Author Topic: SISIP, C-55, and discouraging Veterans from returning to work  (Read 5957 times)

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Callaghan

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SISIP, C-55, and discouraging Veterans from returning to work
« on: December 24, 2013, 02:28:46 PM »
A little while ago I posted that I'd finally received a response from SISIP regarding my complaints on how they were handling the part-time earnings offset to LTD. My CM agreed that it was a problem, and that an error had clearly occurred. We sent the issue up the ladder at SISIP for resolution. The following is the response that we got. This is not what C-55 was intended to do. Wondering how many others out there are finding themselves in the same boat? And yes, I am escalating it up to the next level at SISIP.

***

The situation you describe is not best classified as a problem, rather a natural part of claim progression. As your claim advances and the years pass, your 75% entitlement receives the applicable Cost of Living increase each year. As this occurs, the gap between your 75% gross benefit entitlement (prior to applicable offsets) and your deemed salary at release narrows. This means that with each passing year, the amount you can earn and be offset at 50% also gets smaller. This is a natural part of your claim progression.

The 50% offset provision is a somewhat unique provision in the SISIP policy and affords members in receipt of LTD, who also participated in the SISIP Vocational Rehabilitation program in some way, with some what of an "incentive" when they initially return to work. That incentive is that your employment earnings are not immediately offset at 100%. That being said, as your claim progresses, if you have a claim open long enough, and as annual Cost of Living adjustments are applied, that gap narrows until your 75% gross benefit entitlement (prior to applicable offsets) would eventually equal your deemed salary at release. Once you reach this point, you no longer have a 50% offset limit. All of your employment earnings becomes offset at 100%.

Effective Oct 3/11, an Enhancement was applied to all active LTD recipients. You are aware of this enhancement which effectively increased your 75% gross benefit entitlement (prior to offset) to 75% of $2,700, or $2,025. This enhancement was done across the board to all active SISIP LTD recipients to align your benefit entitlement with the new prescribed benefit level. For LTD recipients for whom their benefit was calculated based on the deemed salary, the process was as I just described.

This process effectively caused your benefit to "jump the queue" and receive a large inflation at a single point in time. Prior to the application of this Enhancement, your 75% gross benefit entitlement (prior to applicable offsets) was $1,511.86. As you were only released in 2010, you had only experienced one such annual increase prior to the application of the Enhancement on Oct 3/11. Had this Enhancement not happened, you naturally would have seen a progressive decrease in your 50% offset limit as annual Cost of Living amounts were applied to your benefit. As this was a large increase applied at one time, I can understand that the loss of the 50% offset limit must have seemed like a bit of a shock to the system; however, it was anticipated based on the nature of this one time monetary inflation of your 75% gross benefit entitlement (prior to applicable offsets).

I trust this additional information will put what has happened to your 50% limit in to a bit more context. At this stage, there will be no changes to the application of this Enhancement to your LTD benefit, Mr. Callaghan. It has been applied to your benefit following the prescribed criteria.

We, at Manulife, are unable to affect any changes to this provision as it has been applied across our line of business. It was developed to bring incomes under the LTD plan in line with a new prescribed minimum benefit and to align the SISIP benefit with other military benefit providers.

Kristopher Anderson
Supervisor - Disability/Life Claims, SISIP Services

Callaghan

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Re: SISIP, C-55, and discouraging Veterans from returning to work
« Reply #1 on: May 13, 2014, 04:41:03 AM »
Update

Minister of National Defence, the dis/Honourable Rob Nicholson, finally acknowledged a complaint/challenge that I've been throwing forward since 2012.  There are several factual errors in his response, copied below - how many can you find?  Other background info/emails attached below that.  I’ve redacted the names of certain individuals to protect their privacy.  At the same time, I’ve also deleted the privacy statements attached to almost every single one of the emails (funny, the only email that didn’t have a privacy statement was the one that apparently came from Nicholson’s office!).
I’ve got much more to say on this issue, since I’ve been fighting it since April 2012, and it effectively means that I have no net gain from any part-time work --- all earnings are being deducted at dollar-for-dollar, rather than the fifty-cent-per-dollar that is supposed to occur on the SISIP (and VAC) forms of LTD.
Or perhaps Nicholson was seeing into the future with his comment, since it does appear that this will be yet another class-action law-suit against the Harper regime over their dishonouring of any and all obligations to Canada’s disabled veterans.

