The federal government has decided not to appeal a Federal Court of Canada ruling that said Ottawa must stop clawbacks from the pensions of disabled veterans.
Veterans Affairs Minister Steven Blaney and Defence Minister Peter MacKay made the announcement Tuesday, saying they sought and received a clear opinion from the court on the payments.
"We now have that clarity and it has received considerable legal and judicial oversight," MacKay told reporters.
"As a result of that court action, we are now moving forward out of fairness and respect for those veterans to ensure those benefits are fully paid."
MacKay said there is now no reason to delay the benefits of those who are suffering as a result of their military service.
"The men and women who serve and sacrifice in Canada's name need to know that their government will stand behind them and provide the benefits they need when their service is complete," MacKay said in a statement.
"I am pleased to announce our government will discontinue the offset for Long Term Disability benefits."
The ruling earlier this month was a big victory for veterans. The class action lawsuit was filed in March 2007 on behalf of 4,500 disabled veterans whose long-term disability benefits were being cut by the amount of the monthly Veterans Affairs disability pension they received.
The court said the clawback was unfair under the Pension Act and violated the reasonable expectations of disabled vets.
Dennis Manuge, a disabled veteran who launched the lawsuit, choked up Tuesday when he thanked his lawyers, government ministers and his fellow veterans.
"This has been a very difficult experience for Canada's disabled veterans, including me," he said, as his 17-month-old daughter and wife looked on.
"It is a relief that we are one step closer to being reimbursed."
Blaney said all three disability benefits awarded to veterans will now be aligned.
"With these changes, Veterans Affairs' disability pension will no longer be deducted from the Earnings Loss Benefit, as will be the case with the War Veterans Allowance and the Canadian Forces Income Support Benefit," Blaney said in a statement. "This is a very positive change for our men and women injured in service to Canada who will now receive the benefits and services they are entitled to."
The opposition hailed the government's decision, but criticized the fact it took a legal battle to settle the clawback issue.
"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 Liberal veterans affairs critic Sean 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."
MacKay says it isn't clear how much it will cost the government to pay back the clawbacks to injured vets. He said the government will continue talking with the parties involved.
Manuge's lawyer, Peter Driscoll, estimated the repayment figure could reach $500 million.
However, he also said that the clawback provision has been in place since 1979. If the repayment calculation reaches that far back, Driscoll said, the figure could be much higher.
Alisa Seller called the decision "huge." Her husband developed multiple sclerosis after years of working as a fuel air frame technician. Although he is now bed-ridden, his benefits were reduced by more than $60,000.
"It's been a huge struggle for the last 11 years to try to keep our home and look after my two children and their father. ... This is going to make my life a lot easier," Seller said.
