A class-action settlement has been approved for eligible Canadian veterans who were underpaid disability pension benefits by Veterans Affairs Canada (VAC).

According to the class action's website, the federal court decision approving the settlement became effective in March 2024.

The representative plaintiffs alleged that VAC miscalculated the benefits between January 1, 2003, and December 31, 2023, and failed to index the payments properly based on inflation.

As a result, veterans haven't received the full amount of benefits they are entitled to or interest on the benefits, noted Koskie Minsky, one of the law firms involved in the case.

Canada's Veterans Ombudsman noted that VAC estimated that this error affected about 270,000 veterans who served for the Canadian Armed Forces and the Royal Canadian Mounted Police, as well as "survivors and their estates."

The agreement states that class members will get a one-time payment of approximately 2 per cent of the affected benefits received during the aforementioned period.

The estimated value of the agreement, depending on the total claims, is at least $435 million and up to $817 million. 

According to court documents, the average class member will receive under $5,000, and only 40 eligible payments exceed $35,000

"It is important to ensure that veterans receive their proper financial consideration," said representative plaintiff David White in a statement.

"I am pleased that has been achieved through this Agreement and that the Class of disabled veterans will receive compensation."

Two different settlement groups

Claims administrator KPMG says there are two different groups involved in this settlement.

The first are class members who either have a current payment relationship with, currently receive disability pension benefits from, or are a survivor of a person who received disability pension benefits from VAC.

These individuals do not need to submit a claims form and will automatically receive their settlement payment from VAC by direct deposit or cheque by December 19, 2024. 

The second group involves relatives or estate representatives of a class member or class members who do not have a current payment relationship with VAC.

These individuals must submit a claim in writing or online by March 9, 2025.

KPMG notes that all claims will be paid out by March 2026, and the time to opt out of the settlement has passed.

The accounting firm has also established a dedicated call centre to address general inquiries and help individuals complete the online claim form. The call centre can be reached at 1-866-545-9920, or questions can also be emailed to info@vetspensionerror.ca.

Additional information can be found here.