Oh, and C-55 most certainly does apply to SISIP, since it was C-55 that increased the base-value of both SISIP-LTD and VAC-ELB, and it is the manner in which that increase was coded/interpreted that is causing this clawback of any and all earnings.

________________________________________
From: P-OTG.MCU@intern.mil.ca
Sent: Mon 12-May-14 4:21 PM
Dear Mr. Callaghan:

Your correspondence of 7 February 2014 was forwarded to me by Member of Parliament Peter Stoffer. Thank you for writing.

The health and welfare of the members of the Canadian Armed Forces are of the utmost importance, and I take this responsibility seriously.

The issue of calculation of long term disability (LTD) benefits for those who participated in the Vocational Rehabilitation Program is currently under litigation, and therefore it would be inappropriate for me to comment about this matter at this time.

Bill C-55 (Enhanced New Veterans Charter Act) pertains to benefits administered by Veterans Affairs Canada, and as such it does not govern the Service Income Security Insurance Plan (SISIP) LTD plan.

I trust that this information is helpful, and I would like to take this opportunity to thank you for your service in the defence of Canada.

Yours truly,

Hon. Rob Nicholson, PC, QC, MP
Minister of National Defence

________________________________________
From: ME
Sent: Fri 07-Feb-14
To: peter.stoffer.a1@parl.gc.ca [mailto:peter.stoffer.a1@parl.gc.ca]
[NOTE: It is my understanding that all of the following correspondence was forwarded to both Nicholson and Fantino]

I would suggest, based on the correspondence that I’ve had with other veterans through my activity as an active member of the Canadian Veterans Advocacy, that this issue that I identified, and which seems to be supported through the correspondence received by the various levels of SISIP management (the levels above my case-manager (who, by the way has now been changed to a new case-manager, one who has had several complaints raised against him, and which now has me concerned over my continued status as eligible for LTD through SISIP). The massive clawback indicated may only be being applied to those of us who were on SISIP-LTD prior to the implementation of C-55.  However, I also have a concern over the practice of applying the annual COLA increases against our possible employment-offset --- while it would clearly take decades for any noticeable effect to occur, especially given the low-paying positions that most veterans, especially those with PTSD or other OSI’s might possibly be able to obtain, the very practice of applying the COLA increases against our possible earning’s potential, when the offset is meant to enable us to regain the difference between our pre-release pay and the 75% LTD --- a calculation that does not truly apply to those of us who were Reservists, since our LTD is based on a “deemed” salary that does not actually reflect our true potential military pay or our assumed civilian employment!  In truth, our civilian pay is actively held against us, and if we were lucky enough to be under a collective agreement through our civilian pay that would possibly provide any form of LTD for our medical limitations, that LTD is held directly against our military/SISIP-LTD, meaning that we are always receiving less than our actual pre-injury and pre-release pay … in my case, my base SISIP-LTD is roughly 30% of my actual pay at the time that my PTSD caused me to leave my civilian job … I actually ended up on OntarioWorks (welfare) for some time after using up all of my EI benefits!  And I had to repay those benefits to the military prior to being released and in order to qualify for SISIP!!!!

The general nature of the letter is correct, but the actual context is soooooo much more complicated.

