Disability Award Increase

Background

The Disability Award provides injured Canadian Armed Forces members or Veterans with a one-time, tax-free payment for the pain and suffering associated with an injury or illness resulting from military service. The Disability Award is paid in recognition of these non-economic effects, of service-related disabilities on the lives of Canadian Armed Forces members and Veterans.

Budget 2016 reaffirmed the Government’s intent to provide more financial support for the most ill and injured Veterans.

As of April 1, 2017, the new maximum Disability Award amount will be increased to $360,000 from the previous maximum of $314,723.89. All Disability Award amounts will be increased proportionally as a percentage of the maximum $360,000 amount.

Anyone who received a Disability Award  prior to April 1, 2017 will receive a one-time, tax-free, lump sum additional payment. No application will be required for this additional payment.

To calculate the amount of the one-time lump sum additional payment, the new maximum Disability Award amount that will go into effect on April 1, 2017 will be adjusted by Consumer Price Index for each year back to 2006 – which is the year the New Veterans Charter was implemented. The amount of the one-time lump sum additional payment will be the difference between this adjusted amount and the Disability Award and/or Death Benefit amount already paid.

The change on April 1, 2017 will result in approximately $700M in tax-free, one-time, lump sum payments being awarded to approximately 67,000 Veterans.

The maximum Disability Award lump-sum amount is comparable to or greater than similar non-economic compensation amounts payable in Canada under private and public sectors insurance plans, by the Workers’ Compensation Board or as non-pecuniary damages awarded by Canadian courts.