Soldiers squander disability payouts

[PMedMoe]

Article Link

OTTAWA — Canada’s top soldier says he’s concerned some younger vets are blowing their disability awards on trucks and sports cars instead of saving money, and he hopes Veterans Affairs will offers soldiers different payments options if they are wounded.

Gen. Walter Natynczyk, chief of the defence staff, told QMI Agency each soldier is different and the Department of National Defence is working with Veterans Affairs to see “what are the gaps” so new veterans, those coming back from Kandahar, can be taken care of.

Veterans' groups are overwhelmingly opposed to a new policy by the Conservative government that eliminated monthly disability pensions in favour of lump-sum payments, up to a maximum of $276,080, if they are permanently disabled.

Natynczyk told a group of soldiers, concerned they’ll have nothing left if they get their legs blown up and spend their award adapting their homes for their disability, that he’s aware there’s a problem.

“The monthly pension was great for younger vets and the lump-sum payment was better for older veterans. But now we have a mix,” he said. “Some younger veterans took their cash and bought Porsches, boats and souped-up trucks, and now they are broke. It’s always hard when you have people who are 21, 22 and 23 years old.”

Natynczyk told QMI Agency, each person is different and Veterans Affairs should consider that when they look at the types of programs in the future.

More at link

I can certainly see this as being a problem. 

 

[OldSolduer]

But the Winnipeg Sun reported that 69% of those that received the lump sum payment were OK with it. Mind you, of over 9000 pers that had received a lump sum, just over 1,000 bothered to answer the question.

 

[gaspasser]

It looks too that some of our vets and disabled coming back are not receiving proper financial counseling or attending SCANs ?
Too much money too fast without a plan will get our guys into trouble fast.  Perhaps that is why the high schools here are starting a new compulsory credit course on financial planning and budgeting.
I don't make enough to worry about buying a Porche or big truck... ;D
Regards, BYTD

 

[HItorMiss]

From experience....

VA offers financial counseling to any member receiving an award over a certain amount (without checking what that amount is I cannot say for sure but I believe over 10k) You have the option of taking this counseling however if you do not you must sign a form stating that you do not require it.


That all being said the system is wrong and cheaps out. You CANNOT tell me that my friend who lost both his legs and in all honesty will never properly work again would have made 250k in the 30 some odd years he had left in the CF had he not been injured serving his country. The system works great for the older vets (god bless them) but we new vets are starting (sadly) outnumber them and IMO the system should cater to the majority.


my 2 bones and you get what you paid for it.

 

[SeanNewman]

I don't think it would take a rocket scientist to identify that giving that much money to a younger person would result in some extravagant purchases.  Even the guys who don't get wounded and come back from a tour with $20,000 in the bank manage to spend it all on new cars / motorcycles half the time.

It would be nice to see that $250,000 spent on a house or something because then at least that major expense is covered right off the bat for the rest of that person's life (not to mention how much interest they're saving).

That way if they work it's just to pay for living expenses other than the house, which is sort of equivalent to getting thousands of dollars a month for life.

But how can you force someone to spend money responsibly?  The guy just lost his legs for his country, should we cut him some slack and let him buy a hand-controlled Corvette if he wants?

 

[Michael OLeary]

But how can you force someone to spend money responsibly?  The guy just lost his legs for his country, should we cut him some slack and let him buy a hand-controlled Corvette if he wants?

Simple, you return to an annuity.  That way the soldier always has something coming in to pay for those living expenses a fancy car does not replace. With an annuity, those few who might misuse a bulk payout are not some day standing there empty-handed, claiming the government didn't do enough to make sure they didn't make bad decisions.

 

[Rifleman62]

Veterans' groups are overwhelmingly opposed to a new policy by the Conservative government that eliminated monthly disability pensions in favour of lump-sum payments, up to a maximum of $276,080, if they are permanently disabled.

But Veterans Affairs Minister Jean Pierre Blackburn believes there is absolutely no need to revisit lump-sum payments and he’s opposed to providing soldiers with options.

It appears clear that Blackburn has his marching orders, but from whom? The PM or the bureaucrats that run VAC. Just prior to Thompson (the previous Minister) push out of VAC (oh, sorry, he retired prior to a cabinet shuffle), Thompson "complained" that he was seldom home as he travelled so ofter on VAC business. Sounds like get the boss out of the office.

Our Vets were immensely short changed by the new Veterans Charter. Receiving a tax free, indexed (only .5% last year, but indexed), guaranteed income for life, with a % for a beneficiary, awarded for sacrifice, is what a nation should be granting. Giving a lump sum, and write-off is not.

Annuity? Taxes/stockmarket/low rate of return/uncertainty. Would young servicepeople contribute to CFSA if they had the option, or use the annual deduction for a car payment? Can you buy and maintain a housing unit everywhere in Canada for $276k? How do you pay for the utilities? Repairs? Food?

 

[SeanNewman]

Can you buy and maintain a housing unit everywhere in Canada for $250k? How do you pay for the utilities? Repais? Food?

Paying $250,000 cash for a house is roughly equivalent to paying $500,000 over the life of a 25 year mortgage, though.  I agree with you that $250,000 won't buy a house everywhere in Canada, but it will still buy a nice house in a hell of a lot of places that the soldier can live.

I don't think that the money is meant to say that the person never has to earn another dime in their life, so much as it is just a huge head start.  However, with a house theoretically paid for, that person would now only need to earn relatively little to pay for their bills with no mortgage. 

But the problem is that if the soldier doesn't spend that money responsibly on a house (or other financially stable way), now they're double screwed because then they not only have to still pay for a house but they're not getting VAC payments every month.

