Class Action lawsuit seeks damages for alleged VAC underpayments

This week the Class action lawsuit: Manuge v Her Majesty the Queen, opt-out period ended.

According to Veterans Affairs Canada, the class proceeding seeks damages for alleged underpayments that occurred because of errors in the calculation of annual adjustments under Section 75 of the Pension Act.

VAC Statement

Two years ago, VAC made a statement that addressed a discrepancy in disability pension adjustment rates calculation. The Veteran’s Pension Error website informs that this mistake caused reduced payments to be administered to eligible recipients of disability benefits. VAC estimated that this affected about 270,000 veterans of the Canadian Armed Forces (CAF) and Royal Canadian Mounted Police (RCMP) as well as “survivors and their estates.”

Alleged Errors

The Government of Canada has publicly acknowledged this error and corrective payments began in September 2019 and continue to be issued. However, the class action alleges that further amounts are owing to class members, including those flowing from other alleged miscalculations.

As written on the Veteran’s Pension Error website, “The Plaintiffs have learned about additional errors in VAC’s annual indexing calculations under section 75 of the Pension Act,” and allege:

VAC failed, from 2002 to the present, to calculate the Wage Rate using the province or territory with the lowest combined provincial and federal income tax rate (the Nunavut income tax rate should have been used instead of the rates applicable in Ontario and British Columbia); VAC failed, from 2007 to present, to include the Canada Employment Amount in its calculation of the Wage Rate; and VAC failed, from 2002 to the present, to include the Northern Resident Deduction in its calculation of the Wage Rate.

Class Members

At the end of last year, the Federal Court certified the action as a class proceeding. The class on the Veteran’s Pension Error website is defined as:

All members and former members of the CAF and RCMP, and their spouses, common-law partners, dependants, survivors, orphans, and any other individuals, including eligible estates of all such persons, who received, at any time between 2002 and the present, disability pensions, disability awards, and other benefits from VAC.

Second Criteria

The second criteria is that anyone who was affected by the annual adjustment of the basic pension under section 75 of the Pension Act including, the awards and benefits listed at Schedule A of the certification order:

• • Pension Act: pension for disability; pension for death; attendance allowance; allowance for wear and tear of clothing or for specially made apparel; and exceptional incapacity allowance;
  • Veterans Well-being Act: disability award; and clothing allowance;
  • Veterans Well-being Regulations: remuneration of an escort;
  • Veterans Health Care Regulations: remuneration of an escort; and treatment allowance;
  • Veterans Review and Appeal Board Act: compassionate award;
  • Civilian War-related Benefits Act: war pensions and allowances for saltwater fishers, overseas headquarters staff, and air raid precautions workers; and injury for remedial treatment of various persons and voluntary aid detachment (World War II);
  • Children of Deceased Veterans Education Assistance Act: monthly allowance for education; and
  • Flying Accidents Compensation Regulations: flying accidents compensation.
  • All class members are automatically included in the class action and are bound by any judgment or settlement of the action unless they decide to back out by October 28, 2021.

“If you opt out, you will not be part of the lawsuit and you will not be able to share in any money or any other benefit obtained for the class if the lawsuit is successful,” according to the VAC website.

Legal fees do not need to be paid for by class members. Instead, class counsel will be paid at their regular hourly rate for amounts recovered up to $165 million and up to 30 per cent of any amounts recovered in excess of that amount, only if the action succeeds.

Lawyers for the class

• • Gowlings WLG (Canada) LLP (Toronto)
  • Michel Drapeau Law Office (Ottawa)
  • Murphy Battista LLP (Kelowna and Vancouver)
  • Koskie Minsky LLP (Toronto)
  • McInnes Cooper (Halifax)

To learn more about the class action, including whether you might be a class member or how to opt-out, please visit here. Any questions about the class action can be sent here. To view Section 75 of the Pension Act, visit here.