Judge ‘unreservedly rejects’ clawbacks of disability benefits for veterans

A Federal Court ruling that Ottawa should stop clawing back disability benefits from former Canadian Forces members is a key legal victory for some of the country’s most injured veterans, their lawyers say.

HALIFAX — A Federal Court ruling that Ottawa should stop clawing back disability benefits from former Canadian Forces members is a key legal victory for some of the country’s most injured veterans, their lawyers say.

The plaintiffs, who launched a class-action lawsuit against the federal government, argued last November that the benefits were being unjustly clawed back because the payments were unfairly deemed as income.

The lawyers said that veterans’ long-term disability benefits were being reduced by the amount of their disability pensions, with some of the most gravely injured not receiving any of their pension.

In a decision released Tuesday, Judge Robert Barnes agreed that the monthly Veterans Affairs pensions aren’t “income benefits,” and therefore can’t be used to offset money they are owed.

“The practical consequences of the claimed offset is to substantially reduce or to extinguish the long-term disability coverage promised to members,” Barnes wrote in his decision.

He added this would create “a particularly harsh effect on the most seriously disabled Canadian Forces members who have been released from active service.”

“That is an outcome that could not reasonably have been intended and I reject it unreservedly.”

Peter Driscoll, a lawyer for the veterans, said if Ottawa doesn’t appeal then the decision could mean millions of dollars in retroactive compensation for the former members of the forces.

“We’re overjoyed,” Driscoll said in a phone interview. “We’re pleased the court has found the clawbacks we’ve complained of are unlawful.”

The federal government did not return an immediate request for comment.

Some veterans say they are losing upwards of $3,500 a month in clawbacks. Their lawyers have said thousands of veterans are being subjected to the same practice, putting the cost of stopping it and reimbursing veterans somewhere between $270 million and $320 million.

Driscoll said his clients are expecting the money to be repaid.

“We’re calling on the government of Canada to honour their ethical, moral and now legal obligation to immediately end the clawback,” he said.

Dennis Manuge, one of the former military personnel in the lawsuit, said he hopes negotiations for compensation begin soon.

“There is some more legalese that has to play out, but this puts the ball in our court and is a way for us to force the federal government to settle this,” he said.

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