Looking after your health or your next career will be your top priority. We can help with the finances while you are doing that. The Income Replacement Benefit maintains your income while you are taking part in the VAC Rehabilitation Program.
About this program
The Income Replacement Benefit (IRB) is a taxable, monthly benefit that ensures your total income will be at least 90 percent of your gross pre-release military salary, until you reach the age of 65, while you are participating in the Rehabilitation Services and Vocational Assistance Program or if you have a Diminished Earning Capacity (DEC).
If you have a Diminished Earning Capacity and have reached 65, your benefit will be reduced and you will receive 70 percent of the IRB amount payable prior to age 65 minus offsets. If you are still participating in the program and turn 65, your monthly amount will be recalculated starting at the beginning of your birth month. It then reduces to 70 percent of the amount you received the month earlier.
Do you qualify?
You should apply for this program if you meet these conditions:
- are a former or current member of the Canadian Armed Forces;
- have applied to the rehabilitation program;
- are following a physical or mental health program as the result of a service related health problem that is complicating your transition out of the military; and
- are under the age of 65.
You should also apply for this benefit if you are the survivor or orphan of a CAF member or Veteran who:
- died before age 65 of an illness or injury related to their service.
- died while in receipt of the Income Replacement Benefit, regardless of their age.
How to apply
Apply online
The application process is easier and faster when you use the guided form available in My VAC Account.
Go to My VAC AccountBy mail
Download and complete the form.
Then print and mail your application form to the address provided.
Go to formGet help with your application
By phone: Call us at 1-866-522-2122.
In-person: The staff at any VAC office or CAF Transition Centre can assist you.
How the benefit is calculated
The Income Replacement Benefit will be determined based on whichever is highest:
- 90 percent of your salary at release, indexed forward to current day, or
- the current minimum threshold, which is indexed annually based on the Consumer Price Index.
VAC must consider several factors to calculate your Income Replacement Benefit amount.
Income Replacement Benefit toolAdditional information
See the current rate for this program
Offsets
The benefit monthly amount is offset by other income sources, like amounts paid to you through the Canadian Forces Superannuation Act—better known as a military pension.
The Income Replacement Benefit recognizes that your overall income can come from several sources, (Old Age Security, the Canada Pension Plan, or the Act respecting the Quebec Pension Plan [CQLR]).
To encourage activities that are beneficial and meaningful, the Income Replacement Benefit will allow you to earn up to $20,000 per year before any offsets are applied. Any employment and self-employment income above $20,000 will then be offset dollar-for-dollar.
Diminished earning capacity
Diminished Earning Capacity (DEC) means that the Veteran is incapacitated by a permanent physical or mental health problem that prevents the Veteran from performing any occupation that would be considered suitable gainful employment.
Suitable Gainful Employment (“employability”) refers to employment for which the Veteran is reasonably qualified by reason of education, training, and experience and that provides a monthly rate of pay equal to at least 66 ⅔ per cent of the imputed income of the Veteran (pre-release salary or minimum amount).
Lifetime benefit
The Income Replacement Benefit may continue beyond the duration of your rehabilitation and/or beyond your reaching age 65 if you have a Diminished Earning Capacity (DEC).
If a Veteran has a Diminished Earning Capacity (DEC) prior to age 65, the IRB may be payable for life at age 65. The IRB will be calculated at 70% of the amount a Veteran was entitled to receive pre-age 65 (less offsets). The benefit is offset by other income sources, like the CFSA, the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP), and Short or Long-term Disability Insurance Benefits or the Benefits payable under the Old Age Security Act (OAS).
After the age of 65, all the same income offsets are considered, and Veterans are still able to earn $20,000 in employment earnings before they are deducted.
Related programs
Rehabilitation services: Services to improve your health and adjust to life after service.
Vocational rehabilitation: To help you transfer your skills and education to build a rewarding civilian career.
Frequently asked questions
Why are Veterans able to earn up to $20,000 while receiving the Income Replacement Benefit?
To encourage Veterans to engage in activities that are beneficial and meaningful to them, the IRB allows Veterans to earn up to $20,000 per calendar year from employment (or self-employment) without affecting their benefit amount. However, any earnings above $20,000 will be deducted dollar for dollar from the benefit amount.
The Veteran is required to notify the Department of their regular employment earnings on a monthly basis. Proof of employment such as pay stubs, Records of Employment, T4s, etc. can be used to document income earnings. Veterans in receipt of self-employment earnings must provide a statement of their expected earnings at the start of each year and must provide an annual statement of their actual self-employment income at the end of the calendar year. Please note that VAC may verify these amounts using income tax data provided by the CRA.
View all Income Replacement Benefit FAQs.