Disabled soldiers angry over lump-sum payments

by Sean Bruyea-The Toronto Star-August 26, 2010

The indisputable lightning rod for the cumulative frustration of disabled Canadian Forces veterans and their families has become the replacement of the lifetime monthly pension for military injuries with a one-time lump-sum payment.

Among the rapidly growing population of more than 680,000 serving and veteran Canadian Forces personnel, approximately 60,000 soldiers suffer lifelong disabling injuries. For more than 80 years prior to April 2006, anyone applying for compensation related to an injury occurring in military service was awarded a lifelong monthly disability pension. After that time, the monthly pension was replaced by a one-time lump sum of a maximum of $276,089.

I was the first to make public the shortfalls of the lump-sum program in May 2005. Since then, the outpouring of anger among disabled soldiers, veterans and their families has risen to a crescendo of angst and betrayal voiced in the Aug. 17 news conference held by outgoing veterans’ ombudsman Pat Stogran.

Yet this anger has been ignored in the senior bureaucracy and for many in Parliament. In spite of unanimous demands outside government to drastically revamp the lump-sum program, the parliamentary committee on veterans affairs “recommended” that the very bureaucrats fighting tooth and nail against rescinding the lump sum come back with a “plan” more acceptable to the needs of the increasing numbers of injured Canadian Forces members and veterans.

Giving the lump-sum “hen house” back to the bureaucratic “foxes” will inevitably lead to the same unacceptable situation that created the lump-sum problem in the first place. In fact, Veterans Affairs Minister Jean Pierre Blackburn indicates the bureaucracy has already decided on the plan. Recent hints from the minister are that the lump sum will be spread out over multiple payments. The justification for this? A poll conducted by the bureaucracy, which concluded that “lump-sum award is the preferred option for 69 per cent of those veterans who have received this benefit.”

How could veterans prefer a one-time payment of a maximum of $276,089 instead of up to $29,000 or more per year tax-free for life plus amounts for children and spouses? The lump sum does not make provisions for children and spouses.

The truth is that the minister’s department didn’t compare the lump sum to the previous lifelong pensions at all. Instead, the so-called survey asked, “If you had a choice, would you prefer to receive your lump-sum payment with the same dollar amount as a single payment or as payments over time?”

Double amputee Cpl. Mark Fuchko was contacted for the survey. Fuchko was struck by an IED in Afghanistan in 2008 on his second tour:

“I was extremely disappointed with the fact that (the lifelong) pensions were not mentioned in the poll . . . of course I said I would want the lump sum, because I could earn interest on it. I’m sure most vets questioned responded the same way. The government, however, is using this to support its position that vets do not want pensions.”

Neither did the survey solicit opinions on paying out annual inflationary increases to prior lump-sum recipients, something that the monthly pension justly accommodates. And the Veterans Affairs survey included less than 10 per cent of those who received the lump sum while neglecting to ask any of the more than 100,000 disabled soldiers who are receiving the monthly pensions whether they would swap their lifelong payments for a one-time lump sum.

Other like-minded nations such as the United Kingdom provide both tax-free pensions and a lump sum of up to £570,000 or $929,000 at today’s exchange rate. Like the lump sum in Canada, these are maximum amounts. The average paid out to 16,734 Canadian soldiers and veterans since 2006 has been $38,843, barely enough for a simple modification of an entire house for wheelchair accessibility.

The parliamentary committee report redeems itself in many other areas: “under the most reasonable decision that a young veteran could possibly make, the (lump-sum) disability award would represent approximately one-quarter of what would have been paid out as pension.” Independent studies with insurance companies place that fraction as low as one-fifth or one-sixth, which is an equivalent lump sum of up to $1.5 million, more in keeping with court settlements for total and complete disability.

The minister is forced to defend the untenably bad decisions made by the senior bureaucracy in providing inadequate and inaccessible programs surrounding the lump sum. He offers those collecting the lump sum a one-time amount of up to $500 in aid for financial planning. Anyone who has consulted a financial planner knows that fees typically run from 0.5 per cent to 2.5 per cent annually; the smaller the portfolio, the higher the percentage. Is it any wonder that only 1 per cent of lump-sum recipients have availed themselves of the service?

Mark Fuchko sums up the lump-sum survey appropriately: “The question on the survey about ‘payments over time vs. lump sum’ is a false representation.” This is just a small part of the “deceptive” bureaucracy against which the veterans’ ombudsman has been railing.

Like the many non-existent or unfairly administered programs neglecting our rapidly growing number of injured Canadian Forces members over the past five decades, the lump sum and its survey are disingenuous and mean-spirited. It is time that the reigns of change were taken from the bureaucracy and placed in the hands of a combined panel of parliamentarians as well as veteran and medical experts. Veterans Affairs and Treasury Board senior managers never should have been given the authority to make decisions on behalf of Canadians for the veteran population. Our brave veterans have sacrificed much for Canada and Canadians, not for bureaucrats.

Sean Bruyea is a retired Canadian Forces intelligence officer, freelance journalist and longtime advocate for the rights of disabled veterans and their families.