UPDATED at 3 p.m. Tuesday
OTTAWA — The federal government will not a appeal a Federal Court of Canada ruling that rejected clawbacks from the pensions of disabled veterans.
Veterans Affairs Minister Steven Blaney and Defence Minister Peter MacKay made the announcement in Ottawa on Tuesday, saying they had sought and received a clear opinion from the court on the payments.
The ruling earlier this month was a victory for veterans five years in the making.
The class action was filed in March 2007 on behalf of Dennis Manuge and 4,500 other disabled veterans whose long-term disability benefits are reduced by the amount of the monthly Veterans Affairs disability pension they receive.
“It is clear to me, frankly, that this issue has been held up and been in the courts far too long,” MacKay said.
“There is simply no reason to delay the benefits of those who are suffering as a result of their service.”
He said it wasn’t clear how much it would cost the federal government or how far back the payments would go, adding that they would continue talking to the parties involved.
Manuge has said in the past that as much as $320 million was at stake in the court fight.
Senior defence sources say the final pay-out figure is “likely in the hundreds of millions of dollars” but that will be determined in negotiations with the plaintiffs.
A government source said one internal estimate sees the figure go as high as $600 million, depending upon the negotiations.
The court said the clawback was unfair under the Pension Act and violated the reasonable expectations of disabled vets.
Veterans Affairs Minister Steven Blaney said all three disability benefits awarded to veterans will be aligned and not be deducted.
Both the military ombudsman and a Senate committee investigated the clawback and declared it “profoundly unfair.”
Liberal Veterans Affairs critic Sean Casey was happy and credited Manuge, the veterans’ lobby and the Opposition for the decision to halt the court battle.
“I am very pleased for Dennis Manuge and for his tireless efforts to obtain justice for himself and for thousands of veterans in Canada,” said Casey.
“It is sad that the government had to be shamed into doing the right thing, but regardless of their motives, the decision to respect the Federal Court is a welcome development.”
The policy that initiated the benefits clawback dates to the late 1960s and Manuge’s lawyers argued that it was illegal because the chief of defence staff at the time did not have the authority to make such a decision.
Manuge joined the army in 1994 and spent almost 10 years in uniform, serving a tour in Bosnia in 2001 after he was injured.
In 2002, while still serving, he began receiving a $444 monthly disability pension on top of his pay, but that changed when he was discharged for medical reasons in December 2003.
The military’s compulsory insurance plan entitled Manuge to 75 per cent of his former income for two years because he had become too physically disabled to do his job.