Question Period Note: INCOME REPLACEMENT BENEFIT (IRB)

• Income Replacement Benefit (IRB) is a taxable, monthly payment that guarantees Veterans receive 90% of their pre‑release military salary, after accounting for other income, while they are participating in the Rehabilitation Program.
• For Veterans who cannot return to suitable work, IRB can continue for life if VAC determines they have a Diminished Earning Capacity before age 65. After age 65, the benefit is reduced to 70% of the pre‑65 IRB amount, minus other income.
• VAC routinely verifies income information and adjusts payments as needed. This is a standard, transparent part of IRB administration and is explained during the application process.
• As part of the income verification process, Veterans receiving IRB must report any and all other income both at application and while receiving the benefit to avoid over or under payments.

IRB provides 90% of a Veteran’s indexed pre release military salary, minus other income such as pensions or Canada Pension Plan benefits.
To support rehabilitation and return to work efforts, Veterans can earn up to $20,000 per year in employment or self employment income before any reduction to their IRB. This exemption resets every January and is designed to encourage participation in work without immediate financial penalty.
Overpayments
Overpayments occur when income that should be included in the IRB calculation is not reported or identified until after payments are made. Once identified, VAC must recalculate the benefit. Preventing overpayments relies primarily on timely income reporting by Veterans. When changes to income are not reported promptly, monthly IRB amounts may be incorrect.
VAC has information sharing agreements with key federal partners, including CRA and ESDC. These agreements allow VAC to verify income when needed; however, Veteran reported information remains the most effective prevention measure.
When applying for IRB, Veterans must declare current and expected income and provide supporting documentation. After approval, VAC reinforces reporting requirements through case management and written notices, including recalculation letters when changes occur.
As of April 7, 2026, Veterans registered with My VAC Account can now view and verify the income information VAC has on file and submit an online form electronically to make updates.
IRB is recalculated whenever VAC receives updated income information, either from the Veteran or through federal data sharing. Recalculations are part of regular benefit administration and may also occur following broader events, such as CAF salary changes.
Recently, VAC reviewed income data received from CRA and determined that recalculations were required related to the Canadian Pension Plan (CPP)/Quebec Pension Plan (QPP) and CPP-Disability, which resulted in overpayments for some individuals. In such cases, letters are sent to Veterans indicating the overpayment and the necessary next steps, with some Veterans receiving a call from VAC to discuss the situation.
If a Veteran disagrees with an IRB overpayment, they can request a review by submitting an appeal to VAC’s National First‑Level Appeals Unit.
Repayment options are not discussed until the appeal is decided.

Diminished Earning Capacity (DEC)
DEC is a designation used when a Veteran has a service related health condition that prevents them from performing suitable, gainful employment (66 2/3 pre-release salary). Veterans are assessed for DEC near the end of rehabilitation. If approved, IRB may continue for life, subject to ongoing eligibility.
IRB Calculation
The calculation of IRB for a Veteran under the age of 65 is: A - B = IRB monthly payment (before taxes)
A is the Veteran’s monthly military salary or the minimum amount  determined by VAC each year – whichever is higher, then multiplied by 90%.
B is an amount payable to the Veteran each month from specific other sources of income (listed below).
At age 65, IRB is automatically reduced to 70% of the pre 65 amount (90%), reflecting a transition similar to other retirement income programs.

As of March 31, 2026, there are approximately:
• 34,513 Veterans & 929 Survivor/Orphans
o 25,676 Veterans with Diminished Earning Capacity (DEC)
Rapid program expansion:
• Recipients tripled since 2016–17 (11,600 → 35,000)
• Annual growth projection: 7%
• Expenditures: $1.43B (2024–25) → expected to exceed $2B by 2029