Income Replacement Benefit FAQs

1. What financial support is available for Veterans who are mentally and physically able to work, but have not yet found employment or a source of income?

Veterans who are:

• able to work;
• participated in VAC Rehabilitation Program;
• no longer entitled to the Income Replacement Benefit;
• are unable to find employment or are underemployed;

may be eligible for the Canadian Forces Income Support (CFIS).

The CFIS is a non-taxable, monthly income support that provides financial assistance to help meet basic needs such as food and shelter. Veterans must submit their application for the CFIS within six months of the date that they no longer qualify for the IRB.

VAC’s Education and Training Benefit (ETB) and Career Transition Services (CTS) programs are also available to support eligible Veterans who have not yet found employment or a source of income.

2. Why is the January IRB amount different from the December amount?

The Monthly Military Salary (MMS) used to calculate your IRB is indexed annually every January 1^st in accordance with the increase to the Consumer Price Index (CPI). This increase is rounded up to the next 0.10% for the year. The CPI increase is based on what the CPI was as of October 31 the previous year. It is the annual average index for all consumer items and is published by Statistics Canada. As a result of this indexation, Veterans should notice a change in their IRB payment starting in January every year.

The IRB allows Veterans to earn up to $20,000 from employment per calendar year before the benefit is reduced. This $20,000 employment exemption starts over every January 1^st for the new calendar year. As a result, if a Veteran has employment income, they may see an increase in their IRB monthly payment starting in January until they reach the $20,000 in employment earnings in that year. Deductions due to employment earnings will begin again if they reach that $20,000 threshold.

3. How did Veteran Affairs Canada (VAC) determine the Career Progression Factor (CPF) of 1%?

The legislative criteria for the Career Progression Factor (CPF) were developed based on the analysis of a military career duration and progression in the Canadian Armed Forces (CAF). The intent of the CPF is to address the loss of career advancement opportunities due to the development of a health problem resulting primarily from service.

If a Veteran has not yet served a full career in the military but now has a Diminished Earning Capacity (DEC), the IRB will be increased by 1% every year from the time of release until the Veteran reaches what would have been 20 years of service or age 60.

4. I would like to have more taxes taken off my Income Replacement Benefit (IRB), how can I do this?

In order to increase the amount of tax deducted from your IRB, you must complete a Federal TD1 form.  This form can be found at TD1 2024 Personal Tax Credits Return.  For details on how best to complete this form for your personal situation, it would be best to consult with CRA or your financial advisor.

5. I have already filled out a Federal TD1 form with my employer (or another payer), do I still have to complete a new one?

Yes, in order to have extra tax taken off your IRB, you need to notify VAC by completing the TD1 form.  For details on how to complete this form for your personal situation it would be best to contact CRA or your financial advisor.

6. When should I anticipate receiving my T4 from VAC?

You should receive your income tax slips from VAC by mail and in your MyVAC Account inbox by February 28th.