The meaning of a single word
could make a big difference in
the pocketbooks of about 6,500
disabled veterans in a class-action lawsuit against the federal
government.
In mid-November, Federal
Court Justice Robert Barnes
reserved his decision in Dennis
Manuge v. Her Majesty the Queen
following a two-day hearing on a
motion to determine questions
of law over the definition of
“income” regarding disability
group insurance for Canadian
Forces veterans.
The federal government’s Service Income Security Insurance
Plan (SISIP) Long Term Disability (LTD) program provides a
benefit equal to 75 per cent of
pre-release salary, “less applicable reductions,” which include
veterans’ disability pensions
under the Pension Act and paid to
Canadian Forces members with
service-attributable injuries.
The class action argues that
the government cannot lawfully
deduct disabled veterans’ disability pensions from their SISIP
LTD benefits and that doing so
infringes their equality rights
under section 15(1) of the Charter.
“The Pension Act disability
pension is not income or income
replacement and therefore is not
a ‘monthly income benefit,’ ”
states the plaintiff’s motion. “The
Pension Act disability pension is
a non-indemnity payment
designed to provide compensa-
tion for pain and suffering and to
recognize the service and sacri-
fice of the members of the Can-
adian Forces.”
Manuge, the representative
plaintiff, served as a mechanic
from 1994 to the end of 2003,
when he was released for medical
reasons after falling off a tank and
breaking a bone in his back at
Canadian Forces Base Petawawa
in Ontario in 2002, prior to serv-
ing a few months in Bosnia.
Between 2003 and 2005,
Manuge received SISIP LTD
benefits, which were reduced by
about $10,000 to offset the
monthly veterans’ disability pension he also received.
In its memorandum of fact
and law, the Crown argues that,
since the terms of the SISIP
policy “expressly provide” for the
reduction of LTD benefits by the
amount of his disability pension
benefits, the action “advances an
untenable interpretation” of the
policy, “which would render
essential terms meaningless and
create absurdities.”
Under the Pension Act, dis-
ability pensions are considered
“monthly income benefits” and
SISIP LTD benefits paid are a
“top-up” of a disabled veteran’s
Vancouver lawyer Donald Sorochan of Miller Thomson is mounting a constitutional challenge on behalf of approximately
230 veterans disabled in Afghanistan.
income, said Justice Canada
lawyer Lori Rasmussen, who
argued the Crown’s case before
the Federal Court in Halifax.
“The long-term disability policy
is designed to supplement other
money they might receive, such
as pension benefits paid out by
Veterans Affairs.”
In the statement of claim, the
plaintiff characterizes the reduc-
tion of SISIP LTD benefits as a
“clawback,” and also alleges
breach of fiduciary duties,
unjust enrichment, breach of
public duty and bad faith by the
federal government.
An estimated 6,500 veterans
had about $300-million of their
disability benefits reduced,
according to Yves Côté, the former ombudsman for the Department of National Defence and
the Canadian Forces.
Peter Driscoll, a litigator
with McInnes Cooper in Halifax
who serves as lead counsel for
the veterans in their class action
suit, said in an interview that
some of the more severely disabled veterans have had hundreds of thousands of dollars
deducted from their benefits
dating to 1969, when the SISIP
LTD policy was established. (At
present, the program is governed by Treasury Board,
administered by SISIP Financial Services and insured by
Manulife Financial).
“The most seriously disabled
veterans have a number of chal-
lenges—they’ve lost their job
and have an increased disadvan-
tage to blend back into society —
and yet they don’t have the same
rights as, say, an off-duty Forces
member injured in a car accident
who would receive compensation
for pain and suffering and
income replacement.”
In 2006, the House of Com-
mons passed an NDP non-bind-
ing motion introduced by the
party’s Veterans Affairs critic
Peter Stoffer that, in part, called
for an end to the “unfair” reduc-
tion of disability pension benefits
for SISIP policyholders.
The most seriously disabled veterans have a
number of challenges — they’ve lost their job and
have an increased disadvantage to blend back into
society — and yet they don’t have the same rights
as, say, an off-duty Forces member injured in a car
accident who would receive compensation for
pain and suffering and income replacement.
“
Peter Driscoll, McInnes Cooper
ensure that members who are
medically released because of
service-related illness or injury
receive a reasonable amount of
income while they are unable to
work,” he wrote in an update on
SISIP in 2007.
That year, Manuge launched
the lawsuit, which the Federal
Court certified the following year.
However, the Crown chal-
lenged whether the plaintiff was
entitled to proceed by way of
leave to appeal to the Supreme
Court of Canada again—despite
the veterans asking the govern-
ment to consider resolving the
issue by mediation or arbitration
overseen by a retired judge.
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