result of being totally and permanently incapacitated by the physical or mental health problem for which the rehabilitation plan was developed, the earnings loss benefit continues to be payable to the veteran after the plan has been completed or cancelled until the earlier of
(a) the day on which the Minister determines that the veteran is no longer unable to engage in suitable gainful employment as a result of being totally and permanently incapacitated by that health problem, and
Clause 3: Existing text of subsection 19(1):
19 (1) Subject to the regulations, the monthly amount of the earnings loss benefit under section 18 that is payable to a veteran shall be determined in accordance with the formula
A — B
where
A
is 75% of the veteran’s imputed income for a month; and
Clause 4: Existing text of subsection 20(1):
20 (1) The Minister may, for the purpose of determining whether a veteran may continue to receive an earnings loss benefit, require a veteran who, as a result of a determination of total and permanent incapacity, is in receipt of an earnings loss benefit under section 18 — or would, but for their level of income, be in receipt of it — to undergo a medical examination or an assessment by a person specified by the Minister.
Clause 5: Existing text of subsection 23(1):
23 (1) Subject to the regulations, the monthly amount of an earnings loss benefit under section 22 that is payable in respect of a member or a veteran is 75% of the member’s or veteran’s imputed income for a month.
Clause 6: (1) Relevant portion of subsection 38(1):
38 (1) The Minister may, on application, pay a permanent impairment allowance to a veteran who has one or more physical or mental health problems that are creating a permanent and severe impairment if the veteran, in respect of each of those health problems,
.‍.‍. 
(b) has received a disability award under Part 3 or a pension for disability under the Pension Act, or would have received such an award or pension but has not because
.‍.‍. 
(ii) the disability award is not yet payable because, in the opinion of the Minister, the disability has not stabilized.
(2) Existing text of subsections 38(2) and (3):
(2) The Minister shall determine the amount of the permanent impairment allowance that may be paid to the veteran in a year. The minimum permanent impairment allowance shall be the amount set out in column 2 of item 1 of Schedule 2, and the maximum permanent impairment allowance shall be the amount set out in column 2 of item 2 of that Schedule.
(3) The Minister may, on application, increase the permanent impairment allowance that may be paid under subsection (2) by the amount set out in item 2.‍1, column 2, of Schedule 2, if the Minister determines that the veteran is totally and permanently incapacitated.
Clause 7: Existing text of subsection 40(2):
(2) If a veteran who is required by the Minister to undergo a medical examination or an assessment fails without reasonable excuse to do so, the Minister may cancel the permanent impairment allowance.
Clause 8: (1) and (2) Relevant portion of section 41:
41 The Governor in Council may make regulations
.‍.‍. 
(b) respecting the determination of what constitutes suitable gainful employment, a barrier to re-establishment in civilian life and total and permanent incapacity;
.‍.‍. 
(g) respecting, for the purposes of section 38, what constitutes a permanent and severe impairment, the manner of determining whether a veteran has a permanent and severe impairment and the extent of the permanent and severe impairment.
Clause 9: Existing text of subsection 52(1):
52 (1) Subject to section 54, the amount of a disability award payable in respect of a member or a veteran shall be determined by the formula
A — B
where
A
is the amount set out in column 3 of Schedule 3 that corresponds to the member’s or veteran’s extent of disability, as set out in column 2 of that Schedule, in respect of the aggregate of all of the member’s or veteran’s disability assessments and deemed disability assessments under this Act; and
B
is the amount set out in column 3 of Schedule 3 in respect of the extent of disability set out in column 2 of that Schedule that corresponds to the difference, if any, between
(a) the member’s or veteran’s extent of disability, in respect of the aggregate of all of the member’s or veteran’s disability assessments or deemed disability assessments under this Act,
and
(b) the member’s or veteran’s extent of disability for which the disability award is to be paid.
Clause 10: Existing text of section 53:
53 A disability award under section 45, 47 or 48 becomes payable whenever, in the opinion of the Minister, the disability has stabilized.
Clause 11: New.
Clause 12: Existing text of section 98:
98 (1) On the coming into force of this section, the amounts set out in column 2 of Schedule 1 to this Act shall be adjusted in accordance with sections 19 to 22 of the War Veterans Allowance Act, for the period beginning on April 1, 2005 and ending on the day on which this section comes into force, as if they were amounts set out in column II of the schedule to that Act.
(2) On the coming into force of this section, the amount set out in column 2 of item 4 of Schedule 2 to this Act shall be adjusted in accordance with sections 74 to 77 of the Pension Act, for the period beginning on April 1, 2005 and ending on the day on which this section comes into force, as if it were an amount set out in Schedule III to that Act.
(3) On the coming into force of this section, the amounts set out in column 3 of Schedule 3 to this Act in respect of classes 21 to 24 shall be adjusted in accordance with sections 74 to 77 of the Pension Act, for the period beginning on April 1, 2005 and ending on the day on which this section comes into force, as if they were amounts set out in Schedule I to that Act.
Children of Deceased Veterans Education Assistance Act
Clause 33: Relevant portion of the definition:
student means
.‍.‍. 
(f) a child of a member or a veteran, as those terms are defined in subsection 2(1) of the Canadian Forces Members and Veterans Re-establishment and Compensation Act, if
.‍.‍. 
(iii) the member’s or veteran’s extent of disability, in respect of the aggregate of all of the member’s or veteran’s disability assessments under that Act and, if applicable, the Pension Act, is equal to or greater than the lowest extent of disability set out in column 2 of Schedule 3 to the Canadian Forces Members and Veterans Re-establishment and Compensation Act in respect of class 11.‍ (étudiant)
Pension Act
Clause 34: Existing text of subsection 72(1.‍1):
(1.‍1) A member of the forces who is eligible for a permanent impairment allowance under the Canadian Forces Members and Veterans Re-establishment and Compensation Act is not eligible to be awarded an exceptional incapacity allowance.