Ottawa rescues military disability insurance plan with $622 million bailout

Ottawa rescues military disability insurance plan with $622 million bailout
From CBC - February 15, 2018

The Liberal government is spending more than$622 million to bail out the Canadian military's long-term disability insurance plan, newly tabled federal budget documents reveal.

The enormous infusion of cash comes almost five years after the former Conservative government settled a class-action lawsuit with disgruntled veterans who were angry that their payments were being clawed back.

Supplementary budget estimates for the current fiscal year, tabled this week in the House of Commons, show the Service Income Security Insurance Plan (SISIP) is running in deficit and the federal government is "contractually obliged" to keep it afloat.

'A significantly higher number of claims'

The plan, which serves both full-time and part-time soldiers, is underfunded "due to a significantly higher number of claims, largely owing to increased awareness and recognition of post-traumatic stress disorder and mental health," says the estimates document.

In 2013, the Harper government paid out $887 million for a settlement with 7,500 former soldierswhose long-term disability income had faced clawbacks for over 35 years.

In an email, National Defence said the bailout was necessary to keep the Service Income Security Insurance Plan afloat in the face of "the continuing growth in the number of claims" over the past few years.

"This sum is required for the [Canadian Armed Forces] to continue to adequately fund its group disability plan," the department said.

Veterans Affairs is also getting an extra $177 million top-up to cover a higher-than-expected number of disability claims for ex-soldiers.

'Left out in the cold'


Continue reading at CBC »