On Remembrance Day and every day, we honor the courage and sacrifice of all the men and women who have served by recognizing their willingly endured hardships and fears.
The financial, physical, and mental well-being of qualifying Veterans and their families is Canada’s responsibility. It guarantees that they receive the support, compassion, and respect that they are entitled to. Part of Canada’s emergence as an independent co
untry with a distinct identity stems from its achievements during wartime. It is our responsibility to aid those whose bravery has given us this heritage and contributed to our nation’s development. Veterans Affairs Canada is in charge of creating and implementing programs and services for our veterans.
In this article, we will touch on some Canadian tax and financial benefits available for Veterans:
Tax relief to members of the Canadian Armed Forces (CAF) and police officers
The Government of Canada provides tax relief to members of the Canadian Armed Forces (CAF) and police officers deployed on international high and moderate-risk operational missions. This tax relief recognizes the special contribution that CAF members and police officers make to international peace and stability while serving their country abroad.
Eligible CAF members and police officers may claim a deduction against taxable income in respect of income earned while deployed on such missions. The maximum amount that an individual may deduct in a taxation year cannot exceed the highest level of pay earned by a non-commissioned member of the CAF.
The Government proposes to extend this tax deduction automatically to all CAF members and police officers for the period over which they are deployed on an international operational mission, regardless of the risk score associated with the mission.
In addition, the Government proposes to increase the maximum amount that an individual may deduct in a taxation year to the highest level of pay earned by a Lieutenant-Colonel of the CAF.
Disability Tax Credit
Veterans are entitled to earn certain disability pensions and allowances tax-free along with disability tax credit
Qualifying for the Disability Tax Credit is a simple process, requiring the individual to file CRA Form T2201-Disability Tax Credit Certificate. This form needs to be completed by a certified medical practitioner. Basically, the form must state that the individual is suffering from a severe medical condition that will affect the rest of the person’s life. Upon completion, Form T2201 is to be submitted to the CRA.
The credit can be claimed for all eligible years, up to 10 years. The request is made online or by filing the form T1ADJ. In this case, as well, the person is required to provide a certificate from a certified medical practitioner stating the time frame of the individual’s disability.
Earnings Loss Benefit (ELB)
The Earnings Loss Benefit Program recognizes the economic impact a military career-ending or service-related disability may have on a Canadian Armed Forces Veterans ability to earn income following release from the Canadian Armed Forces. To meet their basic needs, eligible CAF Veterans participating in Veterans Affairs Canada’s Rehabilitation Program are provided with temporary income replacement in the form of a monthly allowance so that a participant’s income does not fall below 90% of gross pre-release military salary.
Career Impact Allowance (CIA)
The Career Impact Allowance Program recognizes the economic impact on employment potential and career advancement caused by severe and permanent service-related disabilities. The program ensures that eligible Canadian Armed Forces (CAF) Veterans with severe permanent impairments have an income sufficient to meet basic needs. A monthly allowance is payable to CAF Veterans who received a Disability Award for physical or mental health problems that are creating a permanent and severe impairment and for which rehabilitation services have been approved.
Supplementary Retirement Benefit (SRB) Program
The Supplementary Retirement Benefit Program compensates eligible Canadian Armed Forces (CAF) Veterans for lost opportunities to contribute to retirement pensions because they are unable to work following their release from the Canadian Armed Forces. Veterans must have been assessed as totally and permanently incapacitated during their participation in Veterans Affairs Canada’s Rehabilitation Program and eligible for extended Earnings Loss benefits.
The benefit, a lump-sum payment equal to 2% of the total amount of Earnings Loss benefits that were paid to the Veteran before income offsets, is generally paid when the Veteran reaches the age of 65. Survivors of Veterans who die as a result of a service-related injury or disease are also eligible for this benefit, payable after the Veteran would have reached the age of 65 years.
Retirement Income Security Benefit (RISB)
The Retirement Income Security Benefit provides eligible Canadian Armed Forces (CAF) Veterans and survivors with life-long financial stability for moderately to severely disabled individuals through a monthly income security payment beginning at age 65. This benefit tops up a Veteran’s total annual income to at least 70% of what he or she received in financial benefits from Veterans Affairs Canada.
Canadian Forces Income Support (CFIS)
The Canadian Forces Income Support is a tax-free monthly benefit. It helps low-income CAF Veterans who no longer qualify for the Earnings Loss Benefit, after participating in the Rehabilitation program.
For this program, VAC measures your household income according to the Statistics Canada Formula. This formula takes any taxable income you are currently earning or any government benefits you receive into consideration.
War Veterans Allowance (WVA) Program
The War Veterans Allowance Program is a form of financial assistance available to eligible Veterans, Merchant Navy Veterans, qualified civilians, and their survivors, dependents, and orphans. In recognition of war service, qualified persons are provided with a regular, monthly income to meet basic needs. Eligibility for War Veterans Allowance is determined by the wartime service of a Veteran or qualified civilian, the age or health, family income, and residency. As well, as the surviving spouse, a surviving common-law partner or orphan may qualify for War Veterans Allowance.
If you find this article helpful, stay tuned to our future release and if you have any tax-related queries, need assistance with tax planning, or filing your tax returns please contact IDM Professional Corporation CPA.