Walter

PS … thank you for taking my concerns seriously, and once again standing up for us.
Peter Stoffer – you have continued to show integrity and honour, and I cannot thank you enough for how you have clearly demonstrated time and time again that you truly do care what is happening to us.  THANK YOU!
________________________________________
From: peter.stoffer.a1@parl.gc.ca [mailto:peter.stoffer.a1@parl.gc.ca]
Sent: 6-Feb-14 3:40 PM
To: Walter Callaghan
Subject: SISIP LTD letter
Hi Walter,
Peter has drafted a letter to the Minister about the SISIP-LTD issue you both talked about at the town hall in Toronto a couple of weeks ago.
Can you take a quick look to make sure it reflects your concerns?
Thank you.  I have pasted it below.
Holly Brown
Assistant to Peter Stoffer, MP | Bureau du député Peter Stoffer
Official Opposition Critic for Veterans Affairs  | Le Porte-Parole de l'Opposition Officielle pour Les Anciens Combattants.
New Democratic Party | Nouveau Parti démocratique
2900 Hwy #2 Fall River, NS  B2T 1W4
Phone: (902) 861-2311 | Email: stoffp0@parl.gc.ca
________________________________________

February 6, 2014

Hon. Robert Nicholson, P.C., M.P.
Minister of National Defence
101 Colonel By Drive
Ottawa, ON K1A 0K2
Hon. Julian Fantino, P.C., M.P.
Minister of Veterans Affairs
66 Slater Street
Ottawa, On  K1A 0P4
Dear Minister Nicholson and Minister Fantino,
I am writing on behalf of Walter Callaghan.  Mr. Callaghan receives SISIP-LTD.  He also works part-time and is clawed back dollar per dollar on SISIP-LTD for his part-time earnings.   
Mr. Callaghan suggests that a misinterpretation of the increase in base benefits under Bill C-55 has removed the earnings-offset limit or the amount the veteran is able to earn from part-time employment. Since Bill C-55 came into effect, all part-time earnings are deducted from SISIP LTD benefits dollar for dollar.  This practise further discourages veterans trying to return to work and transition to civilian life. 
I ask that you review Mr. Callaghan’s attached correspondence and reply directly to him.  His correspondence explains the issue in detail.
I thank you in advance for your time and consideration.
Sincerely,
Peter Stoffer, MP
Sackville-Eastern Shore
________________________________________

My original email to MP Stoffer, asking for help :
From : ME
Sent : Sun 19-Jan-14 8:47 PM
To : peter.stoffer@parl.gc.ca

Mr. Stoffer,
As I mentioned during the Town Hall that you did this past Tuesday in Toronto, there is a new issue with SISIP-LTD that I have identified.  I have forwarded the email correspondence that shed some light on this issue.
In short, as a result of a misinterpretation of the increase in base-benefits under C-55 (2011), there has been an ongoing clawback of the potential earnings that were allowed while receiving SISIP-LTD.  What this has effectively done is removed the earnings-offset limit, or the amount that a veteran was able to earn from P/T or Casual employment which would be offset against their SISIP-LTD at 50-cents/dollar; as a result of C-55, all potential P/T or Casual earnings are being deducted at dollar/dollar.  It also appears to be the case that veterans who were released after April 2012 (the month in which C-55 came into effect) may not be having their LTD benefits affected in this manner.

A second troubling issue is the indicator that SISIP has also been reducing the potential earnings offset amount by the yearly COLA, a practice that likely wasn’t identified until now because of how small that amount is and the difficulty that most veterans, especially those who would continue to qualify for SISIP-LTD, have in securing good paying P/T or casual employment.
Regards,
Walter Callaghan
________________________________________
From: [SISIP Supervisor]
Sent: 24-Dec-13 8:36 AM
To: Walter Callaghan
Cc: [Case-Manager]
Subject: RE: Question on LTD deductions
Thank you for the additional clarification regarding your inquiry.  The situation you describe is not best classified as a problem, rather a natural part of claim progression.

As your claim advances and the years pass, your 75% entitlement receives the applicable Cost of Living increase each year.  As this occurs, the gap between your 75% gross benefit entitlement (prior to applicable offsets) and your deemed salary at release narrows.  This means that with each passing year, the amount you can earn and be offset at 50% also gets smaller.  This is a natural part of your claim progression.   

