Question Period Note: TAX SLIP DISCLOSURE

• On February 22, 2022, VAC was informed of an incident with the issuing of the tax slips related to the IRB program, at which time VAC took immediate action.
• The information for 417 deceased Veterans was erroneously included on tax slips sent to 687 individuals. We have since issued apology letters to those individuals.
• The error was caused by a defect introduced into VAC processing software as a result of system enhancements. This defect has been corrected and additional safeguards have been put in place to mitigate this issue in the future.
• VAC has received two formal written complaints, and a number of calls informing the department of the issue.
• This incident resulted in a material privacy breach which has been reported to Treasury Board Secretariat and the Office of the Privacy Commissioner.
• Veterans Affairs Canada takes very seriously its responsibility to protect the privacy and rights of all Veterans and their families. As such we cannot comment around all the details in this incident.

BACKGROUND — TAX SLIP DISCLOSURE

The Income Replacement Benefit is a taxable, monthly benefit that can be provided to the survivor (spouse or common-law partner) and orphans of a deceased Canadian Armed Forces member or Veteran. As the IRB is taxable under the Income Tax Act, VAC is required to collect the Social Insurance Number (SIN) for the purposes of withholding taxes from recipients' benefits.

On February 22, 2022, VAC was informed of an incident with the issuing of the IRB tax slips to survivors and dependents. When the slips were issued, they contained a combination of the deceased Veteran’s personal and their survivor’s and/or dependent’s information. Specifically the tax slips included the name and last known mailing address for the Veteran and, where the Veteran was in receipt of a taxable VAC benefit at the time of their death, the tax slip also included their SIN. If the Veteran was not in receipt of a taxable benefit at the time of death the slip did not include a SIN (neither the Veteran’s nor the survivor/dependent’s). They also included information about the survivor/dependent’s IRB income but no other information about that individual, including their name.

VAC immediately took steps to mitigate the error and new tax slips were issued and mailed.

VAC also commenced an investigation into the breach and determined that the system error resulted in a privacy breach of the deceased Veterans’ personal information, but not of the survivors or dependents. As some of the tax slips contained a SIN this constituted a material breach and a preliminary report was sent to TBS and OPC to notify them, as per the requirements. A final report will be sent once the investigation is complete. No notifications were sent to individuals however as all individuals affected by the breach were deceased.

As a result of this system error, three scenarios arose:
• A privacy breach related to deceased Veterans;
• Survivors and dependents potentially receiving an erroneous tax slip; and
• Parents of deceased Veterans receiving tax slips addressed to their deceased child.

On April 8, 2022, a story was published by CBC regarding parents of a deceased Veteran having received a tax slip addressed to their deceased son.

VAC has issued apology letters to the 687 living individuals who were sent incorrect tax information.

None