Veterans with Pensions Need Help

Approximately 7,600 Canadian Armed Forces personnel leave the Canadian Armed Forces every year with significant tax-free resources for their future. This number includes about 1,000 personnel released for medical reasons beyond their control. They could use your help.

For many reasons, the transition to civilian life can be difficult, but advisors can play an important role in helping to make the financial aspects easier. One way to do so is by assisting with tax-efficient investment and retirement planning. For example, tax-advantaged retirement savings vehicles—like TFSAs, RRSPs and RDSPs—can be offered as a way to leverage some of the tax-free supports available to veterans. Some of the income sources available are substantial too, as described below.

Awards available to help veterans with medical issues:

• A tax-free, lump-sum disability award of up to $360,000 for 2017
• A tax-free disability pension of up to $2,733.47 per month for a single veteran without dependent children; veterans with families are eligible for an additional $683.37 per month for a spouse and up to $355.35 for the first child
• A benefit of up to $1,799.87 per month to compensate permanently and severely impaired veterans for the lack of career opportunities
• A benefit of up to $1,103.06 per month for permanently and severely impaired veterans who cannot find suitable, gainful employment
• Post-release income supplements for veterans undergoing a rehabilitation process or who are totally and permanently incapacitated, with a minimum salary currently set at $44,496
• A tax-free payment of up to $1,559.45 per month for a single disabled veteran without dependent children who has completed a rehabilitation process and who is able to work, but has not been able to find a job or has a low-paying job
• Vocational support and career counseling programs providing vocational rehabilitation and training
• Support for disabled and aging veterans residing in long-term care facilities
• Financial support to pay for funeral and burial services, which has been expanded in the 2016 budget

In addition, the federal government has promised increased employment opportunities in the federal public service for medically released Canadian Armed Forces personnel, by creating a statutory hiring priority in the Public Service Employment Act and by extending the duration of priority entitlements from two to five years for all medically released Canadian Armed Forces personnel.

As well, the Public Service Employment Act is to give preference to eligible veterans in external public service job competitions and to allow Canadian Armed Forces personnel with at least three years of military service to participate in internal public service job competitions.

Professionals in the tax and financial services whose clients or prospective clients include recently discharged Canadian Armed Forces members can provide much-needed guidance in navigating tax and financial planning priorities. This is a great way to build a unique niche and extend an important new value proposition for these special Canadians. Be sure clients who need you can find you by becoming a designated MFA-Retirement and Estate Services Specialist.

ⁱAccording to the February 11, 2014 federal budget.

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