Miscalculation of Disability Pensions Class Action

CASE NAME
White et al. v His Majesty the King

COURT
Federal Court, File No. T-512-24

DATE FILED
Fresh As Amended Consolidated Statement of Claim, February 5, 2025

ABOUT THIS ACTION

Each year, as required by the Pension Act, Veterans Affairs Canada (“VAC”) calculates annual increases in monthly disability benefits to account for inflation. Through this proposed class proceeding, counsel has identified several errors in VAC’s calculations.

The proposed class is defined as:

All Canadian Armed Forces [CAF] and Royal Canadian Mounted Police [RCMP] members and veterans, and their spouses, common-law partners, dependents, survivors, orphans, and any other individuals, including eligible estates of all such persons, who received, at any time between January 1, 2024 and the present – disability pensions and other benefits from Veterans Affairs Canada that were affected by the annual adjustment of the basic pension under section 75 of the Pension Act including, but not limited to, the awards and benefits listed below:

• Pension Act pension for disability;
• Pension Act pension for death;
• Pension Act attendance allowance;
• Pension Act allowance for wear and tear of clothing or for specially made apparel;
• Pension Act exceptional incapacity allowance;
• Veterans clothing allowance;
• Civilian War-related Benefits Act war pensions and allowances for salt water fishers, overseas headquarters staff, air raid precautions workers, and injury for remedial treatment of various persons and voluntary aid detachment (World War II);
• Flying Accidents Compensation Regulations relating to compensation for flying accidents; and
• RCMP Disability Benefits awarded in accordance with the Pension Act.

Members of the proposed class are entitled to benefits, including monthly disability pensions and awards under s. 21 of the Pension Act and s. 32 of the Royal Canadian Mounted Police Superannuation Act, which incorporates and relies on the disability pension scheme provided for under the Pension Act.

Part V of the Pension Act provides a statutory formula for annual adjustments to ensure that basic monthly disability pensions and awards payable under the Pension Act and related benefits payable under federal legislation (collectively, “Disability Benefits”) keep pace with the cost of living and price inflation. Section 78 of the Pension Act applies the annual adjustment provisions in Part V of the Pension Act to monthly disability pensions payable to RCMP members and former member of the Force under the Royal Canadian Mounted Police Superannuation Act.

The annual adjustments are based on calculations that are to take into account:

(a) annual increases in the Canadian Consumer Price Index (“CPI”), and/or;

(b) average wages of certain categories of federal public sector employees minus income tax for a single person calculated in the province with the lowest combined provincial and federal income tax rate (“Wage Rate”).

The proposed class proceeding alleges that VAC miscalculated the annual adjustments to Disability Benefits under s. 75 of the Pension Act in the following respects:

(a) VAC incorrectly used Ontario as the province with the lowest income tax rate for the Wage Rate calculation when, during the same period, Nunavut had a lower income tax rate that should have been used (because s. 35 of the Interpretation Act defines “province” in every enactment to include Nunavut); and

(b) VAC incorrectly failed to include the Canada Employment Amount in its calculation as required.

As a result, there was a cascading effect of errors that resulted in underpayment of disability pensions to the proposed class.

In addition, annual adjustments to disability pensions and disability awards are relied upon in related federal legislation that also provide benefits to the proposed class. As such, the calculation errors for annual adjustment rates for disability pensions and awards were repeated for every benefit payable under federal legislation that is based on the annual adjustments to disability pensions under the Pension Act.

This proposed class proceeding follows – and carries on from – the class proceeding in Manuge v His Majesty the King (Federal Court Action No. T-119-19), which was certified by the Federal Court in 2020 and for which a $817.3 million settlement was approved in 2024. Despite that settlement, the Government of Canada has not changed its practice and continues to make the same benefit calculation errors. The Manuge settlement provided compensation to affected individuals from January 1, 2003 to December 31, 2023. This proposed class proceeding now seeks compensation for subsequent benefit underpayments which occurred from January 1, 2024 onwards.