The 50% offset provision is a somewhat unique provision in the SISIP policy and affords members in receipt of LTD, who also participated in the SISIP Vocational Rehabilitation program in some way, with some what of an "incentive" when they initially return to work.  That incentive is that your employment earnings are not immediately offset at 100%.  That being said, as your claim progresses, if you have a claim open long enough, and as annual Cost of Living adjustments are applied, that gap narrows until your 75% gross benefit entitlement (prior to applicable offsets) would eventually equal your deemed salary at release.  Once you reach this point, you no longer have a 50% offset limit. All of your employment earnings becomes offset at 100%.

Effective Oct 3/11, an Enhancement was applied to all active LTD recipients.  You are aware of this enhancement which effectively increased your 75% gross benefit entitlement (prior to offset) to 75% of $2,700, or $2,025.  This enhancement was done across the board to all active SISIP LTD recipients to align your benefit entitlement with the new prescribed benefit level.  For LTD recipients for whom their benefit was calculated based on the deemed salary, the process was as I just described.

This process effectively caused your benefit to "jump the queue" and receive a large inflation at a single point in time.  Prior to the application of this Enhancement, your 75% gross benefit entitlement (prior to applicable offsets) was $1,511.86.  As you were only released in 2010, you had only experienced one such annual increase prior to the application of the Enhancement on Oct 3/11.  Had this Enhancement not happened, you naturally would have seen a progressive decrease in your 50% offset limit as annual Cost of Living amounts were applied to your benefit.  As this was a large increase applied at one time, I can understand that the loss of the 50% offset limit must have seemed like a bit of a shock to the system; however, it was anticipated based on the nature of this one time monetary inflation of your 75% gross benefit entitlement (prior to applicable offsets).

I trust this additional information will put what has happened to your 50% limit in to a bit more context.  At this stage, there will be no changes to the application of this Enhancement to your LTD benefit, Mr. Callaghan.  It has been applied to your benefit following the prescribed criteria.

We, at Manulife, are unable to affect any changes to this provision as it has been applied across our line of business.  It was developed to bring incomes under the LTD plan in line with a new prescribed minimum benefit and to align the SISIP benefit with other military benefit providers.

If you have any further concerns regarding this Enhancement, please direct them to the Senior VP at SISIP Financial Services:
               
Mr. Larry Mohr
Senior Vice President Commercial Services
Canadian Forces Morale & Welfare Services
4210 Labelle Street
Ottawa ON K1A 0K2

Please note that any potential change that you may wish to be considered regarding the calculation of your LTD benefit would have to be applicable to the Enhancement applied to all applicable, active LTD recipients.  No potential AdHoc change will be considered for your benefit alone.

Once again, thank you for your inquiry.   

Supervisor - Disability/Life Claims, SISIP Services
Chef de section - Règlements invalidité/vie, Services du RARM
2727 Joseph Howe Drive | Halifax, Nova Scotia B3J 2X5
________________________________________

From:        Walter Callaghan <wcallaghan@sympatico.ca>
To:        [SISIP Supervisor]
Cc:        [Case-Manager]
Date:        23-12-13 12:40 PM
Subject:        RE: Question on LTD deductions
Mr. [SISIP Supervisor],
 
Thanks for the quick reply.

The “problem” that I refer to is that employment-related earnings seem to be being deducted from my LTD at the dollar-for-dollar rate almost immediately, rather than the offset that existed the last time that I had obtained part-time employment, when a certain portion of the earnings were offset at 50-cents/dollar; I believe it was approx. the first $1000 of earnings were offset in this manner before they were offset dollar-for-dollar.

This change (error) seems to have come into effect with the implementation of Bill C-55 in 2012, and it seems to be related to the way in which the deemed-salary is calculated and how the increase to that deemed-salary was added in; it was previously explained to me that the increase to the deemed-salary from $2000/month to $2700/month was treated as an enhancement, but that the manner in which the enhancement was applied, it effectively took the place of the previously allowed part-time earnings 50-cent-offset.

