ABOUT
What is the claim about?
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 by the Court in 2024.
Annual adjustment provisions under Part V of the Pension Act require that the basic pension amounts listed in Schedule I be adjusted annually based on the statutory formula in section 75 of the Pension Act.
Annual adjustments ensure that basic monthly disability pensions and awards keep pace with the cost of living and price inflation. The annual adjustments are based on calculations that take into account: (a) annual increases in the Canadian Consumer Price Index (“CPI”); and (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 plaintiffs allege that VAC miscalculated annual adjustments under section 75 of the Pension Act in each of the following respects:
(a) VAC incorrectly used Ontario as the province with the lowest income tax rate for the Wage Rate calculation. During the same period, however, Nunavut had a lower income tax rate that should have been used instead of Ontario rates. Section 34 of the Interpretation Act defines “province” in every enactment to include Nunavut.
(b) VAC incorrectly failed to include the Canada Employment Amount in its calculation of the “income tax for the single person” of a member of the federal public administration for the purpose of the Wage Rate calculation.
Despite the Manuge class action – which made these same allegations, which was then settled – 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 as a result of the errors which occurred from January 1, 2024 onwards.
In order to determine the basic pension effective January 1, 2024, VAC applied the increase in CPI to the basic pension effective in 2023. However, the basic pension in 2023 was miscalculated and lower than it should have been due to VAC’s calculation errors. VAC most recently applied the Wage Rate to determine the basic pension in 2018, and VAC’s errors meant that it underpaid the basic pension for that year. Therefore, in subsequent years, VAC applied the CPI rate to a lower basic pension from the previous year than it should have in accordance with the statute.
Annual adjustments to disability pensions and disability awards are also relied upon in related federal legislation that provides benefits to the proposed class. The related federal legislation determines amounts payable for benefits based on the rates of annually adjusted disability pensions or disability awards VAC’s errors in calculating annual adjustment rates for disability pensions and disability awards are repeated for every benefit payable under federal legislation that is based on the annual adjustments to disability pensions under the Pension Act.
The plaintiffs allege, on their own behalf and on behalf of the proposed class, that affected individuals are entitled to compensation (as damages, restitution, equitable compensation, and/or interest) for their pension and benefits underpayments, loss of the use of those amounts, and any related loss caused by the calculation errors. Further, or in the alternative, the plaintiffs allege that they are entitled to an accounting and disgorgement of the benefits that the federal government obtained through these errors.
AFFECTED BENEFITS
- 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 Well-being Act – Clothing allowance
- Civilian War-related Benefits Act – War pensions and allowances for salt water fishers, overseas headquarters staff, air raid precautions works, and injury for remedial treatment of various persons and voluntary aid detachment (World War II)
- Flying Accidents Compensation Regulations – flying accidents compensation
- RCMP disability benefits awarded in accordance with the Pension Act
Important Documents
REGISTER TO STAY INFORMED
If you are a member or veteran of the Canadian Armed Forces or the Royal Canadian Mounted Police or a spouse, common-law partner, or dependant, survivor, or orphan of such persons and you 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 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.
Register to receive updates on the progress of this proposed class proceeding.