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Are Veteran’s Affairs Pensions considered Income for Child and Spousal Support?

Written by: HHLaw (View All Posts ) Published: November 2, 2016
Categorized: Child Support, Spousal Support.

The question of whether Veteran’s Affairs pensions and Veteran’s Affairs disability pensions received by military personnel for their injuries or disabilities suffered in the line of duty should be characterized as income for child and spousal support claims appears to be an emerging area of contention in family law. Courts across the country have treated this question in strikingly different ways.

Interestingly, the source of controversy is not a family law case. In Manuge v. Canada, 2012 FC 499, the Federal Court dealt with whether veteran’s disability pensions could be deducted as “income” under the Pension Act. Justice Barnes found that disability pensions for veterans could not be characterized as Income. The court reasoned that “the monthly benefit payable to disabled members of the CF is not intended to be a form of income replacement. Instead, it is designed to compensate for the loss of amenities of life and for the personal limitations and sacrifices that arise from disabling injuries.”

The Alberta Court of Queen’s Bench adopted the reasoning in Manuge in calculating income for the purposes of child support. Storey v Simmons, 2013 ABQB 168: The Justice Veit found the Manuge case of “critical importance” for determining that Veteran’s Affairs disability pensions are not income for the purposes of child support, but excluded property. The court found that the veterans affairs disability pensions are correctly characterized as being property received in replacement of the loss of amenities in life rather than as income replacement.

The British Columbia Supreme Court has agreed with the Alberta courts to date. In LF v CGC, 2014 BCSC 1069, Justice Brown quotes Storey at length, confirming that Veteran’s Affairs pensions retain their character as “a personal award for loss of amenities”, and were therefore exempt from child support claims. Justice Masuhara, in Wells v. Campbell, 2015 BCSC 3, followed the reasoning in LF to spousal support claims, noting the parallel between veteran’s affairs disability pensions and awards or benefits for loss or injury.

Alberta and British Columbia, thus, appear to be at a relative consensus that Veteran’s Affairs Pensions are not to be included in income for the purposes of support on the basis that such benefits are compensation for loss of amenities, and thus more appropriately characterized as property than as income. Nonetheless, caution should be exercised in relying on these cases as precedent as the issue has not been put before the Court of Appeal in either province, and there is conflicting precedents in other jurisdictions.

The New Brunswick Court of Appeal has dealt with the issue, in Vaughan v Vaughan, 2014 NBCA 6, and found that the reasoning in Manuge, followed in Alberta and British Columbia, is not determinative of the issue, and that Section 15 of the Divorce Act obligated the court to consider the “condition, means, needs, and other circumstances of each spouse” in line with the broad policy objectives of the Divorce Act. The court determined that Veterans Affairs Disability pensions could be used to calculate income for the purposes of spousal support.

Manitoba, in Frigon v Blanchard, 2014 MBQB 212, took a more fact-based approach. This “broader” approach focused on whether the disability pension is actually available as income, or is spent on reasonable and justifiable expenditures that accord with the intended purpose of the benefits.

Even within the same province, the court is divided on the issue. In Saskatchewan, Justice Labach in Starling v Starling, 2016 SKQB 112, followed Vaughan, distinguishing Manuge on the basis that disability pensions fall within the wide-ranging definition of “means” that may be available for support, and citing the broad policy objectives of the Divorce Act. In contrast, in AVR v. MJA, 2016 SKQB 272, the court agreed with the principle espoused in Manuge that settlements or awards on account of loss of amenities of life or pain and suffering should not be included in income. Justice Barrington-Foote found that veteran disability pensions were therefore not income for the purposes of child support.

In conclusion, disabled veterans, and non-military persons suffering from disabilities should be aware that their pensions may not automatically be included as income for child support and spousal support. Disabled individuals facing support claims should seek legal counsel that can effectively communicate to the court the connection between their disability benefits and the provision of the amenities of life otherwise unavailable to them due to their disability.

Our lawyers are at forefront of this developing area of law and will continue to advocate for Veterans and disabled individuals for equitable resolution of child and spousal support matters that balance the need to support injured and disabled individuals and their families.

Contact the lawyers at Henderson Heinrichs LLP to learn more about this issue.




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