I raised this issue with [Case-Manager] back in 2012 when I first identified the problem (having received an retroactive payment to cover the change in the deemed-salary that was much smaller than estimated, and subsequently having my part-time earnings applied in the manner identified above), and she tried to escalate it for resolution then, but the only answers I got back at that time were that everyone was too busy handling the SISIP Clawback Class-Action.  Well, that shouldn’t be taking up everyone’s time anymore, so seeing as how I’m still having my part-time earnings deducted dollar-for-dollar, contrary to the original intent of the SISIP LTD program, I think it’s time that someone look closely at this error.

I’m certain [Case-Manager] can help you understand what exactly is going on here.
 
Regards,
 
Walter Callaghan

________________________________________
From: <SISIP Supervisor>
Sent: 23-Dec-13 11:18 AM
To: Walter Callaghan
Cc: <Case-Manager>
Subject: RE: Question on LTD deductions
 
Good day Walter.   

Can I please clarify what you are referring to when you use the word "problem"?  Are you are referring to the deemed monthly salary used to calculate your Long Term Disability benefit (ie. that your benefits were approved based on your period of service during a Class B contract of <180 days)?  Or are you referring to another aspect of the calculation of your benefit?  You refer to bill C-55 and I am unsure how you are applying this in your situation.

You make references below to "LTD that was deducted" in error.  Can you please clarify exactly what you feel was deducted in error or which part of your benefit calculation you would like clarified?  I will then be in a better position to respond to your inquiry and direct you to the appropriate sections of the SISIP policy that explain the calculation of your monthly benefit.

Thank you in advance for your time and clarification.

xxxxxxx
Supervisor - Disability/Life Claims, SISIP Services
Chef de section - Règlements invalidité/vie, Services du RARM
2727 Joseph Howe Drive | Halifax, Nova Scotia B3J 2X5

________________________________________

From:        Walter Callaghan
To:        <Case-Manager>,
Cc:        <SISIP Supervisor>
Date:        23-12-13 12:09 PM
Subject:        RE: Question on LTD deductions
<Case-Manager>,
 
Thanks for understanding.
And yes, please, I would like my problem escalated to whatever level can fix it, or provide an explanation why they won’t be correcting these errors.
 
Regards,
 
Walter

________________________________________

From: <Case-Manager>
Sent: 17-Dec-13 8:38 AM
To: Walter Callaghan
Cc: <SISIP Supervisor>
Subject: RE: Question on LTD deductions
 
Hi Walter, to the best of my knowledge there is no motion underway to make any additional changes to the SISIP plan and I hear you loud and clear on how this has impacted your LTD benefit.   

I have cc'd xxxxxx, Supervisor, LTD Unit you, if you wish to address your concerns with him.

Regards,

<Case-Manager> | Disability Specialist, SISIP Services
2727 Joseph Howe Drive | Halifax, Nova Scotia B3J 2X5

________________________________________

From:        Walter Callaghan
To:        <Case-Manager>
Date:        17-12-13 04:12 AM
Subject:        RE: Question on LTD deductions
<Case-Manager>,

Please tell me that this problem, which I initially raised back when C-55 first came into effect, is finally going to be fixed, and that the portion of my LTD that was deducted in error will be reimbursed.  Please tell me that this is finally in the works.  Because otherwise, we have a serious problem (not you and me, but SISIP and me – and me being the wider veterans community, which are already very aware that this problem may exist).

Sorry,

Walter.

________________________________________

From: <Case-Manager>
Sent: 16-Dec-13 2:54 PM
To: Walter Callaghan
Subject: Re: Question on LTD deductions
             
Hi Walter, after reviewing your numbers I see what's happening.