Counsel in the proposed class proceeding believe that hundreds of thousands of veterans and their surviving family members have been, and continue to be, underpaid each month. The proposed class, a vulnerable group entitled to Disability Benefits, has suffered and will continue to suffer harm as a result of the VAC’s errors, omissions, and mismanagement in the calculation of annual adjustments, which are ongoing. Counsel in this proposed class proceeding further hopes that this proposed class proceeding has the effect of causing the Government of Canada to fix this practice going forward so that disabled veterans will not keep getting short-changed.

THE DEFENDANT

His Majesty the King is named as the defendant pursuant to s. 3 of the Crown Liability and Proceedings Act as a representative of the Government of Canada, the Minister of Veterans Affairs, and the Minister of Public Safety and Emergency Preparedness.

The Minister of Veterans Affairs is responsible for administering the Pension Act, the Veterans Well-being Act, and related federal legislation, and determining the amount of Disability Benefits payable to current members of the CAF, CAF veterans, and their survivors and dependents.

The Minister of Public Safety and Emergency Preparedness is charged with administering the Royal Canadian Mounted Police Superannuation Act, which provides that the amount of monthly disability pension payable to members of the RCMP, RCMP veterans, and their survivors and dependants shall be determined in accordance with the applicable provisions of the Pension Act.

Under a Memorandum of Understanding executed 5 September 2002 between VAC and the RCMP, VAC is responsible for the adjudication, assessment, payment and administration of disability awards and benefits.

BACKGROUND TO THE PROPOSED CLASS PROCEEDING

This proposed class proceeding follows – and carries on from – a previous class proceeding, commenced in January 2019, which settled for $817.3 million:

Manuge v His Majesty the King (Federal Court File No. T-119-19).

The Manuge class proceeding also sought compensation for VAC calculation errors on behalf of current and former members of the CAF and RCMP (and their surviving family members) – but only for the period from January 1, 2003 to December 31, 2023.

In contrast, this proposed class proceeding – White et al. v His Majesty the King (Federal Court, File No. T-512-24) – is for the period from January 1, 2024 onwards.

Class members in the Manuge class proceeding who received disability pensions directly from VAC automatically received settlement payments from VAC by direct deposit or cheque. All other class members in Manuge were required to submit a claim by March 19, 2025. The claims period for the Manuge settlement is now closed. The claims administrator is now in the process of reviewing all submitted claims and has until March 19, 2026 to issue all payments.

Participation in the current proposed class proceeding (White et al. v His Majesty the King) will NOT affect claims for reimbursement of miscalculated benefits for the period covered by the Manuge settlement – i.e., January 1, 2003 to December 31, 2023.

QUICK FACTS

• The Pension Act provides various disability benefits to recognize and fulfill the “obligation of the people and Government of Canada to provide compensation to those members of the forces who have been disabled or have died as a result of military service, and to their dependents.”
• The Pension Act provides for an annual adjustment to disability benefits to account for the impact of inflation.
• A class proceeding, Manuge et al. v His Majesty the King, commenced in January 2019 sought compensation for Class Members for VAC calculation errors. A settlement of this matter was approved by the Federal Court of Canada effective March 19, 2024. Claims under the Manuge settlement are currently being reviewed. More information about the Manuge class action and the resulting settlement can be found on the Administrator’s website:
  • English: https://veteranspensionsettlement.kpmg.ca/
  • French: https://veteranspensionreglement.kpmg.ca/fr
• This current proposed class proceeding (White et al. v His Majesty the King) addresses VAC’s ongoing calculation errors that have resulted in the underpayment of disability benefits entitlements for class members covered by the Manuge settlement from January 1, 2024 onward as well as under payments to other individuals who may have become entitled to disability benefits on or after January 1, 2024.
• If you are a member or veteran of the CAF or the RCMP or a spouse, common-law partner, dependant, survivor, orphan of such persons and you received, at any time between January 1, 2024 and the present, disability pensions and other benefits from VAC that were affected by the annual adjustment of the basic pension under s. 75 of the Pension Act, you may be a class member in this proposed class proceeding. Eligible estates of persons who received these disability benefits may also be class members.