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
Apply online through My VAC Account. Applying is easier with a guided form. Sign in or register for My VAC Account.
My VAC AccountMail or in person
Download the application form. Then, drop it off at a VAC office or CAF Transition Centre. You can also mail your completed form directly to the address listed on the form.
Please Note: Due to COVID-19, some offices are not accessible. Please mail the form directly to the address listed on the form if your location is not open.
Go to formGet help with your application
The staff at any VAC office or CAF Transition Centre can assist you, or call us at 1-866-522-2122.
Please Note: Due to COVID-19, some offices are not accessible. Please mail the form directly to the address listed on the form if your location is not open.
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
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.
Diminished Earning Capacity means that you have a permanent physical or mental health condition that prevents you from performing any occupation that provides a monthly rate of pay equal to at least two-thirds of your pre-release salary or the minimum threshold. Your Diminished Earning Capacity must be due to a health problem(s) for which you have been made eligible for the Income Replacement Benefit and the Rehabilitation Services and Vocational Assistance Program.
Lifetime benefit
If you do not have the capacity to be suitably gainfully employed due to a physical or mental condition related to your service and are experiencing a Diminished Earning Capacity, the benefit could be payable for life.
The value of your monthly military salary would be recalculated by applying a career progression factor until the earlier of 20 years of service, had you not released, or age 60. The career progression factor is a 1% annual adjustment to the monthly military salary.
After you reach age 65, your benefit will be reduced and you will receive 70 percent of the amount payable prior to age 65 (which was 90 percent of your salary at release or the minimal amount), minus offsets from other income sources, such as benefits payable under the Canadian Forces Superannuation Act, commonly known as the CAF military pension (70% of the 90%).
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 Income Replacement Benefit (IRB) allows recipients to earn up to $20,000 from employment (or self-employment) per calendar year without affecting their benefit amount. However, any earnings above $20,000 will result in a reduced benefit amount.
The yearly amount of $20,000 is being used as it is approximately the maximum amount an individual can earn before taxes are deducted in the most generous jurisdiction (Alberta).
Employment income in excess of $20,000 will be fully offset dollar for dollar from the IRB amount.
What is Diminished Earning Capacity?
The Income Replacement Benefit may continue beyond the duration of your rehabilitation and/or beyond the age of 65 if you have a Diminished Earning Capacity (DEC). DEC means that the Veteran is incapacitated by a permanent physical or mental health problem that resulted primarily from service, preventing the Veteran from performing any occupation that would be considered suitable gainful employment.
Suitable Gainful Employment ('employability') means 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 2/3 percent of the imputed income of the Veteran (pre-release salary or minimum amount).
View all Income Replacement Benefit FAQs.