After your benefit was adjusted in 2012 for the enhancement, it has affected the earnings formula.  Unfortunately, now when we enter earnings the formula offsets dollar for dollar from the get go.  Essentially your LTD benefit structure now has you earning more money on claim than when you were employed in the CF. Once that situation happens with any file, the earrings offset becomes $ for $.

Regards,

<Case-Manager> | Disability Specialist, SISIP Services
2727 Joseph Howe Drive | Halifax, Nova Scotia B3J 2X5

________________________________________

From:        Walter Callaghan 
To:        <my case manager at the time>
Date:        16-12-13 11:13 AM
Subject:        Question on LTD deductions
<Case-Manager>,

I’m curious how my income from the University of Toronto, as reported in my last two emails, is being deducted from my SISIP LTD.  It seems to be much higher than the 50-cents per dollar that was deducted in 2011-2012 when I last worked as a teaching assistant.

Regards,

Walter

Callaghan

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Re: SISIP, C-55, and discouraging Veterans from returning to work
« Reply #2 on: May 13, 2014, 01:30:00 PM »
And here is my rebuttal to Nicholson's empty rhetoric and factual errors:

Minister Nicholson,

Could you please inform me what current litigation that would be that you refer to in your response, and which is preventing you from commenting further?  I'm familiar with most of the legal actions that veterans have had to initiate against the current government, but I'm at a loss to determine which one would prevent you from speaking to the issues at hand in my complaint over how p/t earnings have been offset from my SISIP LTD.

Further, I think that you will find that C-55 did indeed affect SISIP-LTD, as well as VAC-ELB.  The correspondence from certain staff within SISIP, which was forwarded to you on my behalf by MP Stoffer, clearly explains how the increase in base calculation of pay, and the reduction/removal of potential earnings offset was directly related to the implementation of C-55 in 2012.

Sir, if you or your government truly want to thank those of us who served, and view our health and welfare as being of the utmost importance, then I urge you to step up and fix these problems.  Stop the platitudes and empty rhetoric.  Actions speak much louder than words.

Militi succurrimus,

Walter Callaghan
Disabled veteran

Callaghan

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Re: SISIP, C-55, and discouraging Veterans from returning to work
« Reply #3 on: July 21, 2014, 10:28:50 AM »
Update

Minister Nicholson finally responded.
Correspondence below, starting with my response back to Nicholson.

*****

From: xxxxx
Sent: 21-Jul-14 10:24 AM
To: P-OTG.MCU@intern.mil.ca [mailto:P-OTG.MCU@intern.mil.ca]
Cc: peter.stoffer.a1@parl.gc.ca; Daniel.Wallace@mcinnescooper.com
Subject: FW: Bill C-55

Minister Nicholson,

There is a very simple solution to this problem: treat all veterans the same.

Veterans medically-released after April 2012 do NOT have their earnings-offset capability affected in this way (they still have a potential for earnings-offset at 50/100, and a much higher offset-limit as well).  It is only those of us who were already on SISIP-LTD when the changes brought forward by Bill C-55 came into effect who have seemingly lost our potential earnings-offset.  Why is there a two-tiered system of benefits based on date-of-release?

Further, my questions and concerns were not specifically about COLA, and it confused me how you and your staff were tying my concerns into the Manuge/SISIP class-action on this matter.  Now that I've read the text of that final settlement, I am shocked and even more concerned that your government sought a release on issues that were beyond the specifics of that case, namely how the base amount of LTD was calculated and how earnings-offsets were handled.  I've been advised by the lawyers at McInnes-Cooper that the specifics of the release-clause mean that I must now rely solely on political will to correct a mistake that is seeing anything from $500-$1000 (or potentially far more) being clawed back from my earnings.

So do you, Minister Nicholson, have the personal and political will to affect the change needed to correct this error?

