Settlement finalized in $283M disabled veterans class action, but benefits policy changed

The first of thousands of injured Canadian military veterans are set to soon begin receiving disability payment top-ups under a $283-million class-action settlement, but policy changes mean no newly discharged members will be entitled to the extra benefits.

The case involves a Federal Court judge's ruling that many veterans who had served in certain difficult circumstances, such as on submarines, in special forces or in areas with high costs of living, weren't being paid the long-term disability benefits they were entitled to.

The federal government did not challenge the 2020 ruling, and ultimately agreed in a recently finalized settlement that more than 8,600 former members should receive retroactive payments as well as increased monthly benefits.

"We hope that payments will be starting soon," said Daniel Wallace, the Halifax lawyer who led the class-action lawsuit.

Lead plaintiff served in Afghanistan

The lead plaintiff was Simon Logan, a special operations soldier who served in Afghanistan and was a warrant officer when he received an involuntary medical release from the Canadian Forces in 2016 following a 28-year career.

The military calculates long-term disability at 75 per cent of a member's monthly pay, but the Department of National Defence had only used Logan's base salary to determine his payments, and did not include an allowance he earned as a "special operations assaulter."

That meant Logan received only $5,100 per month in disability payments, instead of nearly $8,000.

Three years ago, a judge ruled in favour of Logan and other former military members in similar situations, writing that monthly allowances should be used in disability calculations.

The federal government accepted that ruling, but subsequently changed its policy to "expressly exclude" allowances in the calculation of long-term disability benefits for Canadian Forces members released after Dec. 31, 2021, according to court records filed earlier this year.

In an email Tuesday, National Defence said the Federal Court ruled there was "ambiguity" in the definition of monthly pay, and that the benefits policy was subsequently amended "to address the court's decision."

"Allowances are benefits intended for [Canadian Armed Forces] members performing particular activities and operations. They are aimed at compensating members and their families for working in unique, demanding and potentially high-risk circumstances," the email said.

"They are not considered part of a member's basic pay rate, and were never intended to be factored into the calculation of long-term disability."

The new policy does not affect those who were discharged before 2022.

Under the settlement, about half the veterans entitled to the money will be paid their retroactive benefits by June 2024, with the second half receiving payment by June 2025. Higher monthly benefits will begin once a veteran receives the retroactive payment, according to Wallace.

Manulife, the insurance company that administers the disability benefits, will send out the payments to the more than 8,000 veterans who qualify under the settlement.

People 'fell through the cracks'

But Clancy Keoughan, an Edmonton man who served with the Canadian Forces for 29 years before being medically discharged due to PTSD, said he and likely others have been left off the list because the military's discharge clerks sometimes didn't notify Manulife of the allowances.

Keoughan, a former military police officer, said he was paid an allowance because he was stationed in the expensive city of Victoria for 14 years. He worries about veterans who are homeless or living in deep poverty who won't be aware they may be entitled to more disability money.

He hopes publicizing the settlement will help change that.

"There's a lot of people out there who fell through the cracks," he said Monday. "Some definitely need it a lot more than I do."

There is an appeal process for those left off the list, and Wallace said his law firm has heard from about a dozen veterans who believe they are entitled to higher payments but aren't included in the settlement.