 

[captloadie]

I am interested in knowing how many of the people who responded they were happy with a lump sum were disabled to the point they either can't continue in the military, or will likely never be able to find another meaningful career. That's why there should be options.

However, I believe it is human nature to take what you can get now as opposed to waiting to get more over time. That's why people settle in court cases, take a bulk payout on lotteries instead of spreading it over 30 years, etc.

 

[Teeps74]

A survey by his department of 1,048 recipients of the lump-sum payments suggested 69% of respondents preferred the lump sum.

From the linked article.

I am sure that the survey in question was completely unbiased and did not guide the respondents down their desired path...  :

Blackburn is an idiot, and I would love the opportunity to call him thus to his face. He is a bureaucrat, trying to save money to make his master pleased. The lump sum payouts are not to help soldiers, they are to shut them up and send them on their way.

It is nothing short of criminal IMHO.

 

[Michael OLeary]

Unfortunately, that 69% isn't further broken down by those who preferred it because it paid for their shiny new truck, or because it let them set up a trust fund for their childrens' education.

 

[Gunner98]

Article Link

Natynczyk told a group of soldiers, concerned they’ll have nothing left if they get their legs blown up and spend their award adapting their homes for their disability, that he’s aware there’s a problem.

If they have to use their awards to adapt their homes then VA and the CF will be failing them.

 

[OldSolduer]

If they have to use their awards to adapt their homes then VA and the CF will be failing them.

That should not be happening.

 

[RHFC_piper]

I am interested in knowing how many of the people who responded they were happy with a lump sum were disabled to the point they either can't continue in the military, or will likely never be able to find another meaningful career. That's why there should be options.

However, I believe it is human nature to take what you can get now as opposed to waiting to get more over time. That's why people settle in court cases, take a bulk payout on lotteries instead of spreading it over 30 years, etc.

Regarding the question on the survey pertaining to the 'lump sum', if memory serves, I believe it was presented as such; "would you prefer to recieve your compensation all at once or in small amounts over a longer period of time?" 

As opposed to what everyone assumed would be the question "would you prefer a lump sum or a pension?"

Essentially, what they asked was; "Would you want everything you're entitled to now, or exactly the same amount, with no interest, over a longer period of time".

Again, if memory serves, I answered that, in this scenario, I prefered the lump sum... Simply because an investment of a lump sum into a RRSP accrues more interest than small amounts added over time.

I don't recall being asked whether or not I'd prefer a pension, just whether I wanted the money all at once, or the same amount of money a bit at a time.

 

[jollyjacktar]

I agree the revamp of the benefits for veterans and the wounded was done with the intention of cheapening out on expenses and ridding themselves of nuisances. 
Any time someone from Ottawa trumpets on some new thing done for our benefit I am always suspicious and find to my understanding they have given with one hand and taken back more with the other.  Smoke and mirrors sleight of hand parlour tricks to fool the public and gullable IMHO.  :2c:

 

[Teeps74]

Regarding the question on the survey pertaining to the 'lump sum', if memory serves, I believe it was presented as such; "would you prefer to recieve your compensation all at once or in small amounts over a longer period of time?" 

As opposed to what everyone assumed would be the question "would you prefer a lump sum or a pension?"

In other words, the survey attempted to compare apples to pineapples, without presenting context. About as honest a question as a used car salesman, "This car is going to give you great fuel economy!" (Because it is going to travel only to the garage and back for repeated repairs....)

 

[RHFC_piper]

In other words, the survey attempted to compare apples to pineapples, without presenting context. About as honest a question as a used car salesman, "This car is going to give you great fuel economy!" (Because it is going to travel only to the garage and back for repeated repairs....)

Pretty much...

Basically, their implication was; "you're getting the set amount no matter what; how would you like it?"

As stated in a previous post; they're not revisiting the question of lump-sum vs. pension...  now they're just looking at the result of this question and how it's affecting the soldiers. 

 

[Rifleman62]

Every survey that I have ever seen over the years, conducted/produced by VAC has been favourable to everythinhg that VAC does or what ever the question was. May be I missed one.

Anyone read Salute??

 

[Nemo888]

The New Veterans Charter saved the taxpayers tonnes of money.  I heard a "rumour" that the cost of Veterans payouts was still going to be more than prosecuting the entire war even with the cutbacks. Sobering thought if it is true.

I received as a lump sum what I would have received in 6.7 years on the old system.  I was hurt before the change over, but didn't apply till after.  It wasn't really enough money to do anything worth while long term. It paid for my wife's education so my kid could have some financial security.

276,000 is for 100% disability, quadraplegic or death.

A buddy lost her knee and got 20%. Before she ran 8k a day. Now she can barely do housework and can't keep up on walks. I don't think 55K will even cover her lost wages. She does get free snow shoveling though. 400$ a year if she does all the paperwork correctly.

 

[OldSolduer]

The New Veterans Charter saved the taxpayers tonnes of money.  I heard a "rumour" that the cost of Veterans payouts was still going to be more than prosecuting the entire war even with the cutbacks. Sobering thought if it is true.

I received as a lump sum what I would have received in 6.7 years on the old system.  I was hurt before the change over, but didn't apply till after.  It wasn't really enough money to do anything worth while long term. It paid for my wife's education so my kid could have some financial security.

276,000 is for 100% disability, quadraplegic or death.

A buddy lost her knee and got 20%. Before she ran 8k a day. Now she can barely do housework and can't keep up on walks. I don't think 55K will even cover her lost wages. She does get free snow shoveling though. 400$ a year if she does all the paperwork correctly.

Did she appeal the decision?