ONE VETERAN, ONE STANDARD

Walter Callaghan


-----Original Message-----
From: P-OTG.MCU@intern.mil.ca [mailto:P-OTG.MCU@intern.mil.ca]
Sent: 21-Jul-14 9:15 AM
To: xxxxx
Cc: peter.stoffer.a1@parl.gc.ca
Subject: FW: Bill C-55

Dear Mr. Callaghan:

Your further correspondence concerning the calculation of benefits under the Service Income Security Insurance Plan (SISIP) Long Term Disability (LTD) plan was forwarded to me by Member of Parliament Peter Stoffer. Thank you for writing.

In my previous correspondence I was unable to comment on the Cost of Living Allowance (COLA) and the calculation of the LTD benefit as it applies to those who qualify under the SISIP Vocational Rehabilitation Program (VRP) as they were being reviewed as part of the class action settlement at the time of Mr. Stoffer's letter of 6 February 2014. The purpose of the COLA review was to determine if it had been applied properly. I am pleased to report that this issue has since been addressed, and a proposed settlement has been negotiated as identified in the Preliminary Notice of Proposed Settlement of the Class Action Regarding the Calculation of Cost of Living Allowance Increases to SISIP LTD benefits, available at www.sisip.com.

With respect to the COLA, all SISIP LTD benefits are adjusted annually to take into account cost-of- living increases in order to minimize the effects of inflation by applying the consumer price index (CPI). Applying the CPI to a benefit is standard practice as the CPI is widely used as a measure of inflation. Some examples of where the COLA is applied in this manner are the Veterans Affairs Canada (VAC) Earnings Loss Benefit (ELB) and the Canada Pension Plan.

I have been advised that the COLA is applied to the SISIP LTD benefit before offsets, if any, are applied. That is, for a deemed salary of $2,700, the LTD benefit (75%) of $2,025 would be increased by the CPI, and then the formula would be applied. The application of the COLA to the LTD benefit in this manner should not reduce total income; if anything, the total take-home income consisting of the SISIP benefit and the earned employment income would increase by virtue of the CPI increase to the SISIP benefit. Without this practice, total income would not keep up with inflation.

The SISIP VRP formula remains unchanged following the review related to the class action. The SISIP VRP offset is applied at a rate of 50% of income until total income from all sources equals 100% of the salary or the reservist's deemed salary, then the offset is dollar for dollar. This 50% offset is meant, when and if a claimant's condition permits, to provide an incentive to earn employment income that could bring the claimant up to 100% of his or her military salary or deemed salary. This formula is similarly applied in the VAC ELB while a veteran is participating in a VAC rehabilitation plan.

With respect to the deemed salary increase, Bill C-55 (Enhanced New Veterans Charter) enabled the increase of the minimum VAC ELB for Regular Force and Reserve Force members on full-time service from senior private to basic corporal, and to increase the deemed salary from $2,000 per month to $2,700 per month for part-time reservists. Since VAC ELB and SISIP LTD are complementary plans, SISIP sought and received Treasury Board approval for the same increases.

It is correct that the increase removed the VRP 50% offset for employment income for claimants, such as you. Today, as a result of the increase in the deemed salary, you receive $2,025 per month as a guaranteed sum, and any income earned is offset dollar for dollar. So while any employment income is entirely offset, after the increase in the deemed salary you are guaranteed a higher total income than you would have received prior to the change. Had this increase not occurred, it would have taken between 15 and 16 years to reach an LTD benefit of over $2,025 based on a maximum 2% COLA per year.

As an unintended consequence of this increase in deemed salary (and consequent increase in the LTD benefit), it appears that the incentive to work has been reduced for members in your situation. I agree that this is not an ideal situation, and we will look into options on how to address this issue.

I have shared your concerns with SISIP personnel, and I am advised that they will be taken into consideration during the review of the veterans benefits policies that is currently under way.

Please be assured that should there be any change to the SISIP LTD benefits, it will be communicated to all LTD claimants by the Insurer in addition to the usual public media announcements.

Thank you for writing. I trust that I have been able to provide some clarification in this matter.

Yours truly,

Hon. Rob Nicholson, PC, QC, MP
Minister of National Defence

c.c. Mr. Peter Stoffer, MP